Friday, March 14 was my final day at my old job. I packed up my desk, said my goodbyes, and walked out the door into a brave new world.

As most of you know, I quit that job, not because I disliked it (in fact, I liked it quite a bit), but because I made a very difficult decision. I basically chose to pursue my dream of being a writer, largely because it offered me enough flexibilty to fold around the time I wanted to dedicate to my family, particularly my children. Over the last two years, I’ve felt as though my time was being stretched far too thin and the part that was losing out was my family, so they provided the impetus I needed to make this change. This choice meant walking away from a steady job and a steady salary. That’s scary, particularly when you have two small children at home.

Since then, I’ve had two weeks to reflect on this change, get adjusted to my new life as a more dedicated parent and a writer, settle into writing in my office, and get used to new routines. Here’s what I’ve learned.

Do it.
If you’re tossing the idea around in your head of abandoning safety and following your dreams, do it. Start planning right now for that change. The amount of fulfillment and peace that I feel already after making this change was worth every minute of worry and consternation about what I was giving up. Start planning right now for making that leap – you won’t regret it.

Right now, as I sit here writing this, I feel absolutely no regret whatsoever about my choice, and I feel nothing but ecstatic about where the future is headed. I get to spend tons of time with my kids, have more time than I ever had for writing, and feel less stress than I have since I was in college. These factors add up to a net benefit that far exceeds the income that I’m losing.

But plan for it first.
Still, it’s hard to deny the loss of income and other benefits due to the job change. The only way that this is survivable is due to some advance planning. I left my job with more than a year’s worth of living expenses in a savings account. Even if all of my writing activities were to dry up immediately (and from what I can tell, they’re just getting warmed up), we’d be fine for at least a year, if not more.

Without that kind of cushion, making this leap would have been incredibly scary and I wouldn’t have been able to do it with the level of security that I feel right now. In effect, biding my time and waiting to do it right made the transition much, much easier.

The thing I’ll remember.
The biggest memory I’ll have of this first little taste of my new life isn’t about writing or about settling into my new office. It has nothing whatsoever to do with the work itself.

The memory I’ll have is of spending the days before Easter with my kids, particularly the Friday before Easter. I spent that morning coloring Easter eggs with my son, and I taught him how to use a small dipper to dip the eggs into the dye and then pull them out. We made a big mess, but he learned something and had a lot of fun. Afterwards, we had a nice lunch together and I put him down for an afternoon nap. Just before I laid him down, he gave me a spontaneous big hug. He has never done that before his nap, ever.

That’s what I’ll remember, and that’s why I made the change. No dollar amount can really replace that.

The new time management.
A lot of people have wondered what will change about my time management now that my primary professional goals relate to writing and it is wrapped around my everyday life instead of having my everyday life wrap around my job. Here’s what I’ve figured out so far.

At the end of each day, I’ve basically made a pile of tasks for the next one: stuff that has to be done, like a day’s worth of posts and an email session and doing the dishes; stuff that should get done, like working on other writing projects or writing a guest post for another site or getting ahead on posts or developing my food blog or cleaning the kids’ bathroom; and stuff that I’d like to get done, like researching a truly great article idea I’ve had. I go through the piles in a sensible order during the periods I have to devote to work, which have become much more flexible, and I just keep processing them. These “processing sessions” now fill in the gaps in my day when I’m not spending time with my children or doing things like that.

Ideally, I’ll reach a point where the “has to be done” pile is very tiny – I can see it coming in the future, where I have my short-term writing needs already covered and I have more freedom to follow my muse.

I put everything into these piles: notes, mail, magazines, books with bookmarks in them, etc. Whatever I need to accomplish that task goes into these piles. I also keep them electronically, too, in folders on my desktop – a mix of saved links, text files, and other stuff.

Some of you might recognize this as being quite similar to Getting Things Done, but with the freedom of choice in my current life, I can easily mix things that would be considered work with things that could be considered everyday life – and it all works out quite well in the end.

The new money management.
My income and spending have both changed in a number of interesting ways.

First, my income is now much less regular. I still receive income rather regularly, but the amount varies quite a bit. This is the nature of freelance and independent work, but it’s something I’ve never had to fully rely on before. It means being very careful with my actual spending – no splurging, and if I am thinking of a large purchase, setting the money aside a bit at a time and buying that item whole. In other words, I’m going to have to be much more careful with what I spend.

Also, I’m now paying for my own life insurance and figuring out my own retirement plan. Previously, both of these were handled through my job; now, I’m handling both of these on my own. I’ve already filed the paperwork for my life insurance plan, but the retirement savings is trickier as I’m evaluating several plans. I’m looking to set up an SEP-IRA, likely through Vanguard, but I’m mostly making sure I’m not stumbling in any legal or financial potholes along the way. I’ve also had to hire an accountant to help me figure out my exact plans when it comes to taxes – what do I need to do to get things in good shape?

Thankfully, my spending is now much more regular. There’s no more going out to eat on a completely irregular basis with coworkers. There’s a steep reduction in gas expenditures. There’s no trips where I have to pay for expenses out of pocket and fight for reimbursements. There’s no daily temptation to stop into a bookstore for a bit of a splurge. Instead, there’s lunch at home and afternoon at the park – these irregular expenses have all vanished. It certainly makes planning quite a bit easier.

Also, I feel like the sky is now the limit when it comes to earnings potential. The only cap on earnings potential now is me and my own choices. Do I choose to work hard, write compelling stuff, and pursue challenging and rewarding projects? It’s really up to me and how I proportion my time to write … but the options feel very good.

In short…
this is the best move I’ve ever made. If you’re toying around with a dream in your head, get started immediately. Don’t wait another day – give it your all to get that dream started. When you finally get ready to make that leap, the leap is scary as can be … but you’ll never regret it.

In my morning roundup today, I made an offhand reference to a comment from Hayden Tompkins about passive income:

I think passive income, like most financial information on the internet, is aimed at keeping middle class people more comfortably middle class.

I think that Hayden is looking at the situation from a very narrow perspective.

Ask yourself this: what financial information would be useful both to a new millionaire and to a minimum wage worker? Most things I write about wouldn’t be applicable to both, but there would be a few pieces that work. Both should be striving to spend less than they earn and conserve the difference. Both should still be looking for maximum value in what they buy, even if the millionaire is looking at fuel efficiency in luxury cars while the minimum wage worker is trying to find a used bargain.

But there are obviously big differences, too. The minimum wage worker would like to know how to make nutritious and tasty meals for just a dollar or two (hint: start with beans and rice), while the millionaire is probably curious about investment advice (hint: start with Vanguard).

Personal finance advice speaks to a person’s current life situation. What resources do they have on hand right now, and how can they maximize those resources? In the most narrow sense, I’m talking about money, and that’s where most personal financial advice stops.

If you look at just money issues, the reality of the situation is that there’s not enough pure money advice in the world for the minimum wage worker to transform his situation into that of the millionaire. The minimum wage worker can do everything perfectly with his money for twenty years and still not be in the situation of the millionaire.

In short, when you look at personal finance advice as being strictly about money, Hayden is absolutely correct – it’s not enough advice to lift someone into a different financial class.

But money advice is just the start. Time is another important factor – an effective time manager can get more done in a day, thus increasing their earnings potential. Personal talent is another piece of the puzzle, as is education – what do you bring to the table that sets yourself apart? Natural drive and ambition are also important – when you come home from work, are you willing to spend the evening trying to build your dream, or are you content to watch American Idol? It’s about entrepreneurship, about using everything available to you to get ahead, not just your dollars and cents.

That advice goes far beyond mere “money” advice – but it’s the advice that’s needed to make the really big financial leaps. You can massage your money until the cows come home and make your life very stable and comfortable, but until you start applying those other attributes, you’ll never be able to make a giant leap.

That’s not to say money advice isn’t useful – it is. It can make the difference between sinking and swimming, and it can also provide the foundation to make other moves in life, and it’s those other moves that can build your current financial state into something truly transformative.

With The Simple Dollar, I try to mix all kinds of advice. I’ll write about an inexpensive bean soup recipe and good investments at Vanguard until my fingers hurt, but I also mix in time management, self-education, and pushing yourself to be something more. Some people tune in for the frugality, others for the investments, and yet others for the push towards building something great. I hope that the frugal folks learn something new from the time management stuff, and the investors pick up something from the bean recipes, and maybe a person will read a piece about what it takes to succeed, jump up, and take charge of their situation. They all go together in assembling whatever you want out of life (and figuring out what you want is another big part of it, too).

Money advice, though, is just a small part of things, and while money advice can save you from drowning in debt or help you to stretch your paycheck a little more or put your money in a smart place, it’s only one piece in a larger puzzle of living out your dreams.

As for me, I don’t want to make that leap into fabulous wealth. My goal is to put myself in a position where I can just completely chase my muses and I’ll be happy. I have no desire for the trappings of luxury – I just want freedom, emotional happiness, intellectual engagement, and the ability to go fly a kite in the park with my son and daughter whenever the mood strikes me. I know what I want, and I constantly seek out the answers I need to get there. That’s what The Simple Dollar is about, and I think it’s a journey that many others share, at least in part.

Announcement #1 I’ve decided to give the “book club” another whirl with a book that I think could provoke a ton of discussion: Born to Buy. If you’re unfamiliar with it, read my review of it from a while back. The book is basically a deep look at the effects of marketing and consumerism on the developing consumer instincts of children – how they spend money and why.

I want to do this detailed reading of Born to Buy because I’m currently witnessing some early consumer behavior in my two and a half year old son. For example, he’s obsessed with the movie Cars and thus is highly partial to any product with a Cars tie-in. Is that a healthy thing? Should we let him pick these items (so he can enjoy his ‘Mater-themed training pants), or should we steer him away? Will either direction encourage him to be a rampant consumer later on in life? I really want to dig into this stuff, and that’s what Born to Buy is about.

Having learned lessons from both the very successful book club of Your Money or Your Life and the utterly disastrous attempt at a book club for What Color is Your Parachute?, I’ve figured out several things. First, the book needs to have a lot of meat for discussion. If it’s introspective, like What Color is Your Parachute?, it doesn’t go anywhere. Second, an entry every day is too much – and an entry once a week is too little. So the best amount is somewhere in the middle. Third, my entries should be a mix of a summary of the section and my thoughts on it – particularly the provocative ones.

So here’s the plan. I’m going to do three entries a week on Born to Buy, each entry covering about ten pages of the book. Each entry will have a summary of that part, some of my thoughts on it and the questions it made me think about, and notes on what will be covered next. These entries will appear on Sunday, Tuesday, and Thursday for about six weeks. The first entry, covering the ten page “Introduction” chapter, will show up on Tuesday, April 1.

If you’re interested in reading along, pick up Born to Buy at your local library or from Amazon. If you don’t have it right when we start, don’t worry – you can catch up on old entries. If you don’t want to read along, that’s fine, too – each entry will have something of a summary of the section.

Note about the “regular” book reviews: They’re going on hiatus for the length of the book club – if I retained those, too, it would reach a point of “book overload” pretty quickly. I’m doing this switch to try something different and insightful – to get more intimate with a single book than to just briefly summarize several of them. The normal reviews will still appear this weekend, but will go on hiatus for several weeks during the book club. After that, they will return.

Announcement #2 For the next several weeks, I’m going to do a series of post exchanges with a small handful of very carefully selected great blogs on similar topics to The Simple Dollar – they’ll do an entry here and I’ll do an entry on their site. This allows me to seek out new readers while also exposing you to some great writers from other sites.

This won’t overflow the site with entries from random people. I’m going to have one guest entry a week for several weeks, and these will appear on Friday afternoon. Once these are done, I’ll go back to the normal schedule, replacing that guest writer slot with my own stuff. I’ll also include any entries of mine that appear on other sites in my weekly roundup.

The first entry, appearing this Friday, comes from Erin at Unclutterer.

Announcement #3 My long-asked-about cooking blog is set to launch on May 1. I’ll tell you all about it shortly after that (when there are some articles up for you to read). Expect to hear about it near Cinco de Mayo.

Whew! Let’s read some articles!

How not to get super-rich: the passive income scam Some harsh words for the idea of passive income. I think part of the challenge is how to define passive income. One of the commenters offered a pretty good insight, too: “I think passive income, like most financial information on the internet, is aimed at keeping middle class people more comfortably middle class.” I could write a whole post on that idea alone… in fact… be patient! (@ jonathan fields / awake at the wheel)

An Interesting Piece on Target Target versus Wal-Mart is perception versus reality. For example, in one of the cities near where I live, the Wal-Mart is FAR nicer than the Target – both stores are pretty new, but the Wal-Mart there is one of the nicest large department stores I’ve ever set foot in, with a ton of aisle space, a very open layout, and amazing cleanliness. (@ all financial matters)

Funds to Form a Family: Adoption process begins. And so does the check writing. The adoption process bothers me on a deep level. It basically discourages families from trying to adopt because the costs are prohibitive. My wife and I considered adopting a child in the past from a disadvantaged nation, but the costs were outrageous (and that doesn’t even include the bribing). Why is this? So that only rich families can adopt? Why doesn’t an international agency set up an adoption clearinghouse so that families can easily adopt and that outlay of money can go to building a great life for the child instead of lining some bureaucrat’s wallet? (@ queercents)

Should I Buy Flood Insurance? My hometown was washed away in the Mississippi River flooding in 1993. Some people had flood insurance – others did not. Amazingly, you can still tell which group was which based on the situation they’re in now. If you’re in a flood plain, get flood insurance, period. (@ my money blog)

When the Going Gets Tough, Get Back to the Basics Repeat it with me: spend less than you earn. Spend less than you earn. Do that over and over again and you’ll be okay. (@ get rich slowly)

Recently, I received an email from a reader – let’s call her Denise. Here’s her story (edited slightly to remove a few personal details):

Here’s something I’ve been stressing about for a month or so now… I recently lost about 80ish pounds & have a ton of excess skin on my tummy. To “fix” it all is a cool $17,000. I’ve been debt free for several years now but remember clearly when I wasn’t & what it took to get out of it. Your Money or Your Life was a huge catalyst for making that recovery process possible and helping me get my head right about money’s role in my life. I haven’t owned a credit card for over 10 years, bought my first home 3 years ago, paid off my car, and only have about $8.7K left on my student loans. I have a wee little emergency cushion, but no retirement savings.

I know most people consider this a vanity issue, but it seriously effects my self image and my relationships… which is the only reason I am even considering hurling myself right back into debt. It’s really that important to me. But then, so is being able to pay all my bills.

What’s also interesting, of the people I solicit advice about this, most people say “Do it!” However, they all tend to be people who have never had to dig themselves out of serious debt, and/or are people who see how I tend live pretty frugally anyway and just want me to be happy. My “rich relatives” even compared this to the social stigma attached to people with significant overbites, clef palates, “and other disabilities.” As offensive as it might be, their point was that even if I overcome the body
image and self-esteem challenge, the society we live in will continue to make decisions about me based on my appearance which could affect everything from my job prospects to my marriage prospects (I’m 41 and single). They see this as a $17K investment in my future.

I’m interested in hearing a fresh perspective from someone who knows how devestating debt can be, that it can be overcome, and that happiness isn’t about money.

I know this is a highly personal decision, but then, isn’t that the whole point of processing all this? What would you do? What you advise your wife or sister or, in a few decades, your daughter to do?

There are actually a number of simultaneous issues going on here that need to be looked at individually.

First, the surgery itself would have some personal emotional value. No matter who you are, removing a large packet of loose skin from your body will have a positive impact on your self-image. You’ll feel better and more confident about your personal appearance and that can manifest itself in a lot of ways.

I’ve witnessed how a change in weight has completely altered the personality of an individual. I can think of one friend of mine who lost 120 pounds and became incredibly arrogant – she wound up alienating pretty much everyone around her. Another friend of mine lost about 90 pounds and basically went from being a wallflower to being an incredibly outgoing and kind person – it brought her out of her shell. Another person I know gained about 50 pounds but in the process became a happier person because he was no longer “possessed” by the need to maintain a great body, a pressure that he felt he constantly needed to live up to.

Why is this worth discussing? In modern society, body image is intrinsically tied to our sense of self and thus when we change our body (and thus our body image), our sense of self changes as well – and that changes how we behave. If you’ve lost a ton of weight, sit down with a close friend that you trust and ask some honest questions: how has it changed me? A dramatic change in your body and personal appearance can be a great thing, but it’s not worth alienating the people around you or building up a negative personality.

Second, an improvement in personal appearance does affect how others perceive you. Regardless of how you feel about yourself, others do use your personal appearance as a factor in their impression of you. Removing a large amount of excess skin is likely to be an improvement in this area.

In our society, again, such a decrease in weight is a net positive, as would be the loss of the excess skin.

Third, there’s that pesky debt. Obviously, it’s never a good idea to go into debt, but it’s quite reasonable to think that an appropriate cosmetic procedure such as this one does have some significant return on investment.

The question is whether this return on investment is enough to make the surgery worthwhile. It’s only a positive return if the surgery itself is a net positive, and part of that relies on the changes in your personality. Have you personally changed in a positive way because of the surgery, or at least in a neutral way? A two hundred pound person with a positive attitude is much more valuable than a one hundred and twenty pound person with a negative attitude.

Given that you’ve already lost the weight, you have a good indicator as to whether your body changes have affected you positively. Talk to your friends about it. If it’s been a net positive, then the surgery is probably a good idea, as you’re quite likely to continue that positive mindset and have the benefit of a better body. Added together, it will certainly add enough value to your life to make it worthwhile, even through the debt.

On the other hand, if your friends report that you’ve changed in a negative way, listen to them. Don’t blow it off as “jealousy” or something like that, because it’s not – it’s genuine concern from people who care about you. Your best approach is not to gain the weight back, but not to immediately have the surgery, either – instead, seek counseling and work through the reasons why this weight change has altered your personality in a negative way. If you can work through the issues, then consider the surgery.

What about the finances? If you have cosmetic surgery that brings about genuine and dramatic change (removing significant excess skin would fall into this category) and it’s accompanied by a genuine positive change in personality (or at least not a negative change), then, in my opinion, it’s worth it to find a way to finance the surgery.

However, Denise really needs to get on the retirement savings ASAP. Go to your employer and start a 401(k) or 403(b) now, not later. Get it done today – don’t wait another second. If you don’t know what you’re doing, just use the recommendations of the plan’s manager at your workplace – you can change most of this later on.

What about people who need cosmetic surgery and don’t know how it will affect them? Cosmetic surgery should always be accompanied by (at the very least) significant self-analysis – spend time reflecting on the changes it has brought to you and also ask friends and family about the changes they observe. If there are any bumps in the road, a psychologist should be sought out – you’re dealing with a major change in body image and that can affect your personality significantly.

Good luck, Denise! I’m sure the readers will have many more comments than I (and probably a few disagreements, too)!

Over the last several months, I’ve had the opportunity to review all five entries in the Little Book investment series. For those unaware, the Little Book series by Wiley Publishing is a series of small hardcover books. Each entry in the series seeks to explain in layman’s terms a specific investment strategy and how an individual can execute that strategy.

After my review of the fifth entrant, The Little Book That Builds Wealth, several readers wrote in to ask what my views on all of the books in the series were in comparison to one another. Thus, here are my thoughts and recommendations when it comes to the Little Books series as a whole.

Best Investing Advice
The Little Book of Common Sense Investing – John Bogle

Out of the five books, I only found one had a clear and thorough enough argument to actually convince me that the advice was worth following, and that book was John Bogle’s The Little Book of Common Sense Investing. The book itself isn’t the best written one in the series – in fact, much of the book seemed merely to be a simplificiation of Bogle’s earlier book Common Sense on Mutual Funds.

What really carries The Little Book of Common Sense Investing is the strength and logic of the argument. The idea of investing in index funds is simple and it makes a lot of sense – just invest as broadly as you can and minimize the fees you pay. This way, you aren’t completely destroyed by the bad moves of one company, but you don’t get to ride the tidal wave of a single company’s success, either. Instead, you ride the overall waves of the entire market. While doing that, though, you make choices to minimize the amount you have to pay to the investment house for their services – and it can be very inexpensive to invest in index funds.

Taking in the complete argument, Bogle’s is really the only one yet that has truly convinced me of the benefits of that strategy. It’s simple and it works – the exact concept that the series as a whole is trying to espouse.

Most Worthwhile Read
The Little Book of Value Investing – Christopher Browne

Although I think that Bogle’s advice is probably the best to follow, I thought that Chris Browne’s The Little Book of Value Investing was perhaps the most compelling read.

One of the books you’ll see on pretty much any investing reading list is Benjamin Graham’s The Intelligent Investor. It’s generally considered to be the definitive book on value investing – it lays out the strategy in thorough detail and the author has a great deal of reknown and prestige among real-world investors (for example, Warren Buffett considers Graham his mentor). The only problem is that it’s dense. The Intelligent Investor is a challenging and demanding book, and for most armchair investors attempting to gain a well-rounded basic understanding of investment strategies, reading The Intelligent Investor is like using a cannon to kill a ladybug.

The Little Book of Value Investing solves that problem by taking the ideas of The Intelligent Investor and rewriting them in a form that beginning investors could swallow. It doesn’t get into the nuances and the analyses to the level of The Intelligent Investor, but The Little Book of Value Investing nails the concepts. Because of that, it’s almost worthwhile for anyone to read The Little Book of Value Investing first and then follow it with
The Intelligent Investor if they need more.

I’ll say this: reading The Intelligent Investor was much easier the second time through, primarily because I read (and enjoyed) The Little Book of Value Investing just before tackling it. The Little Book of Value Investing taught me the big concepts, then Graham just refined them a bit for me.

Worst Entry
The Little Book That Beats the Market – Joel Greenblatt

This first entrant in the series only really succeeds in one respect: it explains in extremely simple terms how the stock market works. After that, it gets into an investment strategy that seems to be flaky at best – it’s vaguely based on value investing, but it really only uses two metrics to find stocks to invest in, not a thorough investigation of those stocks.

The Little Book That Beats the Market is a fun read, and it can be a good one if you have no idea how the stock market works at all, but if you’re looking for an investment strategy to use, this is one to avoid. The actual strategy within is, as far as I can tell, basically arbitrary – it seems to be “pick two stock metrics and find the companies that do well in both, and then just buy ‘em.” That’s not a winning strategy by any stretch of the imagination.

The Rest
The other two entries in the series, The Little Book That Builds Wealth (on competitive advantage investing) and The Little Book That Makes You Rich (on growth investing) both do good jobs of laying out their specific strategies and are good follow-ups to The Little Book of Value Investing in that they can provide a great background on specific individual stock-picking strategies. They’re not particularly weaker than The Little Book of Value Investing, but I found that one to be a touch more enjoyable to read and the strategy to have much more additional material available to learn from.

In a nutshell, The Little Book of Value Investing is the best one to read for learning (along with The Little Book That Builds Wealth and The Little Book That Makes You Rich, which also do a good job on teaching individual strategies) and The Little Book of Common Sense Investing is the best one to read for application. You should probably avoid The Little Book That Beats the Market unless you’re a complete beginner, but you shouldn’t ever follow that strategy unless you deeply understand why you’re doing it (and the book won’t really teach you that).

Good luck, good reading, and good investing.

Quite often, when I talk about opportunities to succeed on The Simple Dollar, I am accused of forgetting people who can’t help themselves – truly impoverished people, people with disabilities, and people with other strict disadvantages in life. I’m often told in no uncertain terms that for these people, success is not a choice – they’ve been dealt a bad hand in life.

Similarly, I’ll hear the hard-luck tale of someone who worked for forty years trying to build something successful and never quite made it. That person went out there, gave it their all, and success just never seemed to find them.

Because of situations like these, many people out there will shout from the rooftops that success is not a choice, that it’s merely a part of the hand that life deals you.

I flatly disagree, and here’s why.

Before I get going, let me say a bit about people who are disabled and those who are truly impoverished. People in those situations have indeed been dealt a bad hand, and it would be very trite of me to say that I could ever solve problems like disease or true poverty in a blog post. I don’t know the first thing about solving world hunger or curing Parkinson’s disease – those are problems for much wiser people than me to solve.

But I’m not talking about those people. I’m talking about people that are at least middle class (the upper 90% of income levels) and are of sound mind and body. That’s 80% or so of the American population.

For those people, a group that almost certainly includes you, success is largely a choice.

Every single minute, you have choices in life. You can sit there twiddling your thumbs and reading TMZ or you can bust your hump getting a great project done on time. You can burn $30 at the bookstore, or you can go to the library and get those same books for free. You can spend your evening watching television, or you can use it to educate yourself.

Each choice you make doesn’t guarantee success. You could make the “right” choice every single time for thirty years and still not succeed, or you could make just one right choice and have success fall right on your lap.

What these choices do over a period of time is open up more and more doors for success in life. Let’s say you’re interested in local politics so you choose to attend the city council meeting as an observer instead of watching television. That one choice might not mean much, but if you keep making choices like that, and then while at those meetings choose to ask questions and take notes, you might find yourself going where you want to go. On the other hand, if you go to one meeting, give up, and spend the next meeting watching television, you’re not choosing success at all.

I’ll use myself as an example. I’ve been trying to succeed on some level as a writer since I was fifteen years old. I’ve received a gigantic mountain of rejections over the last decade and a half. On the few occasions when I have sniffed success, that has faltered, too.

But I kept writing, and with each word and each moment of sustained effort, I became a better writer. I learned more about how the writing business works. I found new avenues that opened the door for success, tried them out, and failed at most of them. Right now, I’m finding some degree of success with the written word, but without that continuous effort, those constant choices that I made, I’d never be here.

You have a choice right now. You can go on doing things like you’ve always been doing. Or you can choose to try to do things better. You can keep shuffling through things, day in and day out. Or you can set a big audacious goal and choose to take the little steps that will move you towards it.

Your choice won’t guarantee you success, but it will open the door just a tiny bit wider, and each choice you make after that opens the door just a little bit more. Success may never walk in, or success may walk in tomorrow – but success will never walk in if you don’t put some effort into opening that door and putting out the welcome mat.

So, yes, I believe that for most people success is largely a choice – success can come to anyone at any time, but you steadily improve or worsen your chances with each choice you make. So go out there and start making choices to open the door a little wider – and have a little patience, too.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

First of all, after the recent discussion about finding your own passion, a reader named Syble sent in the following idea, which I loved:

Another suggestion for finding your passion: keep a note card and every time you see, hear or experience something that makes you feel really good, write it down. Love seeing sci-fi movies? Spending time with your elderly aunt or joining in a pick-up soccer game at the nearby park? Making a table? Organizing dinner parties? Write it down on your card! On the other side of the card, write down everytime you see, hear or experience something that makes your blood boil. A child being molested? The poor state of the streets where you live? The way women are treated in Afghanistan? Immigrants who can’t speak English? Write it down. After a few weeks, look at your list and see what patterns emerge and if a particular like or dislike jumps out. That’s where your passion lies! It’s where you have strong emotional feelings and want to be involved. Look in that direction for a job, hobby or volunteer opportunity. You could help create change by teaching adults English as a career or volunteer. Concerned about children? Look into an agency involved in parent support, foster care, programs for kids from troubled backgrounds, shelters for abused women and children, etc. Look at the political route or become active in a committee to improve the infrastructure of your town. Review sci-fi movies for a local paper or write for a magazine. Collect and sell sci-fi movies. Think really broadly about what moves you emotionally to focus your efforts on a job, career or personal time search for having a passion for what you’re doing.

That’s a truly great idea, well worth trying.

Also, here are a few links that directly answer a few questions I’ve heard lately.
My thoughts (both good and bad) on Rich Dad, Poor Dad
Preparation-for-life advice and money advice for college students
Frugal golfing

And now for some good ol’ fashioned reader questions!

Where do you think is the line between self-reliance and outsourcing, making and buying ? Washing your own clothes and pressing them vs. giving it out to laundry? LoL. Why didn’t you grow your own wheat/maize to make your bread ? It would have been simple, sweet, self-reliant and of course, I am sure, you would have found an argument to show how it can be cost-effective (like owning a small wheat farm and co-operatively distributing the wheat to all like-minded breadmakers in the community).
- WhirlMind

In most of those cases, you’re paying others for a particular service you could do yourself. That’s a value exchange, and that’s completely an individual judgement call – there are some things that are done more effectively by paying someone else to do them. The problem comes in when you no longer have the faintest idea how to provide that service. What would you do if suddenly a plague wiped out 99% of Earth’s population? Would you know how to survive? Could you make your own food? Gather water? Keep yourself clean?

The advantage of doing things yourself is that you learn at least some of these skills, and they function as something of an insurance policy for you. When I grew up, there was an old mountain man who lived completely off the land near where I lived. People looked down on him because he didn’t keep himself up, but do you want to guess where I would have headed if society’s fabric had begun to collapse?

Given a year or so, I know how to make corn flour, and I’m fairly confident I could make wheat flour. I also know how to make a wood fire and I know the process for collecting your own yeast. Thus, given almost nothing except for adequate time, I could produce a passable loaf of bread. There aren’t many people I know that could do this, but I know that there is at least some potential for that to be very useful.

Self-reliance is a way to improve yourself and make yourself more ready to tackle the challenges that life may deal to you.

You seem kinda arrogant. Are you really happy with your life? Like, really? What area of your life are you disappointed with? Come clean.
- fungi

I write with natural self-confidence. Words without confidence don’t inspire others to any sort of passion, and it takes passion to step up to the plate and take ahold of your finances. I think my natural tendency to write with self-confidence sometimes convinces people that I’m arrogant.

The only thing I’m unhappy with in my life is that there are only twenty four hours in a day and as a result I have to choose among a big pile of things that I’d like to do. This always leaves threads I’d love to follow up on, and I often feel a tremendous amount of guilt because I don’t get around to some of those things. I sometimes wind up putting a lot of pressure on myself to “make good.”

Have you ever considered investing in real estate? If not, how come?
- Jared the Super

Real estate investing is not something I’ve looked at with any degree of seriousness. Successful real estate transactions seem to generally require more personal involvement than I’m interested in. Certainly, there are options that minimize this personal involvement, like REITs, but those are asset classes that I don’t see a big need to include in my life right now.

In a nutshell, it just doesn’t get my fire going, and I don’t see a strong financial reason to get involved, so I’m content to just let it be.

I would love to see a post about commercials and money. What is your reaction to commercials like the debit card one. Wife is watching TV when it goes out. She says “yes, we need a new TV.” Man rejoices and “wisely” plans how much to spend on TV by looking at his bank balance on his handy-dandy debit card. I could see a whole post what is right/wrong with this commercial alone.
- Sharon

It would be pretty easy for me to go on yet another anti-television rant, but suffice it to say that I think most commercial television is so loaded with marketing messages that you might as well invite a corporate pitch man into your living room to shill for you for thirty minutes. Not just commercials, but within programs – there are “clever” product placements everywhere. My favorite one is Extreme Makeover: Home Edition, a seemingly heartwarming show that is buried in so many product placements that I often lose track of where the commercial ends and the program begins.

Enough of that. I agree – the commercial is obnoxious.

What is your absolute favorite frugal recipe?
- Sandy Fleming

Easy – sixteen bean soup! Just get a bag of dried beans at your local grocery store, a pound of ham or so, half an onion, and make sure you have some salt and pepper in hand. It’s good to cook this on a weekend the first time. The night before, put all of the beans in a pot of cold water and put that pot in the fridge to soak overnight. When you’re about three hours before you’re ready to eat, drain the beans of the water (which will be pretty cloudy), pour enough water into the beans to cover them with about an inch of water on top, and put them on to simmer for three hours. You can add in the ham and (chopped) onions at whatever point you wish during this three hours – earlier means the soup will be more consistent in flavor and the onion and ham will be more tender, later gives each bite a bit more variety.

Here’s the best part: that recipe makes enough for three meals for my family. We take the leftover soup, split it in half, put each half in two freezer Ziploc bags, and drop these bags in the freezer. Whenever we want it for a meal, we just take out the bag a day or two early to thaw and then just warm it up, either by stove top or by microwave. This makes the meal cost substantially less than a dollar per person per meal at our house.

What are the best parenting/baby books? I plan to be a new parent within the next few years, and I’m looking for a list of books that will help me w/ the whole experience. And I know you read like a madman. ;) Thanks.
- Dave

A lot of people will immediately recommend What to Expect When You’re Expecting (and other What to Expect books). These are fine for reference, but they often read like a “Worst Case Scenario” handbook and can easily make a reader feel quite (unnecessarily) nervous about the experience. Get it, keep it as a reference, but don’t read it as gospel.

Instead, I got a lot of good use out of The Expectant Father, The New Father: A Dad’s Guide to the First Year, and The New Father: A Dad’s Guide to the Toddler Years. All three were really useful for preparing myself to be a father, as I found that the things I expected to be challenging were actually easy and the real challenges were unexpected. The books basically have nailed things quite well along the way.

Have you ever in hindsight regretted blogging something, maybe because it was too controversial, too personal, or something of that nature?
- Eric

Not entire posts, but I’ve often regretted my chosen wording and occasionally my choice of examples. A few times, I’ve gotten carried away with criticism towards something I deeply feel is wrong. My biggest frustration/regret as a blogger is when I’m talking about one point, make a single reference to something related in one sentence, and the entire resulting conversation is derailed by this sidebar discussion. That usually makes me feel as though I’ve somehow failed as a writer, that this little side point is more compelling than my article as a whole, and it makes me regret the article that I wrote.

What are your thoughts on outsourcing your life? Do you do any outsourcing yourself? How do you feel it helps or could help highly busy and productive people? I do this about halfway and am incredibly productive… I was just wondering your thoughts.
- Shanti

I think this could be potentially worthwhile depending on your situation. “Outsourcing your life” is just a continuation of the old idea of hiring people to do stuff for you that you yourself don’t want to do. Most people think it’s normal to hire someone to mow your yard – the idea here is basically to hire someone to check your email or do other mundane tasks so you can focus in on the pieces you enjoy. I see no problem with that whatsoever if it’s a time-for-money exchange where you feel your time is more valuable.

Personally, I would be rather hesitant to hire someone to answer correspondence on my behalf, but as my correspondence grows, I can actually see reaching a point where I would consider it.

What is your opinion on affirmative action? Also, what is your opinion on reparations for native americans?
- Outlook

I’m not an expert on affirmative action or other such initiatives – there are great arguments for and against it. I do believe, though, that as long as people are judged even slightly by the color of their skin versus the content of their character, then something does have to be adjusted. Many people feel that the adjustments are too much, but recent current events in America have convinced me that perhaps as a nation we’re not as advanced on racial equality issues as we’d like to be. I guess, then, as a white male, I’m okay with affirmative action, though I think every single one of us should be working towards an America where affirmative action is an unnecessary antiquated notion.

As for Native American reparations, I am legally qualified to receive them, as I am legally eligible to be a member of a tribe. Considering my experience with Native American life mostly comes from memories of my grandmother using homeopathic remedies, I think the fact that I am eligible is rather silly. As for whether they’re necessary in general, I think the best way for reparations to be given is in the form of opportunities – scholarships and other tools to allow people in bad situations to improve themselves. I generally feel this way about any government assistance – it should be assistance for people who are genuinely trying to help themselves, not subsistence.

Is Mark Bittman’s How to Cook Everything Vegetarian almost all new material or has he just cut out the meat part of How to Cook Everything?
- John

As some of you know, I’m pretty intrigued by food and I’ve found that Mark Bittman is my favorite food writer – in fact, How to Cook Everything is my default recommendation for a beginner cookbook.

There is significant overlap between How to Cook Everything and How to Cook Everything Vegetarian. I’d say as much as 50% of the content is the same in each one, but that other 50% really makes a big difference. Having said that, I’d probably stick with the original until the new one comes out in paperback unless you happen to be a vegetarian or you’re really interested in diving into vegetarian cooking. If that’s the case, How to Cook Everything Vegetarian is a very good book.

What is your opinion of the “Can I afford it?” segment on the Suze Orman show? All of the callers seem to have $60,000 to $140,000 in savings and yet are not smart enough to know if they should take a $4,000 vacation. Do you think the callers are real?
- st

There are a lot of people out there that need encouragement in their decision-making process. They already know the answer, but they feel much better about things if an “authority” of some sort reaffirms their gut instinct. That’s really what the segment is about – reaffirming common sense when it comes to purchasing decisions. It’s helpful for some people and redundant for others.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Each Sunday, The Simple Dollar reviews a personal productivity or personal development book.

I find that time and time again, my greatest opponent when trying to make intelligent and well-reasoned personal finance and time management issues is myself. I’m my own weakness. I regularly make irrational decisions – I’ll stop in the middle of work flow to surf the internet, or I’ll spend my time talking myself into a replacement workstation that’s far more expensive than what I actually need. This is a persistent problem for pretty much anyone who strives for something greater in their lives. We rely on their own rational behavior, but are often undermined by our own irrational impulses. Why?

Predictably Irrational focuses in on this exact question, digging deep into the causes of such irrational steps and laying bare some useful solutions. It’s written by Dan Ariely, the Sloan Professor of Behavioral Economics at MIT, so the book comes with some authority behind it as well.

As always, the question I’m looking for is what this book can teach me to apply to my own life. Does it provide some useful material, or is it focused on pie-in-the-sky nuances of behavioral economics? Let’s dig in and take a look.

Thumbing Through Predictably Irrational

Chapter 1 – The Truth about Relativity
Why Everything Is Relative – Even When It Shouldn’t Be

Predictably Irrational opens with a discussion of relative decision making – in other words, the idea that we use comparisons, whether fair or not, as a piece of our decision making process. A great example of this is the phenomenon of “keeping up with the Joneses” – we make choices based on a comparison of ourselves with our neighbors, not on a basis of whether or not a particular item suits our particular needs. We also do this when choosing among several options at the store – we rarely choose the cheapest one or the most expensive one and instead choose one in the middle (usually the next-to-most expensive one). Knowing that, retailers can organize the prices such that they get maximum profit not from the expensive item, but from that middle item. Yep, the middle item is often the one with the biggest markup in the store.

Chapter 2 – The Fallacy of Supply and Demand
Why the Price of Pearls – and Everything Else – Is Up in the Air

Ariely argues here that we tend to anchor ourselves to initial prices. For example, when we’re going to look for a DVD player at the store, we look at the price of the first one we see and then use that as an “anchor” by which we judge the other ones. That first price becomes a criteria in judging all other prices. As a result, when a new item comes out, it makes a lot of sense for a retailer to grossly overprice the item and thus set in our minds a very high “anchor” price, so that later on when the price drops a bit, it seems like a huge bargain when in truth there’s still a big fat profit margin for the business.

We do this to ourselves in a lot of ways. For example, during my first day as a full time writer, I more or less arbitrarily made up a schedule for the day, alternating between writing and other tasks. Even by the second day, this schedule had begun to seem natural to me and I used that natural schedule to judge my choices for the day – and by default, I followed that pattern of the first day.

Chapter 3 – The Cost of Zero Cost
Why We Often Pay Too Much When We Pay Nothing

Almost everyone behaves irrationally when the concept of “free” is introduced. The idea of getting something for “free” persuades us to engage in completely irrational behaviors that undermine any benefit we might get from “free.” The most stellar example of this I can think of is Amazon’s “free” Super Saver shipping on orders of more than $25. Let’s say I pop onto Amazon and want to order just one book, like Predictably Irrational, for instance. It’s a new hardback, costing $14.27, so I add it to my cart and see that if I just spend $10.73 more, I can get “free” Super Saver shipping! So I try to think of something to add to the cart so I can get that “free” shipping. Meanwhile, the profit margin on that extra purchase makes Amazon substantially more money than the cost of that “free” shipping, so I pay extra to get an item I don’t really want or need while Amazon pads their profit margin. But it’s “free,” right?

Chapter 4 – The Cost of Social Norms
Why We Are Happy to Do Things, but Not When We Are Paid to Do Them

Social norms also play a big role in our decisions. On our block, quite often people will pitch together to help someone do something like move a couch or rearrange deck furniture. No money is expected, though a cold beer is often accepted as a thank offering. However, if you were to give someone a dollar for this work – a fair wage for lifting a couch for a moment – you’d be quickly ostracized for being a jerk. Why is this? It’s because social norms often far outweigh market norms. This happens time and time again, when we make money decisions and time decisions not based upon what is a fair price, but based on what is socially accepted.

Chapter 5 – The Influence of Arousal
Why Hot Is Much Hotter Than We Realize

The conclusion from this chapter is stunning: our emotions are the single biggest factor in dictating our responses to a situation, to the point where we can almost behave like different people depending on our state. This chapter largely focused on the differences in decision making between a “normal” state and a state of sexual arousal and the study concluded that the decisions made were different enough that it might as well have been different people making the choices. In fact, any emotional state causes some significant changes in the decisions that we make.

Chapter 6 – The Problem of Procrastination and Self-Control
Why We Can’t Make Ourselves Do What We Want To Do

The first real solution to these problems is described here and it comes in the form of precommitments. In other words, we are much better at controlling our impulsive nature if we clearly state goals and set deadlines before we even start, and our biggest failures are often the result of not having concrete goals when we begin the process. For example, if we’re going to make a major purchase, we’re always better off doing the research in advance, checking on Consumer Reports and determining the exact nature of the item that we need. The same goes for managing our time: setting self-imposed deadlines and milestones helps us to keep making progress towards a bigger goal instead of falling into the easy trap of procrastination.

Chapter 7 – The High Price of Ownership
Why We Overvalue What We Have

All of us overvalue the things we own. They are a source of pride for us, an example of some sort of commitment of effort. Not all ownership is equal, though – things that we invest a lot of time in have an even greater value for us. Ariely uses the example of individuals waiting for tickets before Duke basketball games – they go through a long and agonizing ritual to get the tickets and some who participate don’t make the cut. Immediately after the tickets are distributed, the people who have the tickets radically overvalue them, while the ones without tickets value them substantially less. The difference is in the perception brought about by owning the tickets – the ticket owners see the investment of time and effort put into acquiring the ticket and the potential memories of a crazy day at Cameron, while the non-owners see the many possibilities for the hundreds of dollars that a ticket might cost.

This effect is true for anything we’re passionate about that we consider ours. I think of my children – I know quite well my opinion of them is higher than any other male on earth. Sure, that’s because I’m a parent, right? That status of parent is the result of a lot of time and emotional investment in my children, and thus that investment gives me a stronger sense of connection – and thus a higher value – than there would otherwise be.

Chapter 8 – Keeping Doors Open
Why Opinions Distract Us from Our Main Objective

Almost always, we prefer to keep our options open when making a choice, but we often do this to our own detriment. For example, let’s say you were about to buy a new car and you began researching models. With so many out there, it’s easy to keep finding new variations to look at and investigate and thus keep researching and putting off the purchase. Most of us quickly discover the first coping mechanism – eliminating a lot of choices and keeping just a few. But what do we do when confronted with just a few choices, all of which seem pretty equal to one another? Often, we get locked into making irrational decisions – we invest so much time in the choice that any difference between the options is negated by the loss of time and energy spent on making the decision.

I did this myself when trying to decide whether to pursue a full time career as a writer/involved parent. I weighed both options incredibly carefully and found myself going over the choice again and again and again. Yet, when I finally made the choice, it was incredibly clear, quick, and decisive, and I realized that for all the hemming and hawing about the decision, I would have been much better off just choosing based on my initial instinct and analysis and then investing that left over energy into making this adventure work.

Chapter 9 – The Effect of Expectations
Why the Mind Gets What It Expects

Most of us have expectations about what will happen in the future. We root for our favorite team in the World Cup and expect on some level that “our” team will win – and we’re deeply disappointed when they lose, even if it was expected. I know I felt this way watching the 2002 World Cup with friends – I was rooting for the United States and although I rationally knew they weren’t likely to do well, I was crushingly disappointed when they lost in the quarterfinals to Germany.

Interestingly enough, this chapter described a study using two samples of beer: one was Budweiser and the other was Budweiser with a few drops of balsamic vinegar mixed into it. Without knowing the “extra” ingredient, most people preferred the vinegar-laced beer; when they did know, virtually no one preferred it. I tried it myself and, interestingly enough, a drop or so of balsamic vinegar in several ounces of a typical Pilsner beer does make it taste better (though more than a drop makes it taste like vinegar).

Chapter 10 – The Power of Price
Why a 50-Cent Aspirin Can Do What a Penny Apsirin Can’t

The idea that an expensive item can do things that an identical inexpensive item cannot is often called the “placebo effect,” and it pops up all the time. Go to the grocery store, walk down the aisle, and grab a box of generic dry spaghetti and a box of “name brand” spaghetti. Compare the ingredients. I’ll go ahead and tell you what the differences will be: very little. Yet we’ll often buy the name brand spaghetti because the placebo effect of the brand convinces us (irrationally) that it will be better than the generic.

It’s really a fun experiment – try it sometime. Do some side by side blind comparisons of generic products and regular products and see which one is actually better. Quite often, you’ll find that they’re basically indistinguishable, and when you do that, you’ve gone a long way towards cutting down the placebo power of brand names and you’ll be well on your way to making better rational decisions.

Chapter 11 – The Context of Our Character, Part I
Why We Are Dishonest, and What We Can Do about It

Dishonesty is a short term gain in exchange for a long term loss. Here’s an example: if you’re dishonest in a few short-term exchanges, you might make a quick buck or two, but eventually you will acquire a bad reputation and you won’t be able to enjoy the benefits of a trusting relationship – you won’t have repeat customers and people won’t believe in the promises you make or the prices you set.

I like to think of eBay in this context. I usually prefer to deal only with people that have a high reputation and a lot of positive feedback – I tend to distrust people without it. I’m not alone in feeling this way, and thus quite often you’ll wind up paying a premium when buying from a seller with a high reputation. That premium is trust and eBay clearly shows that trust has significant value in business.

Chapter 12 – The Context of Our Character, Part II
Why Dealing with Cash Makes Us More Honest

Interestingly, though, when dealing directly with cash, most people tend to be quite honest. Cheating and dishonesty tend to occur more often when the money is abstract – for example, it’s much easier and more justifiable to us to take a Coke out of the fridge at work than it would be to take a dollar off of someone’s desk. I actually think that this is a big part of the reason people get into credit card debt – they’re abstracted from the money, so it’s easier to delude ourselves into believing we’re doing the right thing.

Chapter 13 – Beer and Free Lunches
What Is Behavioral Economics and Where Are the Free Lunches?

The book closes on a subdued note, surveying the general idea that traditional economics often doesn’t provide a good model of how humans actually behave and arguing that behavioral economics – a mix of economics and psychology – models individual human behavior much better.

Buy or Don’t Buy?

Predictably Irrational is one of those books that’s profoundly worthwhile to read and would be quite wonderful to discuss in a book club environment. It looks at human issues, makes you reconsider them a bit, and leaves you with some food for thought to chew on. Unfortunately, it also falls into the same trap that many of the newer “pop” books on behavior and economics fall into – they’re clearly “read once, think about it a bit, and move on” books, not offering the kind of meat that rewards repeat readings.

I enjoyed Predictably Irrational quite a bit and I’m going to recommend it to many of my friends and also to you, but this is definitely a book worth checking out at the library or buying in conjunction with a friend or two so that you can read it in quick succession and discuss it with each other.

In fact, that’s probably the greatest value this book could have – the interesting discussions it could generate with the people around you. For me, that’s the sign of a very good book, but perhaps not a truly great one. It’s a book that can deeply be enjoyed and leave you thinking for a while, but in a year or two the only memory you’ll have of it is in the few subtle things it subtly inserted into your body of knowledge and understanding of the world.