Get Rich Slowly

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As I continue to achieve my short-term goals, my attention is turning increasingly to long-range plans. What is it I want to do with my life? I’ve always toyed with the idea of early retirement, and lately I’ve been reading more about the subject. Three books that have helped me so far are:

• Timothy Ferriss’ The 4-Hour Workweek, which explores the notion of “mini-retirements”. (I recently recorded a phone interview with Ferriss on this subject — look for a transcription soon.)
• Work Less, Live More: The Way to Semi-Retirement by Bob Clyatt describes techniques for leaving the traditional job path years (or decades) before the traditional retirement age of 65. This is a great book.
• Fred Brock’s Retire on Less Than You Think, which argues that the traditional rule of thumb — you’ll need 80% of your pre-retirement salary during later years — is misguided.

I’m still in the early stages of my research, which means I love finding new information about the subject. Recently Walter Updegrave, Money’s “ask the expert” columnist, fielded a question from a reader who hopes to retire early:

I’m 50 years old, my wife is 44 and we would like to retire by the time I’m 55, if not sooner. We have a little over $600,000 in 401(k)s, IRAs and other retirement accounts and another $250,000 or so in stocks, mutual funds and cash that we can draw on once we retire. Our mortgage will be paid off shortly and we have no other debt. Do you think we can pull off early retirement?

“I can’t give you a definitive answer to your question,” Updegrave writes. “But I can tell you how to assess your situation [on your own].” Whenever you discuss early retirement, he says, you need to consider two factors: money and lifestyle.

In fact, Updegrave (and other experts) believe it’s important to focus on the retirement lifestyle you want first, and then run the numbers. A lot of retirement advice is based on “percentage of current income”, but a more accurate picture of your needs can be obtained by looking at your current expenses. It’s important to look at both income and expenses.

If you, too, like to crunch the numbers to explore the feasibility of early retirement, be sure to remember the following:

• If you retire at young, you will not be able to draw on Social Security for several years. You’ll have to tap into more of your savings.
• You also won’t qualify for Medicare for many years, so you’ll need to consider healthcare costs.
• There are penalties for accessing certain retirement accounts early, so it’s better to withdraw from taxable accounts first and save tax-deferred for later.

Whatever your plans, it’s important to start saving as much as possible as soon as possible. A story from Monday’s Morning Edition on NPR described how older workers are more frequently opting to remain in the workforce rather than retire. For some, it’s because of the economy. But for many others, it’s because they didn’t save enough when they were younger.

Updegrave’s subject has $850,000 saved at age 50. I’m 39, and am a long way from that. It may be that my dreams of early retirement are just that — dreams. But that’s not going to stop me from working toward that goal.

Personal finance is filled with tough decisions. Prepay the mortgage or invest the money? Pay down high interest debt first or use a debt snowball to tackle the small balances? Roth IRA or traditional IRA?

Sara wrote recently with another dilemma I think many of us have faced: is it better to pay down debt or to begin investing for the future?

I’m 28. I work at a job with no retirement benefits and I want to open a Roth IRA.

My husband and I have about $9,000 in credit debt on a credit card which, unfortunately, has a high interest rate. (I plan on transferring the balance soon, but am investigating cards carefully.) We also have a small loan that we are paying off quickly.  

Your recent posts on the benefits of compound interest for retirement are making me question my current plan of “pay off all debts first, then invest”. I don’t want to lose out on the benefit of time any longer. What should I do? If I have $600 a month to throw at something, is it better to focus it all on the debt, or start on my Roth?

In this case, it might be helpful to reframe the question. Would you take out a loan at 12% or 15% or 18% interest in order to make an investment with an uncertain return (but which would most likely yield about 8%)? That’s basically the situation here. From a purely mathematical perspective, it doesn’t make much sense.

But there’s more than math involved in this decision. Building retirement savings can be a powerful motivator. Just getting in the habit of setting money aside is a valuable skill itself. Although there’s a cost involved, I wouldn’t say that it’s wrong to save for retirement while also repaying debt.

As always, do what works for you. If the debt bothers you, or if you think you might struggle to pay it off otherwise, then focus on the debt. But if you’re worried about the lack of retirement savings, then focus on that.

I did a little of both. While I was paying off my debt, I began to set aside a little cash every month to fund my retirement. It wasn’t a lot at first — just $100 — but as my expenses dropped and my income grew, I was able to contribute more. This allowed me to get into the habit of saving while also making progress on debt reduction. I know that I wasn’t making the most of either situation, but I didn’t care — it felt right for me. (And to be honest, I’d probably take the same approach again.)

What about you? What would you do in a situation like this? (Or what have you done in a situation like this?) Would you sacrifice a few hundred dollars in order to develop the saving habit? Or would you buckle down and get that debt paid off first?

On Saturday, The New York Times published a brilliant chart illustrating the spending of the average American:

“Each month, the Bureau of Labor Statistics gathers 84,000 prices in about 200 categories,” the paper writes, “like gasoline, bananas, dresses and garbage collection.” These numbers form the Consumer Price Index, one common measure of inflation. And this graphic makes that information accessible.

This chart is neat for several reasons:

• The circle itself represents 100% of the average consumer’s spending. The circle is divided into eight large shapes, each of which is divided further into a number of smaller shapes. The size of each shape represents an estimate of what the average American spends on the category it represents. For example, gasoline is the largest shape in the transportation category.
• Each shape is color-coded by the change in prices for that category between March 2007 and March 2008. The three dark red shapes (representing price increases of more than 40%) are all petroleum products. But eggs — with a 29.9% price increase — are close behind.
• Hovering over any shape will reveal the category name, the share of spending from the average budget, and the amount by which prices have changed in the past year.
• You can use the “zoom in” tool to get a better view of the action, and then drag the chart around to look at different categories. It’s only by doing this that you can see lettuce has its own category, and that the green, leafy stuff has declined in price by 3.2% over the past twelve months.

I’ll confess to feeling like a total geek because I spent twenty minutes exploring the different numbers. I even started taking notes and making extrapolations and comparisons.

For example, Americans, as a whole, spend three times as much money on cigarettes as they do on financial services. Actually, because we know that 0.7% of expenditures are made to cigarettes, and because we know that 21% of Americans smoke, then (if my math is right) about 3.5% of a smoker’s expenses go to cigarettes. (Note that I’m not criticizing. At one time, comic books accounted for 7% of my own expenses.)

I would love to find more charts and graphs like this one. (The New York Times has a history of producing great charts and graphs, such as their graph of home values from 2006 and their rent vs. buy calculator.)

[The New York Times: All of inflation's little parts]

This piece originally appeared at Andrea’s Consultant Journal in a slightly different format.

Exercise is a funny thing. When you start a fitness regimen, you feel awful, especially if it’s been months (or years) since you’ve been physically active. The first couple of weeks can be grueling. But once you make it a habit, once you find the groove, exercise can become exhilarating, even addictive.

During the summer of 1997, I lost 40 pounds. My ten-year high school reunion was approaching, and I wanted to look good. I made it a goal to get fit.

On May 8th — clocking in at 200 big ones — I got on a bicycle and rode 2.4 miles. I felt terrible. My shorts barely fit. I moved slowly. I had to get off and walk at the big hill. I had no endurance.

I felt like a cow on wheels.

That first ride was short and painful. Many people claim that the first time you make any sort of change is the most important. I disagree. I think the second ride was more important than the first. Anyone can take just one ride. It took tremendous force of will for me to get back on that bike again May 9th.

But I did get back in the saddle, and then again the following day. I didn’t ride everyday, but I stuck to it as best I could. I kept reminding myself of the ten-year reunion.

Progress was slow at first. My mental fitness changed before I made any significant gains to my physical fitness. (Today I know that must always be true, but back then it seemed odd.) But eventually changes did happen.

My strength improved. My belly shrunk. Then one day I made it to the top of the hill without having to walk the bike. Such a small victory, but so important, too! I felt a sense of accomplishment out of proportion with the actual achievement.

My rides began to lengthen: 3-1/2 miles, five, ten. I would reach my normal turnaround spot and tell myself, “I can go farther today!” And I would!

By the middle of August 1997, I was riding ten miles in half an hour, when once I could only ride five. One afternoon, on a lark, I spent ninety minutes riding 25 miles through the Oregon countryside. It was awesome. I felt awesome. My legs looked awesome. I was in the best condition of my life.

In fact, by the time autumn gave way to winter, I had lost 42 pounds. When my class reunion rolled around, I was happy to attend. I was proud of what I had accomplished.

But it didn’t happen overnight. First, I had to get on the bike. More than that — I had to get back out there a second day.

Note: As most of you know, I’m again trying to become physically fit. I’m taking the lessons I learned while defeating debt and applying them to diet and fitness. I’ve been chronicling my experience at Get Fit Slowly.

Some of you will wake tomorrow to find the same post at GRS you saw briefly on Tuesday morning (the bike metaphor). You’ll be confused. “Is this a re-run?” you’ll wonder. It’s not. It’s a technical glitch, for which I apologize.

This site runs on WordPress, a popular blogging platform. There are many good things about WordPress, but the software was recently upgraded, and frankly WordPress 2.5 sucks. There’s a lot of behind-the-scenes suckage from a blogger’s standpoint, but what’s worse is that there are at least two problems that affect readers.

Sometimes — for no discernible reason — posts I have scheduled for days (or weeks) in the future suddenly “go live”. This happened a few Sundays ago when an entry scheduled for June went live in April. (An entry that currently only contains a single link!) And it happened on Tuesday, when the entry scheduled for tomorrow went live. There are other problems, too. For example, I cannot delete comments on some entries. Very frustrating.

Enough grousing. What you really want are articles about personal finance. I’ve collected a pile of them!

What would you do with $1,000? That’s the question U.S. News and World Report’s Alpha Consumer, Kimberly Palmer, asked three personal finance bloggers recently. She posted my reply today, and will share other responses over the next couple days. Palmer is also holding a contest. She wants to know what you would do with an unexpected $1,000 windfall. Would you save it? Spend it? Give it away? Answer this question at Alpha Consumer to have a chance to win.

Meanwhile, Kristy at Master Your Card has an awesome piece about not judging a book by its cover (where book means: “dude in a bank”). She works in the banking industry, and has learned that you cannot assume that you know someone’s worth just by looking at them. This is 100% true, and someday soon I’ll share an example from my own life.

JLP at All Financial Matters recently wrote about a topic very relevant to my life: how to squash the new car bug. “Our Buick Rendezvous will be six years old on June 1,” he says. “The idiot side of me wants a new car.” JLP wants a Buick Enclave and not a Mini Cooper, but otherwise our situations are similar. I, too, have had to learn to shake the new car itch.

Elsewhere, Money magazine has a great “money makeover” this month. They profile a wealthy couple in their mid-thirties who keep a lot of their money in money-market fund. They’re much too young to play it safe, the article says, and should be thinking long-term. I often find these sorts of pieces boring, but for some reason I liked this one.

Finally, the Los Angeles Times recently printed a piece from P.J. O’Rourke about fairness, idealism, and other atrocities. I’m not a big O’Rourke fan, but I liked this article. His advice: go out and make a bunch of money, don’t be an idealist, get politically uninvolved, and forget about fairness.

See you tomorrow morning with the “re-run that isn’t”.

“How much time do you spend blogging?” people often ask me.

“I don’t know,” I say. “A lot. Probably forty to sixty hours a week.” I’ve always wished I could provide a better answer to that question. Now I can.

During his recent “fireside chat” with Google, Tim Ferriss mentioned a new application he’s been using called RescueTime. He didn’t elaborate, only mentioning it in an off-hand sort of way, but I was intrigued.

It turns out that RescueTime is a tool to measure how you’re spending your time on the computer. It’s simple to use. To get started you simply:

• Download and install a small application on your local computer(s).
• Establish an account at the RescueTime web site.
• Work as normal.

RescueTime works in the background, tracking the applications you use and the web sites you visit. Every twenty minutes, it sends this information to the web. Whenever you’re curious, you can visit the RescueTime dashboard to find out how you’ve been spending your time. For example, here’s a pair of graphs taken near the end of my first day using the software:

Yesterday I spend nine hours and nine minutes on the computer. That’s too much. But that’s also the point — I didn’t have a good sense for how long I spent online. RescueTime gives me concrete information about my productivity.

RescueTime also provides a chart of my most-frequenlty used apps and sites. Yesterday, I spent about 3-1/2 hours in BBEdit, my text editor, most of which was spent on the Robert Kiyosaki piece. I also spent an hour answering e-mail, and an hour handling miscellaneous tasks at Get Rich Slowly. More data is available in other reports.

RescueTime encourages users to “tag” each site or application with terms such as “work, personal, writing, goofing around” and so on. After you’ve tagged an item, you can set goals and alerts. You might, for example, set a goal to spend less than an hour a day reading blogs. Or maybe you want to spend at least four hours a day on work-related projects.

I’m only just beginning to use RescueTime, but I love it. It has the potential to revolutionize the way I work. Just knowing how much time I’m spending at various sites and tasks makes a difference.

The problem with the standard financial advice is that it’s bad advice. You’ve been told to work hard, save money, get out of debt, live below your means, and invest in a well-diversified portfolio of mutual funds. But this advice is obsolete — so argues Robert Kiyosaki in his new book, Rich Dad’s Increase Your Financial IQ.

Increase Your Financial IQ is the latest installment in Kiyosaki’s tremendously popular “Rich Dad” series of books. These best-sellers have motivated many people (including me) to take control of their financial lives. But some (including me) have expressed concerns over the author’s advice:

• The Wall Street Journal: Rich men, poor advice
• Kiplinger’s Personal Finance: They say they want you to be rich
• John T. Reed: An analysis of Rich Dad, Poor Dad

Kiyosaki loves to play the rogue, offering unconventional suggestions for building wealth. He’s a vocal detractor of mutual funds, for example, and frequently seems to be pushing a new “hot” investment: real estate, oil, gold, silver. He likes to make provocative claims like “people should not live below their means”.

Yet if you dig a little deeper, it becomes clear that Kiyosaki is saying a lot of this just to get attention. It’s a marketing ploy. He really does think it’s important to spend less than you earn — he just thinks the best approach to a budget deficit is to raise your earning power instead of reducing spending. Armed with my own advice about how to read a personal finance book, I decided to give Increase Your Financial IQ a chance. I approached it with an open mind. Ultimately I read it three times. I’m still not sure what to think of it.

Financial Intelligence
“It is not real estate, stocks, mutual funds, businesses, or money that make a person rich,” Kiyosaki writes. “It is information, knowledge, wisdom, and know-how, a.k.a. financial intelligence, that makes one wealthy.” He notes that buying a new set of golf clubs won’t improve your game, but paying for lessons will. It’s his hope that Increase Your Financial IQ can help readers improve their money “game”.

Kiyosaki divides financial intelligence into five “Financial IQs”:

1. Making more money. This is measured by how much money you earn. If you make $100,000 a year, you have a higher Financial IQ than someone earning $30,000 a year.
2. Protecting your money. Once you earn your money, you need to hold onto it. Protecting your money, especially from taxes, is the second Financial IQ.
3. Budgeting your money. “Being able to live well and still invest no matter how much you make requires a high level of financial intelligence,” Kiyosaki writes. This Financial IQ is measured by how much money you have left after expenses.
4. Leveraging your money. This Financial IQ is measured by return on investment. How well do you make your budget surplus generate more money?
5. Improving your financial information. Financial information doesn’t just mean knowledge of basic financial concepts — it also means detailed knowledge of the investments you make.

Most of the book is devoted to exploring these five aspects of financial intelligence in detail.

Financial IQ #1: Making More Money
Many people fail to acquire wealth, Kiyosaki says, because they want the money without the work. “What many people do not realize,” he writes, “is that it’s the process that makes them rich, not the money.” It’s by learning to make money that you can continue to make money. For each person, the process will be different. We each have different goals, dreams, and ambitions. The important thing is to find the best way for you to make more money, and then to build your goals around this.

In order to make money, you must also learn to control your emotions. You must learn to defer gratification. Don’t sacrifice your financial future for a few bucks today. Don’t give up. The going can seem tough at times, but if you’re confident in your course, you can learn to solve the problems. Keep your eyes on your goal and find a way to reach it.

According to Kiyosaki, the key to making money is learning to solve problems. “In order to grow wealthy,” he writes, “you must come to terms with the fact that problems will never go away.” Identify the problems preventing you from wealth, tackle them head-on, and the money will follow.

Financial IQ #2: Protecting Your Money
Once you’ve begun to make money, you need to protect it from “financial predators”. Kiyosaki says there are seven of them to beware:

1. Bureaucrats — Kiyosaki acknowledges the need to pay taxes, but he argues that it’s his job to (legally) pay as little as possible.
2. Bankers — Banks are constantly trying to siphon bits of your money in the form of fees. It’s important to watch out for and protect against this.
3. Brokers — Similarly, fees from brokers can chip away at your wealth. He cites brokers who “churn” accounts, buying and selling stocks frequently in order to generate more commissions. (We had this happen to us once with the box factory’s retirement account.)
4. Businesses — “All businesses have something to sell,” Kiyosaki writes. Their job is to part you from your money; yours is to keep it. Kiyosaki suggests asking yourself whether any particular purchase will make you richer or poorer.
5. Brides and beaus — Money plays an key role in any relationship. You must trust your partner, must reach an understanding about finances.
6. Brothers-in-law — Here, Kiyosaki’s “B” theme is stretched to its limit. His point is that in order to protect your estate from family members you don’t intend to share it with, you need to plan for your death.
7. Barristers — Finally, it’s important to protect yourself from legal difficulties.

Though Kiyosaki lists seven possible pitfalls, he offers little practical advice for coping with them. How does one go about paying as little tax as possible? What is the best way to approach estate planning?

Financial IQ #3: Budgeting Your Money
There are two ways to solve a budget crunch: decrease your spending or increase your income. Either will erase a budget deficit, but Kiyosaki believes (as I do) that in the long run, increasing income is a better solution.

Kiyosaki explains that it’s important to think of a budget surplus a fixed expense. If you decide to save 10% of your income, then make this ten percent a fixed item in your budget. Treat it just as you would any other bill. Pay yourself first. “You can tell a person’s future by looking at what they spend their time and money on,” writes Kiyosaki (channeling the voice of Rich Dad). “Time and money are very important assets. Spend them wisely.”

Kiyosaki notes that when things get rough, people tend to cut back rather than spend. But if they’d simply prioritize spending, they could actually improve the situation. Spend less on beer and pretzels, sure, but spend more on continued education and self-promotion.

Refuse to live below your means, Kiyosaki writes. Instead, increase your means.

Financial IQ #4: Leveraging Your Money
This is the longest and most frustrating chapter of the entire book. It represents the core of Kiyosaki’s financial philosophy, yet it’s not presented in a way that makes it relevant to average people like you and me.

Leverage — borrowing money to increase the power of your own cash — is good, Kiyosaki says, if you have the financial intelligence to control the investment. But if you’re not in control of the investment, then leverage is risky. “Most of the people being hurt by the real estate meltdown are people who were counting on the real estate market to keep going up and increasing their home’s value,” he writes. They borrowed against their home’s inflated value, but had no control over whether the housing market rose or fell. This is a lack of financial intelligence.

Instead, Kiyosaki argues, one should use leverage to make low-risk investments, investments in which you, as the investor, have control. This sounds great, but he doesn’t provide any relevant examples. He discusses his recent purchase of a 300-unit, $17 million apartment complex in Tulsa, Oklahoma. “[This] is a good investment to use leverage with because I have control over the operations, and the operations…determine the value of the investment.”

But what if I don’t have $17 million? What if I only have $17,000? Or $1,700? How does the average person make leverage work for her? (This is one of the interview questions I submitted to Kiyosaki — I still haven’t received a reply.)

Financial IQ #5: Improving Your Financial Information
Warren Buffett is the most successful investor of all time, yet he never takes a gamble. Buffett (and his partner, Charlie Munger) conduct extensive research for every decision they make. Before they buy a company, they want to know everything about it. Obtaining this information allows them to invest with confidence.

By contrast, I’ve made some really dumb investments. I’ve purchased stocks on the hope that they would increase. These sorts of decisions are not based on information — they’re based on emotion.

In order to improve your financial information, it’s important to:

• Separate fact from opinion. Many gurus are happy to offer their opinions — “gold is going up!” — but it’s foolish to make financial decisions based on these. Base your decisions on facts.
• Verify information. Don’t trust just one source of information, but seek confirmation from other parties.
• Know the rules. If you don’t understand how an investment works, don’t make it. “Rules provide a valuable source of information about how the game of money is played,” Kiyosaki writes.
• Understand trends. Trends are historical facts. Smart investors can use trends to make informed decisions. However, it’s important to note that trends do not project to future facts — only to opinions about possible futures. Still, trends are valuable sources of financial information.

“Ultimately,” Kiyosaki writes, “it is not the asset that makes you rich. Information makes you rich.”

Developing Your Financial Genius
Though an overview of the five Financial IQs forms the bulk of this 200 page book, it’s actually the last fifty pages that hold the most value. It is in these three chapters that Kiyosaki discusses “the integrity of money” and explains how to develop your financial genius.

He offers interesting recommendations, such as the importance of producing personal financial statements. He writes about bringing your financial actions in line with your beliefs. He writes about the psychology of money, giving special attention to fear of failure. He writes about the power of financial environments. If you want to become richer and more successful, he says, it becomes critical that you find an environment that allows you to grow and develop.

Financial Integrity
I like the idea of Rich Dad’s Increase Your Financial IQ. The book fills a niche about which little has been written. It’s motivational. I love Kiyosaki’s Big Ideas. They’re a breath of fresh air, offering a perspective often missing in personal finance discussion. I also like that his writing always motivates me to action, pushing me to pursue my goals.

However — and this is a big however — I’m often frustrated by the specifics in his books. Increase Your Financial IQ is no exception. It’s not just that I disagree with him; I actually believe he’s wrong. Let’s look at an example.

Kiyosaki does not believe in diversification. He spends a lot of time criticizing financial experts who recommend a well-diversified portfolio of mutual funds. “The problem with that advice is most advisors don’t know if it will work over time,” he writes. “I want to ask the expert, ‘Will you guarantee that this financial strategy will work?’”

But then Kiyosaki admits that he cannot guarantee his own strategies. I’m puzzled. Why condemn the conventional wisdom for a weakness you admit your own methods possess? At least proponents of index funds have a long history of facts and trends to support their assertions. Isn’t this one of the very components of financial intelligence this book purportedly praises?

It’s stuff like this that prevents me from recommending Kiyosaki’s books without reservation. Diversification isn’t a hoax. It isn’t a scam. Other than Kiyosaki, it’s embraced by almost every financial author I’ve ever read. Diversification is a central tenet of modern portfolio theory. It’s backed by facts, not opinions.

“The richest investor in the world, Warren Buffett, does not diversify,” Kiyosaki says. His implication is that you should not diversify either, but that’s completely counter to what Buffett believes. Buffett does not diversify because he’s a professional. His life work is investing. For 99% of all investors, Buffett recommends diversified index funds. (”Maybe more than 99%,” Buffet has said.) It’s disingenuous of Kiyosaki to pretend otherwise.

There are other problems of the same nature in Kiyosaki’s books. That doesn’t mean they don’t have value. They do. Many people (and I’m one of them) have found the Rich Dad series a powerful motivator. I just think it’s important to read these books — and all personal finance books, for that matter — with an active filter, questioning what you read, picking the parts that apply to your life and discarding the rest. To me, that’s real financial intelligence.

You can read other reviews of Increase Your Financial IQ at these sites:

• Blueprint for Financial Prosperity (Jim likes it because it deals with high-level concepts.)
• Cash Money Life (Like me, Patrick has mixed feelings about the book.)
• Zen Personal Finance (Justin likes the core of the book, though he feels it’s recycled material.)
• Million Dollar Journey (MDJ, too, thinks there’s both good and bad here)

This is a guest post from Betsy Teutsch, who writes about socially responsible investing, savvy consuming, and sustainable living at Money Changes Things.

The practical side of me loves wedding registries, and the values-driven side of me has grown to loathe them as brides and grooms seem ever bossier. Registries are nothing new, of course. We registered for gifts in 1973, and as a result received two lovely sets of china and ten place-settings of silver. Beyond that, it was open season: we received all sorts of gifts we had not designated. Most we used, a few we actively hated, and many we came to appreciate and even love over time.  (Regifting hadn’t been “invented” back then.).  From the point of view of the brides and grooms, wedding registries have many upsides.  But let’s look at it from the perspective of the gift-giver.

Pros and cons
The pros of a gift registry are:

• Efficiency. You can order the gift and you’re done. The store ships it and you don’t have to wrap it, schlep it, or even buy a card.
• The couple picks what they want, and you know your gift is to their taste, which is especially helpful if you hate shopping or don’t know the couple well enough to key in to their life style. Easy. Done.

From my point of view, the negative list is more extensive:

• It’s impersonal. No way to write a note to go with your gift, except electronically.
• The choices are not prioritized. Recently, after scrolling through scores of chosen items, I finally decided to just purchase a gift certificate from the registry and let the couple decide. Wrapping and shipping would have been an extra $20, which seems mostly wasted.
• The options are overly directed. The attitude expressed, even if it’s not intentional, is DON’T EVEN THINK ABOUT GIVING US SOMETHING NOT ON OUR LIST! I find it arrogant that young couples think they know more about what they will need over a lifetime than people who have actually lived a generation or two longer. This is often the case because the couple is using a store registry, which is a fixed template without options to comment or personalize any aspect of the choices.  They come off sounding very dictatorial.
• I don’t like being limited to chain stores and/or mass produced items. Some of my favorite wedding gifts are pottery and other handmade crafts, which cannot be purchased from a registry. It’s also nice to give a family heirloom or something more personal.
• I still might very well decide to give them a place setting of something they’ve chosen, or whatever, but as a sport PSAWSWLD [J.D.'s note: Yeah, I had to click that link, too.], I could probably find it cheaper elsewhere online, and/or perhaps using Amazon Prime’s free shipping, thereby giving them a more valuable gift.
• I am often turned off by the actual items chosen since they are way pricier and extravagant than anything I have ever owned. (And I’ve lived a perfectly abundant life!) I like to feel simpatico with the gift I’m giving, since it’s an expression of my values.
• I dislike not knowing whether our gift arrived, since brides and grooms (or bride + bride and groom + groom) are often really terrible about writing thank-yous.  My preference is to bring the gift with me to the wedding, if I am attending. Not an option with a registry — the whole point is to ship the gift directly to the couple.  They haven’t added return receipts for the giver, so far as I know,  so if you never receive an acknowledgment, you don’t know if it’s just another inconsiderate bride and groom screwing up, or if your gift didn’t arrive, and they think you are a creep.
• The old-fashioned side of me feels uncomfortable with the couple knowing precisely, down to the dime, what I spent on their gift. It feels so calculated. I mean, why don’t they just send a bill?!

Other options
A few brides and grooms I know have worked to transcend the tax-assessment feel of store registries. While they feel obliged to include conventional stores on their wedding sites (because that’s what lots of their guests do prefer), they expand their suggestions, including favorite charities and causes. One couple said they would love gift certificates to local bookstores and garden shops and described their garden, giving their guests a sense of their values and passions. A few years ago we gave a giant composter to this couple, since they had included it on a wishlist, and it really spoke to me; I totally enjoyed sending it to them. The fancy china comes out maybe once a year, but that composter is used every day!

Another way some couples counteract the gimmes is to ask for non-material gifts. Recently all the invitees to a wedding we attended were asked by the bride’s friend to submit a favorite recipe, which they made into a cookbook for the bride and groom. Another woman I know did something similar for her future daughter-in-law, collecting recipes from all the immediate family, including copies of recipes written by grandmothers no longer alive. (She made copies for all the contributors, and I’m sure they are treasured!)

A nice custom in the Jewish community is to send close friends and family fabric squares to decorate, which are then sent back and stitched together to create the wedding canopy. None of these touches are instead of a material gift, but they serve to make guests feel like they are more than ATMs.

Some couples create an online donation registry in lieu of gifts, but the site notifies the couple of the amount of each contribution, something which makes some people (like me, for example!) uncomfortable. I recently received a link to New American Dream’s registry where the celebrants (brides and grooms, new parents, etc) can set up a registry asking for whatever they like, mixing purchased and guest-created items. Their sample asks for recipes, food for potluck weddings, advice, and fair-traded household things. Very nice idea for a small, simple event, but for a conventional, fancy wedding, I think it would freak people out. (It would be a nice additional alternative to a conventional registry, though; a couple could do both, and explain their thinking on their wedding website, the new de rigeur system for communicating wedding plans.)

And what about the most obvious wedding gift? Cold cash, of course. It’s nice to receive, but I can tell you, 33 years later, it’s the beautiful, thoughtful items which I enjoy, the cash long ago having been plowed into aggregate savings. Many of the brides and grooms I know are mature and earn more than I do, so in those cases money feels like a weird gift. (If the couple is a pair of starving students, money is still a great idea, perhaps along with a smaller material item.)

Let’s hear what you all think about wedding registries, pro or con, and from both givers and receivers’ points of view. Are they a necessary evil, a godsend, or something in between?

Teutsch previously told GRS readers about the pros and cons of working at home and discussed how to get a grip on consumerism.

I often ponder which direction I should take Get Rich Slowly. Build the site? Write a book? Convince that other J.D. Roth to develop a television show around the premise?

My latest harebrained idea (which I’m only sharing because I’ve dismissed it) is to start a chain of Get Rich Slowly stores. I’d stock them with great personal finance books, magazines, and software, employ smart people who want to help others succeed at personal finance, and offer seminars on financial topics. The biggest problem? How to keep such a place from losing money!

Here are some recent articles with sensible ideas about personal finance:

Does money follow passion? That’s the question that Chris from The Art of Non-Conformity posed recently to a group of bloggers. “Not necessarily,” is the consensus. I said: “I think it’s more apt to say that happiness is related to doing what you love.” It’s more important to be happy than it is to be rich.

At Wise Bread, Philip Brewer has been churning out one great article after another lately. His piece on finding work worth doing relates to the post on money and passion I just mentioned. But I think his article on budgeting in a time of inflation is more practical. “The number one tool for dealing with inflation,” he writes, “is to have a contingency plan in your budget.” (If you’re not worried about inflation, you should be.)

Finally, Betsy sent me an article from Business Week that profiles a terrific mash-up that targets people just like me. Daniel H. Pink (author of Free Agent Nation) has written a comic book called The Adventures of Johnny Bunko: The Last Career Guide You’ll Ever Need. Mixing personal finance and comics? Brilliant! Maybe that’s the direction I should take Get Rich Slowly…

On Saturday, I wrote about my transition from spender to saver. I mentioned that I’d recently peeked at the latest camera equipment. “I spent twenty minutes on Amazon, drooling over the Nikon D300,” I wrote. “I’m tempted — but not much. I’d rather save that $1,800 for the future.”

Reader Kristi Wachter left an astute comment:

$1800? That’s, what, 6% of a Mini Cooper?

This is an excellent way to look at proposed expenses: re-frame the purchase in terms of something you already value. I’ve already spent several months coveting a Mini Cooper. By looking at the new camera in terms of how much Mini it would cost me — 6%! — I get a better idea of the sacrifice I’d have to make to buy it. It makes the idea more concrete. In a way, the Mini Cooper has become a sort of personal currency.

Money is an abstract concept. It really represents time and labor, and those are hard to visualize. By finding something concrete to use as a measure of value instead, it’s easier to visualize how much something is really worth to you.

For example, my wife sometimes measures things in lattés. If she sees something in a store, she’ll stop and consider: “That vase is three lattes” or “Those shoes are ten lattés” or “That book is two lattés”. By looking at things in this way, she’s able to figure out how much they’re actually worth.

Our friend Marla measures things in Saturns. She loves her car (a Saturn, naturally), and so whenever somebody mentions something expensive, she’s able to compute its value to her. A fancy plasma TV might be one-fifth of a Saturn, for example. A house might be ten or twenty Saturns.

Last night at dinner, I mentioned this notion to our friends Mike and Rhonda. “Oh, we used to do that all the time,” Rhonda said. “When we were first married, we lived near a sushi place. We loved their rainbow rolls, but they were kind of expensive. Whenever we got paid, we’d convert the dollars to rainbow rolls.”

Obviously these sort of personal currencies aren’t sophisticated financial tools. They are, however, quick and easy ways for each of us to measure the relative value of the things we buy.