Chapter 10 -"It's spending that makes you rich"

Rob Bennett is paying for vanity-published books and articles in various newspapers and magazines. Here we will discuss these attempts to gain glory in the public eye.

Chapter 10 -"It's spending that makes you rich"

Postby tashina » 04/16/06 at 14:14:15

Alright, alright, I?m going to have to read this chapter eventually, so why not now?

This chapter better be good with a title like:
A Fantastic Fun-Maximizing Money Allocation Machine

Remember that this is written to the novice potential early retiree and then let?s see what they would be learning in this chapter:

Most middle-class workers save too little, and that?s highly unfortunate. But what makes widespread acceptance of the conventional money mindset even more tragic is that many of these same workers who save too little also save too much!


It?s spending that makes you rich.


Saving is spending at a time other than the time at which the money was earned.


...it?s a good thing to develop as many desires for spending money as possible


The best way to make sound money management decisions is to perform a quick Fun Units maximization analysis (employing the Multiply-by-25 Rule) each time you make a decision to spend or not.


Interesting quote here. I think Hocus has a separate business fund that he is taking $$ from to live off of, and that?s probably why Boo hasn?t kicked him out the door (yet).

I knew I would need money to spend during the time that it took me to write this book, so I saved to accumulate the assets needed to generate an income I could live on during that time. It took me 4 years of saving to pull that off, after having spent five years achieving the earlier Passion Saving goal of acquiring enough assets not to have to worry unduly about the effects of an economic downturn ...


There is a very confusing (to me) section explaining when spending can be better than saving. Girl wants to buy sweater and then thinks maybe she should save the money. Calls sister who says that the best money she ever spent was on a Buffett book. So Girl buys book and lives happily ever after and spending is better than saving. And me? I want to know why Girl didn?t borrow book from sister or library and buy $25 in stocks.

Next there is a discussion of how to best buy chocolate doughnuts if someone gave you 200 coupons, each for a free doughnut and they were all expiring in 5 years. Did I mention that this is a wierd book?  The answer is that each person?s doughnut allocation should be governed by their own life story. That?s good to know if I ever get given 500 free doughnut coupons.  But what if they were spaghetti coupons?

Chocolate doughnuts provide more immediate fun than spaghetti dinners. But chocolate doughnuts make you fat, and that?s no fun. Spaghetti dinners make you healthy and strong, which permits you to do all other sorts of fun things.


Damn. I could write this whole chapter in about 3 lines.  You should save as much money as you can as long as you don?t cut down on the things in life you truly love. Oops, that?s only one sentence. Well, if I were to sum up this book, I wouldn?t have enough for a magazine article unless I added some filler. Maybe I could talk about chocolate doughnuts.
And the Fantastic Fun-Maximizing Money Allocation Machine? Turns out to be a simple budget. Sure Hocus attempts to put a cute spin on it by telling you to make your budget by maximizing fun units, but really, it?s just a budget.
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Re: Chapter 10 -"It's spending that makes you rich

Postby BigMoneyJim » 04/16/06 at 14:36:07

Saving is spending at a time other than the time at which the money was earned.


I actually like that one. For younger people, anyway. 18-year-olds and other young adults tend to still be in the teenage the-world-doesn't-exist-past-the-next-10-minutes mindset; a message like this might help them to see that saving money is improving future spending money just like grades, college and promotions.

It's phrased a bit too stupidly, though. Needs to be reworked to something more like "saving is spending on cooler stuff in the future" "saving buys better future spending". Nobody spends money as they earn it; paychecks come on Friday, every other Friday or twice a month.

Then again, perhaps I'm adding something that wasn't in the original quote. Now I can claim the idea as original and be a published finance guru for young people! :D

[edit]It also needs to be pulled out of that awful book and republished in a pamphlet or limerick to young people.[/edit]
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Re: Chapter 10 -"It's spending that makes you rich

Postby tashina » 04/16/06 at 14:54:23

One of the main hard-to-fix problems with the book is that Hocus just can't figure out his audience. For part of a chapter the audience seems to be some wide-eyed novice who spends their life at Starbucks and Neiman Marcus and Hocus is going to teach them that saving can be fun, fun, fun. So he's got all these obnoxious exclamation points and song lyrics and cutesy phrases.

Then he goes right into how you should do mathematical calculations every time you make a purchase (based on the multiply by 25 rule). I just don't see the crowd that pays the minimum on their cedit cards because they don't understand how interest works suddenly deciding that it's gonna be tons of fun to get out the calculator every time they buy a magazine.

Also, Hocus ignores almost everything that isn't in his current life experience. He has a paid off house and owns his car outright and probably has no credit card debt. But wouldn't you think a book directed to people who are novices at this saving thing are people likely to owe on their credit cards? Doesn't the average American have something like $9k in credit card debt? But I am 2 chapters from the end and there has been no discussion of how to work your debt payments into the saving process. Maybe he'll get to it at the very end, but the book is basically fluff.
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Re: Chapter 10 -"It's spending that makes you rich

Postby hocus » 04/16/06 at 14:56:07

That?s good to know if I ever get given 500 free doughnut coupons. But what if they were spaghetti coupons? ?

Not to worry.

Rob
Lying and sliming since May 12, 2002 --  Don't understand why intercst allows me to post here. Learn more about Rob Bennett, see link: http://retireearlyhomepage.com/bennett.html
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Re: Chapter 10 -"It's spending that makes you rich

Postby hocus » 04/16/06 at 15:00:11

Doesn't the average American have something like $9k in credit card debt?

Not to worry.

Rob
Lying and sliming since May 12, 2002 --  Don't understand why intercst allows me to post here. Learn more about Rob Bennett, see link: http://retireearlyhomepage.com/bennett.html
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Re: Chapter 10 -"It's spending that makes you rich

Postby hocus » 04/16/06 at 15:05:59

I actually like that one.

Not to worry.

Rob
Lying and sliming since May 12, 2002 --  Don't understand why intercst allows me to post here. Learn more about Rob Bennett, see link: http://retireearlyhomepage.com/bennett.html
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Re: Chapter 10 -"It's spending that makes you rich

Postby tashina » 04/16/06 at 15:15:33

hocus wrote:I actually like that one.

Not to worry.

Rob



I think religious holidays drive Hocus a little more loopy than normal. When he posts the same one liner over and over, it makes me think evil thoughts of text substitution. "Not to Worry" could become "I'm so sorry, intercst, for the trouble I have caused. I was wrong about everything.".

Something like that.
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Re: Chapter 10 -"It's spending that makes you rich

Postby hocus » 04/16/06 at 15:19:21

it makes me think evil thoughts of text substitution.

I'm so sorry, intercst, for the trouble I have caused. I was wrong about everything.

Rob
Lying and sliming since May 12, 2002 --  Don't understand why intercst allows me to post here. Learn more about Rob Bennett, see link: http://retireearlyhomepage.com/bennett.html
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Re: Chapter 10 -"It's spending that makes you rich

Postby Schroeder » 04/16/06 at 15:27:41

tashina wrote:And the Fantastic Fun-Maximizing Money Allocation Machine? Turns out to be a simple budget. Sure Hocus attempts to put a cute spin on it by telling you to make your budget by maximizing fun units, but really, it?s just a budget.

I think I understand what hocus is trying to accomplish by describing budgeting in a cutesie way. But aren't there already books like this? Here is the result of a search for "Budgeting for Dummies" at amazon.com LINK

Also, I remember reading a more "adult" version of how to budget from an article on Yahoo Finance. LINK

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Re: Chapter 10 -"It's spending that makes you rich

Postby syke-- » 04/16/06 at 15:29:12

the lovely and talented tashina wrote: Doesn't the average American have something like $9k in credit card debt? But I am 2 chapters from the end and there has been no discussion of how to work your debt payments into the saving process. Maybe he'll get to it at the very end, but the book is basically fluff.


IIRC, the average is like $9k, but the median is more like $1k, so the debt problem isn't as bad it sounds.  
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Re: Chapter 10 -"It's spending that makes you rich

Postby syke-- » 04/16/06 at 15:30:04

tashina wrote:
hocus wrote:I actually like that one.

Not to worry.

Rob



I think religious holidays drive Hocus a little more loopy than normal. When he posts the same one liner over and over, it makes me think evil thoughts of text substitution. "Not to Worry" could become "I'm so sorry, intercst, for the trouble I have caused. I was wrong about everything.".

Something like that.


You madam, are an evil genius.  
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Re: Chapter 10 -"It's spending that makes you rich

Postby arrete » 04/16/06 at 16:49:16

I think religious holidays drive Hocus a little more loopy than normal.

This has got to be a synchro or something. ?DH and I were talking not 5 minutes ago about possible variables for the hocusian analysis, and I said "Saint's Days" - he looked at me and said that was nutty. ?So maybe it'll work. ? :D

arrete - great work , tashina.  At least I don't have to read every word in my data analysis.
Quando omni flunkus moritati.
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Re: Chapter 10 -"It's spending that makes you rich

Postby Schroeder » 11/30/06 at 22:14:32

Cross-posted here since this is from Chapter 10 of Passion Saving . . .

Schroeder wrote:hocus:
I'm not expert in picking stocks. It's not something I have ever written about.

Gee, it's always fun to catch hocus in a lie. I was saving this for some future moment. But this seems like a good time, so here goes.

The tenth chapter in hocus' book, Passion Saving, is titled, "A Fantastic Fun-Maximizing Money Allocation Machine." On page 178 of that chapter is the section titled, "How the Benefits of Spending Compound Over Time."

Mary earns $25 from a baby sitting job. ...

Mary tells her older sister Nancy of her plans to put the $25 into an investment account, and Nancy offers her enthusiastic endorsement of the idea. Nancy tells her a story of how, when she got her first full-time job, she made it a practice to direct 10 percent of her pay to the purchase of stocks. She reveals that the stocks she has selected are doing so well that in the five years in which she has been following this practice she has seen a doubling of the money she invested.

Mary is fascinated. She asks Nancy how she knows which stocks to pick. Nancy explains to her that a friend at work told her that Warren Buffett believes that one of the best books written on the subject is Security Analysis by Benjamin Graham and David Dodd. Nancy tells Mary that purchasing that book was "the best $25 I ever spent in my life."

Mary thinks this over. ... She buys the book! And it works. Five years later, she too has seen a doubling of the money she invested. The $25 she earned from baby sitting has generated in five years a return of several thousands. ...
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Re: Chapter 10 -"It's spending that makes you rich

Postby DRiP_Guy » 12/01/06 at 05:04:59

I want to know why Girl didn?t borrow book from sister

:lol: :lol:

Having just finished reading the ultra-frugal "How to survive without a salary" this is certainly the first thing that popped into my mind, too!  

Chocolate donut coupons... :o

Fun Allocation Units... :roll:

It all makes me want to.... :cry:
Robert Michael "Hocus" Bennett, October 22, 2010: "I have been living off my savings for 10 years"
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Re: Chapter 10 -"It's spending that makes you rich

Postby arrete » 12/01/06 at 10:01:57

Having just finished reading the ultra-frugal "How to survive without a salary"

That is one fun book.  I should reread it.  You have to be careful about Canadian FIRE books, though, because they don't have to worry about health care.

I see it has been updated (3rd edition).  I wonder if it is all that different.  Does he make any comments tht sound like they are after 1993?  I have the 2nd edition.  He probably put it in a note in the front.

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