Psychology of Money

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7Wannabe5
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Re: Psychology of Money

Post by 7Wannabe5 » Wed Jun 13, 2018 9:03 am

classical_Liberal wrote:What this does mean is that losing the option of expensive signaling (ie turning off a one way cash spigot) is more important to men than it is to women in mating prospects. IOW, maintaining enough money for signaling is much less important to 7WB5 than it is to 23 yr old male ERE adherent. Again, know the price you are paying.
Well, if you turn the study IlliniDave linked around and view it from other perspective, it also could be used to prove that men care about almost nothing besides physical appearance (which is held invariant in photos) when dating/mating. IOW, a superficial study of general population is bound to produce superficial general population results. That said, I do agree that females, because just a bit more sensible or security-oriented, are more likely to shop for "life-style" factors earlier on in the process, especially if shopping for the long run.

Anyways, I would note for the record that my current BF who makes at least 3X more money than me on a bad day and covers all of my basic living expenses, doesn't think I am particularly good-looking. In fact, we both agree that he is better looking than me, and he says terrible things like "That garden center job doesn't even pay enough to make it worth the hassle, but I think you should keep it because you need the work-out." (True :( ) So, probably the reason why he hasn't dumped me yet is that it is more difficult to replace a female above the 99.9th percentile for intelligence and 65th percentile for attractiveness than it is to replace a man who is in the 93rd percentile for earnings and 85th percentile for attractiveness. Also, because his net worth is not at risk, because we are not married and would never be married without a pre-nup and/or because the word "marriage" immediately summons up "buried alive" feelings within me.

I would also note that due to a strong strand of perversity in human nature, it seems like it may be the case that men who are affluent enough to own yachts, may have preference for the sort of female who exhibit a form of behavior that is colloquially referred to as "f8ck and run." IOW, or more generally, humans who honestly don't expect much of anything from other humans are generally regarded as attractive by members of both genders.

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BRUTE
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Re: Psychology of Money

Post by BRUTE » Wed Jun 13, 2018 10:17 am

7Wannabe5 wrote:
Wed Jun 13, 2018 9:03 am
f8ck and run
is that similar to "pump and dump"?

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7Wannabe5
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Re: Psychology of Money

Post by 7Wannabe5 » Wed Jun 13, 2018 10:36 am

@BRUTE:

Yeah, same thing. I don't usually do that sort of thing, but I had just broken up with a very over-bearing man, so I was over-protecting my liberty.

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Re: Psychology of Money

Post by wolf » Wed Jun 13, 2018 11:48 am

7Wannabe5 wrote:
Mon Jun 11, 2018 1:32 pm
jacob wrote:I'd submit that most people here who are in runaway mode(*) will end up somewhere in the high-millions (AFTER adjusting for inflation) but that's if and only if they live to 95+ (which both of these admins did).
Yeah, this seems obvious to anybody who can do the math (IOW, almost everybody on this forum.) So, what is the motivation for accumulating more capital than is necessary to reasonably assure freedom? IOW, past the point of reasonable assurance, any individual would have to be trading freedom in the present for something other than freedom in the future. Ergo, there is some other aspect of money that is being secretly or subconsciously sought through further accumulation, like maybe just becoming a millionaire.
I struggle with that question also. Why does some people accumulate more than they need?

And I think this is probably true for some/many (including me) on this forum. Because I am risk averse and financially conservative, I end up saving more than I planned/wanted to. This is true for a month, a year and maybe for a lifespan.

And then I struggle, because I (and many other ERE'es) try to live as productive as possible. Why does that not also count for money?

If one will end up with many hundred thousends, if not millions, because of the runaway mode, how is that productive? Well, I guess there could be various reasons for that.

In the end I think it is about the following question: Why does one wants/saves more than one needs in a lifetime?

One reason, which is being discussed currently, is mating chances.
Another reason could be greed. I saw some good documentary about it. It is called "Money, happiness and eternal life - Greed" and you could find it here: https://www.youtube.com/watch?v=CVuVlk2E_e4.

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Re: Psychology of Money

Post by jacob » Wed Jun 13, 2018 12:31 pm

Well, I didn't mean to overshoot(*). It just happened and once the compound-interest monster is out of the box, it's hard to put it back in. One of the big difference between extremely early FI and the FI that happens later or not at all is the our "hockey stick" happens when we're much younger than everybody else.

Let's recall that the exponential function is scale-free and thus technically there is no real hockey stick until you put scales on the axes. Those scales are, however, set by where the average person decides is "a lot of money" and interest rates are to a hefty degree determined by what people are willing to lend/borrow "a lot of money". Therefore, the inflexion point for the runaway is set where principle*ROI ~ median salary.

So how did it get out of the box?

If you dial it in exactly "right" so around 33x, then the odds are you will keep the monster in the box.

However, should you for any reason, whatsoever, earn any money EVER again, and fail to give it away immediately(!), then a little bit of the monster is now out. Earn some more and you let it out a bit more and now it'll start letting itself out (because compound).

One of the principles of ERE is to add value. Given how we live in a society that worships materialism and commercialism, it's pretty hard to add value without people offering to give you money. So basically, it's due to multiple decisions that all seemed small and innocent and personal at the time ... but which ultimately lead to an exponential runaway(*).

(*&*) Really no different than why there are now 7.6 Billion people on the planet. Nobody planned for this overshot. It just happened, one baby at a time.

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7Wannabe5
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Re: Psychology of Money

Post by 7Wannabe5 » Wed Jun 13, 2018 12:35 pm

@wolf:

I got side-tracked along with everyone else, but I was thinking about my 78 year old friend who still works full-time running his business, even though he is a multi-multi-millionaire and his standard of living is quite a bit worse than that of the average American. He is definitely not attempting to improve his mating possibilities through this activity. I think some sort of quest for immortality combined with simple compulsion mechanism is the best explanation for his behavior.

However, the general answer to my question would have to be that some other value associated, or believed to be associated, with money or frugality would have to be held in higher regard than "freedom." Some possibilities might be "sexual status", "power", "conservation of resources", "responsibility towards offspring or other family members", "proof of worth-through-work" , or "winning." I mention "conservation of resources" in particular, because it is possible to find yourself in runaway mode through mechanism of becoming even more frugal after retirement rather than by continuing to purposefully choose to work for longer than is rationally necessary.

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Re: Psychology of Money

Post by Sclass » Wed Jun 13, 2018 1:03 pm

wolf wrote:
Wed Jun 13, 2018 11:48 am

In the end I think it is about the following question: Why does one wants/saves more than one needs in a lifetime?

One reason, which is being discussed currently, is mating chances.
Another reason could be greed. I saw some good documentary about it. It is called "Money, happiness and eternal life - Greed" and you could find it here: https://www.youtube.com/watch?v=CVuVlk2E_e4.
Don’t forget fear. I don’t want to go back to the place I came from.

I’ve been struggling with the concept of enough the last few days and I’ve been asking myself these questions.

There’s greed. No matter how much I have, there is always something upmarket that I can not afford.

http://youtu.be/UxdCcZHMiDg

The mating stuff is just sick. But I guess that is how a lot of people are wired up. Now that I have enough money to attract the kind of women who get off on money alone I no longer want them. It’s kind of repulsive...maybe the way a woman feels when a guy talks to her just because she has large breasts.

I recall a bunch of my friends who bought exotic cars to “get girls”. They indeed “got girls” but it was never the ones they chose. It looked like the girls chose them.

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Re: Psychology of Money

Post by prognastat » Wed Jun 13, 2018 1:15 pm

Just like there are some men that only care about a woman's appearance there are some women that only care about a man's wealth.

In some cases when two of those meet it works just fine for them as he is happy having a beautiful wife and she enjoys his wealth and both are satisfied.

However, for many this isn't the case and in that case you want to be careful about what kind of signals you send out lest you end up with interest from someone that is primarily interested in one of those things.

One of the benefits of living an ERE lifestyle is that as a guy you are very unlikely to be sending out the kind of signals that will attract a woman primarily interested in wealth as you don't outwardly appear to be wealthy. It will definitely make dating harder as a not insignificant amount of women care about wealth even if it isn't he primary focus, however in return those you do connect with are less likely to disappoint.

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Re: Psychology of Money

Post by 7Wannabe5 » Wed Jun 13, 2018 1:29 pm

Sclass wrote:The mating stuff is just sick. But I guess that is how a lot of people are wired up. Now that I have enough money to attract the kind of women who get off on money alone I no longer want them. It’s kind of repulsive...maybe the way a woman feels when a guy talks to her just because she has large breasts.
This is related to what is known as "Siamese Twin Syndrome." Even a person who possesses a valued asset that she did nothing to acquire, such as large breasts, will simultaneously be revolted by demonstration of over-valuation and offended by under-valuation. It's not in your self-interest to maintain this perspective, because it will allow you to be manipulated by anybody who can hold notion of true valuation along with capability to communicate both over or under-evaluation as warranted.

Simple example would be the player move of offering an obviously beautiful woman a mild insult rather than a compliment.

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Re: Psychology of Money

Post by classical_Liberal » Wed Jun 13, 2018 4:02 pm

7Wannabe5 wrote:
Wed Jun 13, 2018 9:03 am
a superficial study of general population is bound to produce superficial general population results. That said, I do agree that females, because just a bit more sensible or security-oriented, are more likely to shop for "life-style" factors earlier on in the process, especially if shopping for the long run.
Agreed. You know as well as I do this slight shift in the middle can create huge changes in the tail distributions. These tails are what people tend to notice and is what media/advertising propagates. Per the articles hypothesis I quoted, many men see themselves as higher valued/more admired with expensive signalling and aspire towards it. The fact this behavior probably has very little impact in the middle distributions is completely missed.

Personally, I'll take smart and cute over drop dead gorgeous and dumb 6 out of 7 days a week :lol:
Sclass wrote:
Wed Jun 13, 2018 1:03 pm
Don’t forget fear.
Fear is they key in almost all motivation for runaway mode achievers. Score-keeping, mating, over conservative financial estimates, etc, are all based from fear.

I think it can be reasonably argued that someone saving 33X by a very young age has already acted partially in fear. If capital returns 3%, sure, the person is only FI without runaway mode. However, this person also has to assume all the following; they add no value to a capitalistic society for the remaining 50-60 years, all social safety nets (ie gov't pensions/SS) fail, in the following decades they never make a single investment bet that beats average ROI, no additional skills are learned to reduce outflows and waste, etc, etc. Like Jacob mentioned in his personal anechedote, it only takes a few, small personal decisions to tip the scale.

It's almost a forgone conclusion that some of these circumstances will play out to the postive, to assume otherwise is fear based. Hence runaway mode is a forgone conclusion at 33X+reasonable young age. ERE adherents will someday become anecdotes for future articles.

Back to 7WB5's comment of value of future money vs value of time now. If someone truly wants to avoid this situation (ie runaway or "over-saving" if you will), then they should plan for some of these positives, save a bit less, and allocate a bit of that saved energy towards active action to ensure one or more potential positives play out. But that's scary, cause you might be wrong, or fail, or [insert whatever], so most here choose to reach true FI. Fine and well, but as much as we'd like to say otherwise, such a choice is based more on psychology of fear than facts.

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Re: Psychology of Money

Post by Sclass » Wed Jun 13, 2018 4:04 pm

7Wannabe5 wrote:
Wed Jun 13, 2018 1:29 pm
... It's not in your self-interest to maintain this perspective, because it will allow you to be manipulated by anybody who can hold notion of true valuation along with capability to communicate both over or under-evaluation as warranted.

Simple example would be the player move of offering an obviously beautiful woman a mild insult rather than a compliment.
Really? I can see this working on some people. I had a friend, a player, who did just this when he seduced women. He used to tell me the pretty ones were the easiest. This guy had a good understanding of what made people tick. He was literally raised in a brothel. Of course I didn’t get it.

Then there are other people who’ll listen to the insult and do something totally unexpected.

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Re: Psychology of Money

Post by BRUTE » Wed Jun 13, 2018 8:38 pm

classical_Liberal wrote:
Wed Jun 13, 2018 4:02 pm
If someone truly wants to avoid this situation (ie runaway or "over-saving" if you will), then they should plan for some of these positives, save a bit less, and allocate a bit of that saved energy towards active action to ensure one or more potential positives play out.
this is why brute is currently planning on only 20% or "the 5% rule".

@Sclass: isn't that exactly what 7Wannabe5 said, that it works? this is known as "negging" by PUA humans.

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Re: Psychology of Money

Post by IlliniDave » Thu Jun 14, 2018 4:14 am

7Wannabe5 wrote:
Wed Jun 13, 2018 9:03 am

Well, if you turn the study IlliniDave linked around and view it from other perspective, it also could be used to prove that men care about almost nothing besides physical appearance (which is held invariant in photos) when dating/mating. IOW, a superficial study of general population is bound to produce superficial general population results. That said, I do agree that females, because just a bit more sensible or security-oriented, are more likely to shop for "life-style" factors earlier on in the process, especially if shopping for the long run.
In defense of those guys, attractiveness of the person is what they were specifically asked to gauge in the study via looking at photographs, so I don't think you can conclude either gender is only interested in only one thing or another from something like that. Rather than being a competition about genders and which one's motives are more base, it was offered simply as a non-judgemental acknowledgement that deep in the "reptile brain" jostling for status among immediate competitors (wrt humans, both genders seem to compete among themselves) in the game of replication (biologically the only game that matters) underpins a lot of behavior. For humans males, demonstrating you can scrape together and preserve more than the minimum resources you need to keep yourself limping along day-to-day is significant given how long it takes human children to grow to self sufficiency. A fact of life in contemporary "civilization" is that some fraction of the population are less able to keep the older encoded urges of the species in check. And that's not always bad, although it might mean that not only does your child have to compete with other children to get into Harvard, but you might have to compete with the other children's parents as well. None of that is an endorsement of anything, just a combination of observation and speculation.

Speaking for myself, intellectually I'm not interested in propagating the species beyond what I've already done (though my biology has not capitulated, so who knows what the lizard inside is up to). I have no qualms about watching my wealth grow. I don't know why that is. I don't foresee myself running around chasing money, but I don't see myself giving all but 1 jacob per year x my life expectancy away either. Maybe the parable of the talents haunts me subconsciously. Maybe I'm hardwired to maintain whatever status I subconsciously feel I've achieved. There's too much to untangle so I tend to just follow my gut and not worry about it too much.

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Re: Psychology of Money

Post by 7Wannabe5 » Thu Jun 14, 2018 6:47 am

@classical_Liberal:

Well, ultimately fear is the antonym of freedom, but what we are talking about here is just free time. So, maybe it is less about fear and more about not having a very compelling list of activities upon which you want to spend your hoard of free time?

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Re: Psychology of Money

Post by jacob » Thu Jun 14, 2018 2:38 pm

My experience for choosing my exit point: http://earlyretirementextreme.com/break ... areer.html
I don't see much/any fear-based reasoning in that post. However, I worked past my point of FI before I started thinking about "breaking up".

Strong interactions tend to be expressed at the boundary. (It's obvious/tautological from a systems perspective that the big chances happen at discontinuities.) Perhaps "fear" is only relevant for those who are trying to make the decision at the exact crossover point. If you go materially past the point, you have nothing to be afraid off. If you quit before you get near it, you already made a different choice [to keep pursuing work].

If this is true, then fear mainly comes from uncertainty along a personal dimension.

This dimension can be money for those who work for money ... or career aspirations for those who work for that, as I did ... or it can be something else, like a structured day ... noting that some FI people eventually go back to their old work because they find structure/meaning in it. The money is just a nice side-effect.

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Re: Psychology of Money

Post by IlliniDave » Thu Jun 14, 2018 7:18 pm

One thing that I'm certainly guilty of is using words like "fear" and "afraid" way too casually. In the context of retirement decision machinations it's a lot like standing on the edge of a steep bluff. I don't experience literal fear, but I maintain a healthy respect for the need avoid recklessness.

My anecdotal experience aligns with the last thing jacob said. One of the most common reactions I get when the topic of ER comes up is, "What are you going to do with all your time?"

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Re: Psychology of Money

Post by prognastat » Fri Jun 15, 2018 8:42 am

IlliniDave wrote:
Thu Jun 14, 2018 7:18 pm
One thing that I'm certainly guilty of is using words like "fear" and "afraid" way too casually. In the context of retirement decision machinations it's a lot like standing on the edge of a steep bluff. I don't experience literal fear, but I maintain a healthy respect for the need avoid recklessness.

My anecdotal experience aligns with the last thing jacob said. One of the most common reactions I get when the topic of ER comes up is, "What are you going to do with all your time?"
That question always makes me wonder how drab their lives must be if they don't have a bunch of things they want to do, but currently simply don't have the time for.

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Re: Psychology of Money

Post by Riggerjack » Fri Jun 15, 2018 10:19 am

Just catching up here. Let me get this straight, a bunch of us don't intend to be rich in retirement? Why not?

Myself, I am intending to stick it out to early pension, because it's close, and it's easy. If I just wanted out, I could leave now. But money is leverage, and as my physical stature changes, I'm looking for more ways to make up for it. Money just allows bigger projects. More money means fewer limits on my projects. Limiting money is adding limits to my projects. Choosing limits because the alternative is difficult or unpleasant makes sense, but my job is neither of those.

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Re: Psychology of Money

Post by Jean » Fri Jun 15, 2018 4:42 pm

On the opposite, i left very early because my job was unbearable to me. I only had à house with a debt that would stay bearable even with high interested rates.

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Re: Psychology of Money

Post by BRUTE » Fri Jun 15, 2018 5:04 pm

prognastat wrote:
Fri Jun 15, 2018 8:42 am
That question always makes me wonder how drab their lives must be if they don't have a bunch of things they want to do, but currently simply don't have the time for.
brute had always wondered the same thing. then it happened to him within a year or so.

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