Category Archives: book

Spousonomics: Using economics to master love, marriage, and dirty dishes

I love research-backed books that help us understand why we do what we do. Paula Szuchman and Jenny Anderson’s Spousonomics: Using Economics to Master Love, Marriage, and Dirty Dishes was no exception. The book takes a look at common marital conflicts and situations, showing the underlying economic principles that influence our actions. For example:

  • Division of labour: Splitting chores equally may not result in the most efficient or the happiest of marriages. Specialize, remembering that payoffs can change over time.
  • Loss aversion: People hate to lose, which can result in really drawn-out fights. The advice to “never go to bed angry” can backfire. It’s okay to have time-outs.
  • Supply and demand: If you want something to happen more often, don’t make it costly or risky.
  • Moral hazard: It’s easy to take good things for granted. It’s also easy to end up trying to avoid any sort of conflict. The sweet spot is in the middle, where you’re not taking your relationship for granted, but you’re not paranoid about your spouse quitting.
  • Incentives: Think about the incentives you use and if they’re really effective. Trust can be much more useful than nagging.
  • Trade-offs: Think at the margin: consider the costs and benefits of small changes. Ignore sunk costs when making decisions. Get over the “it’s not fair” fixation.
  • Asymmetric information: Communicate clearly. Don’t play games by hiding or withholding information. Figure out the essentials of what you need to share so that you don’t overload your spouse.
  • Intertemporal choice: It’s easy to make good decisions for the future, but hard to stick with those decisions in the present. Use commitment devices to help you stick with your resolutions or good ideas.
  • Bubbles: Non-bubbly married life is normal, so don’t stress out if you’re no longer infatuated. Beware of being unduly influenced by groups – just because everyone else seems to be doing something doesn’t mean it’s right for you, too. Don’t get overconfident.
  • Game theory: Don’t let the urge to retaliate or overcompensate lead to you to wildly polarized positions. Work together to get optimal results, not just individually-optimal results, and use commitment devices to help you stick with it.

The book goes into far more depth, and is an excellent read. It’s illustrated with case studies (problem couples who usually end up patching things up) and lots of research.

Here are some thoughts I particularly like:

If there are areas you care about but you feel helpless in, put in the time and effort to develop the comparative advantage in at least one of them. The authors tell the story of one economist who put the time into at least learning how to bathe an infant so that his wife wouldn’t end up with all the child-rearing tasks – and so that he wouldn’t get tempted to take advantage of that kind of a division.

Looking for things to read? In terms of marriage research, I’d recommend “Spousonomics” and Susan Page’s “The 8 Essential Traits of Couples who Thrive”. What do you like?

Book: Daddy Long Legs, and letters

A chance remark by the turtle about Daddy Long Legs led me to request the 1955 musical from the Toronto Public Library, and then to read the book online. Fred Astaire’s dance sequences (particularly the first one where he makes drumsticks dance better than most people do) and a couple of good lines, and a nice ending made me smile. Yes, the age gap’s bigger in the movie than it was in the book, and it must’ve been hard for Astaire to perform that with what was going on in his personal life, but it’s still a good one.

The book, on the other hand, was an unexpectedly delightful find. It’s written as a series of letters from this orphan-turned-aspiring-writer, with vivid descriptions and general cheer. I’m half-inspired to do more letter-writing myself, or to bring that kind of vivacity to my blog.

(Will you put up with descriptions of life? In any case, it is my blog, and I would like to be able to remember. =) Prepare for more adjectives!)

Now I am on the lookout for other epistolary gems. I have requested “A Woman of Independent Means” from the library, remembering my mom’s recommendation. Do you have any favourites?

Fun and rational economic theory: reflections on the book “The Logic of Life”

What do you do for fun? Why do you do it? Do you want to shift your patterns?

I was surprised to hear Gretchen Rubin (The Happiness Project) say at her book talk that most grown-ups don’t know what they would do for fun. I can easily list things I enjoy doing. I can probably even explain why I enjoy doing them and how I want to change or improve.

Sometimes knowing what you would do for fun isn’t easy. It forces you to confront the fact that you do not do some things for fun, that the intrinsic enjoyment of it is dormant or gone. For example, I realized that making or giving presentations had dropped off the list of things I enjoy doing just because.

Are there activities you would like to enjoy more? What about activities you’d like to enjoy less? I’m like that too. Rational economic theory to the rescue! If you look at what you enjoy doing, think about the costs and incentives of different activities, and work on ways to change those costs and incentives, you can make it easier for you to do the kinds of things you want to do and avoid the things you don’t. In this blog post, I’m going to see if this geeky way of looking at fun actually works.

The relevant quote from The Logic of Life: The Rational Economics of an Irrational World ( Tim Harford, 2008)

p4. Rational people respond to trade-offs and to incentives. When the
costs and benefits of something change, people change their behavior.
Rational people think – not always consciously – about the future as
well as the present as they try to anticipate likely consequences of
their actions in an uncertain world.

What do you do? What are your behaviours? What are the benefits? Let’s take a look at fun. Here’s what I do (roughly in order of preference), why I do them, and what I’d like to change.

Spending time with W-. This is an easy one. Pay-off: Richer relationships, more in-jokes, and quite a bit of learning along the way. We like cooking, discussing books, going for walks, and picking up shared hobbies, although we occasionally watch movies (mostly borrowed from the library). Cost: Time. Change: This part has good balance, so I don’t need to increase or decrease it.

Writing. I love writing down what I think and what I’m learning. I’ll even write as a way of procrastinating other things I need to do. Pay-off: The immediate benefits of understanding, the medium-term benefits of recall, and the long-term investment in a knowledgebase. The insights people share with me through comments and the insights they pick up from me through reading are icing on the cake. Cost: Time. Change: I think I spend a good enough amount of time on this and that I get great value for the time I spend on it. I might try spending less time on it.

Reading. I read voraciously. Fortunately, Toronto has one of the largest library systems in the world. Pay-off: I pick up new words and ideas that I can use in life and writing. Cost: Time and space. Change: although taking book notes and doing life experiments based on what I’ve read help me make sure I get more value from the time, I probably spend more time reading than I should. I get diminishing returns from, say, the Xth personal finance book I’ve read, and I suspect I sometimes read things to feel smug. ;) (Like the way people watch reality TV shows?) I can increase the cost of reading by planning to ask questions and write book notes for books that come in. I can increase the benefits of reading by sharing book notes and life experiments. I can shift to higher-value reading (new subjects, question-driven research).

Baking or cooking. I enjoy trying new recipes or making our favourites. Pay-off: Yummy food, new experiences, and closer relationships with W-, J-, and friends. Cost: Time and freezer/fridge/bread-box space. Change: Good balance here, no change needed. (Although it’s interesting that I’ve been procrastinating working on open source in favour of making bread, probably because the pay-off from appreciative family / friends makes me feel warmer and fuzzier.)

Walking or biking. Pay-off: Satisfaction of knowing I’m getting some exercise, long-term health benefits, and often shared time with W-. Cost: Wearing winter-friendly clothes when I’m working at home; making time for a walk when I’m at the office. Change: More of this, maybe at the expense of some writing. (Or maybe I can use walking time to think about what I want to write…) I can lower the costs by changing into going-out-friendly clothes when I’m working at home, and blocking out time for walks.

Planning and reviewing my finances. Yes, I actually enjoy doing my books and reviewing my plans. I’m weird. Pay-off: Satisfaction of knowing things are going well; confidence in being able to plan for purchases or goals. Cost: Time. Change: This doesn’t take a lot of time, but I should probably spend less time on this.

Organizing. Pay-off: Investment into being able to find things again, reducing frustration. The satisfaction of having a neat-ish place. Appreciation from W-. Cost: Time. Change: This is currently reasonable, although I could invest some time into simplifying and improving systems so that I can avoid even more clutter.

Playing the piano. Pay-off: Satisfaction from learning and from listening to music I’m playing. Mental exercise. Appreciation from W- and J-. Cost: Time. Change: I think this is okay. I might look into piano lessons if that will help me learn faster.

Gardening. Pay-off: Yummy food. Satisfaction of self-sufficiency (at least in small parts!). Experiences with nature. Shared experiences with W- and J-. Cost: Time and some money. Change: I want to do this more efficiently next growing season, working my way to a better yield.

Building furniture. Pay-off: Shared interests and shared time with W-. Custom items. The satisfaction of making things. Cost: Time, money, and risk. Change: More of this during the summer! =)

Sewing. Pay-off: Satisfaction of making things that fit my preferences. Cost: Frustration, time, some money. Task-switching cost – have to set up. Change: I’d like to do more of this. I can do that by starting with small projects, practising and improving my skills (so that I can reduce frustration), and attending lessons (formally blocks the time off, makes it easier to task-switch).

Working on open source. Pay-off: The buzz of solving problems; the convenience of programs that fit the way I work a little bit better; the appreciation of other people; improved technical skills. Costs: Task-switching (loading the relevant programs, remembering where I am and what I’m working on, getting into the swing of things); occasional bit of paperwork. Change: I’d like to do more of this, maybe by creating blocks of time where I can focus on open source.

Things that I would like to enjoy more:

Drawing. Pay-off: New skills; satisfaction from creating things; improved ability to communicate. Cost: Not entirely happy with drawing on my tablet yet; switching cost if I use the tablet downstairs. Change: If I get better at drawing through practice and learning, and I get used to drawing with one of the programs on my computer, then I’ll find this easier, more natural, and more enjoyable. GIMP? MyPaint? Paint? OneNote? Inkscape? I should pick one and learn it inside and out.

Making and giving presentations. Pay-off: Improved understanding. Helping other people. Connecting with others. Passive networking. Cost: Time. Risk of boring-ness. Obligation. Stress. Change: If I write more, I’ll have more to harvest for presentations. If I ignore the fear of being boring and just get something out there, that will help me deal with the stress of creating something for public use.

Meeting people. This includes meeting new people as well as hanging out with friends. It’s much too easy for me to go into introvert mode and get out to meet people only once in a while. Pay-off: Potentially interesting conversations. Opportunities to help others. Aha! moments myself. Friendships. Cost: conversations that don’t go beyond news, sports, and weather. Change: I should do more of this. Maybe if I focus on remembering how fun it was to hang out with my friends in the Philippines, that will motivate me to build more friendships here too. Simplifying my get-togethers might lead to my actually having regular monthly get-togethers. Setting aside specific blocks of time to be social will also help me work around my introvert tendencies.

Looking at this, I suppose I could scale back on reading, baking/cooking, planning, and reviewing my finances.

I can integrate organizing into my daily routines better.

I can work on remembering or increasing the pay-offs for meeting people and making presentations.

Then I can set aside blocks of time that I can use for drawing, sewing, or making presentations, and another regular block of time for meeting people or investing in relationships.

When summer comes again, gardening can take the place of some walking, and biking will take the place of my subway commute. Woodworking/building furniture is also spending time with W-, so that should be okay.

Thinking about this and writing things down helps me tweak the balance.

How about you? What do you do for fun? What are the costs and pay-offs? What would you like to change?

The Logic of Life: The Rational Economics of an Irrational World
2008 Tim Harford
ISBN 978-0-385-66387-8

2011-01-19 Wed 06:20

Book: Let’s Get Real About Money: Profit from the Habits of the Best Personal Finance Managers

Let’s Get Real About Money: Profit from the Habits of the Best Personal Finance Managers
(c) 2008 Eric Tyson
FT Press, New Jersey
ISBN: 978-0-13-234161-5

My expectations were low. The subtitle “Profit from the Habits of the Best Personal Finance Managers” made me think of celebrity-focused “secrets”-type books with more fluff than content. But hey, it was on the library bookshelf, so I picked it up anyway. I’ve found all sorts of gems in unlikely books, and I’ve skimmed my way through seemingly-solid books that proved to be disappointments. It’s easy to take risks on books when they’re free. ;)

I was pleasantly surprised by what I found. The book has a lot of practical advice on money and relationships, family, raising savvy kids, spending plans, frugality, investment, insurance, and learning more. Well worth a read, and possibly one of my new recommendations in this area.

I’ve been thinking about whether I’ve got the right balance of saving for near-term expenses, investing for the future, and enjoying the present. The book has an entire chapter on this (pp.103 to 112). I particularly like the section on reflecting on whether you’re postponing achievable dreams, and the quote:

It is very well to be thrifty, but don’t amass a hoard of regrets.

  • French poet, Charles D’Orleans (quoted on p.118 of Let’s Get Real About Money)

I’m reminded of Ramit Sethi’s story about how some people set aside money for meeting interesting people. Might be a fun experiment, although perhaps not to that scale. Ditto for learning and experimentation, which I do explicitly save for, and which has paid off quite a bit in terms of interesting life experiences. So I’m not doing too badly in this area, and I’m continuing to learn.

There are useful tips on p131 on keeping saving in proper perspective. Here’s the summary:

  • Understand the standard of living that can be provided by the assets you’ve already accumulated.
  • Get smart about investing your money.
  • Go on a news diet.
  • Regularly buy something that you historically have viewed as frivolous but which you can truly afford.
  • Buy more gifts for the people you love.
  • Go easier on yourself and family when it comes to everyday expenses.

This year’s probably going to be pretty easy to plan for, actually, because we’ve got the two big trips planned (Netherlands and the Philippines), and we might look into improving the insulation of the house. We’re also saving up for other adventures over the next year or two. Big rocks. It’s easy to plan other things around those: perhaps piano lessons, sewing lessons, gardening experiments, and woodworking projects.

Anyway… “Let’s Get Real About Money” is a good read. Try the self-test in front, and check out the chapters on insurance and managing risks. Have fun!

2011-01-13 Thu 21:22

Work on the business from the outside, not in it – Book: Effortless entrepreneur

One of the key points of “Effortless entrepreneur” is that you need to create systems and delegate work so that you can free up time to improve your business.

p38. Work on the business from the outside, not in it. A great
entrepreneur builds systems to run the business as if it were a
machine, and stands over it instead of being part of its inner
workings. A business owner should sell that machine to clients and
perfect its functionality, but not sit in the gear room. How many
times have you seen a local store owner answering phones, doing
paperwork, and assisting customers all at once? This business owner
works IN the business, not ON it, and hasn’t identified the different
positions within his business, such as receptionist, salesperson, and
cashier. Instead, he does all those jobs himself.

Creating manuals and training maps for each position from the get-go
forces you to evaluate what needs to be done and helps identify tasks
you might not think of right away. That can mean fewer unpleasant
surprises down the road. At first, you’ll likely have to work IN your
business and do most, if not all, of the work for each position.
That’s common when you start out. But create a system that allows you
to just work ON it as soon as possible. Once that system is operative,
a business gains its true value.

Work on your business, not just in it. It makes sense, although lots of small-business owners find it hard to make that jump.

How can people practice this now? After all, even if you work for a company, you work for yourself, too.

It’s kinda like what Trent (The Simple Dollar) writes about in “Who is your real boss? Some perspectives on career success”:

My belief is this: the people that succeed are the people who invest that energy and time and patience and thought a little differently.
What do I mean?

  • Option A: Let’s say you go to work each day and leave it all on the
    table. When you leave work, you’re so drained you can barely make it
    home. You sit on the couch, vegetate for a while, eat dinner,
    vegetate a bit more, then hit the sack. Or perhaps you’re a parent
    and you leave work with just enough energy to get through your
    parental requirements in the evening.

  • Option B: On the other hand, let’s say you go to work and
    intentionally keep half of your energy for yourself. You give the
    company 50% of the gas in your tank. After you leave, you spend that
    50% improving yourself. You go to night classes. You go to the gym.
    You go to the library. You go to meetings of professional growth
    groups, like Toastmasters.

Well, maybe not 50%. If you can do your work with 80% effort, and then invest the rest into building skills and processes, then it’s like a savvy entrepreneur investing time into building systems, not just fighting fires. Sometimes it’s more like a full-energy work and 20% extra, but I enjoy the work and the learning along the way.

At work, I’m learning about the way we work on projects: the processes, the templates, the questions and conversations. I like making systems, processes, and tools, so I’m learning how to improve things.

I’m working on applying this idea of “working on the business, not just in it” in personal life as well. Hence the household optimizations: batch cooking and a chest freezer, tweaked routines, relationship-building. Capacity-building for future adventures.

I’m looking forward to do even better. At work, I want to to learn more about Drupal 7, consulting, and the processes we have. I’m also looking forward to writing up more notes and coaching others. In the rest of life, I’d like to experiment with delegating again, invest time into becoming a better writer, and continue building wonderful relationships.

How about you? How can you not only work in your business, but on it?

Effortless entrepreneur: Work smart, play hard, make millions
2010 Nick Friedman and Omar Soliman
Three Rivers Press
ISBN 978-0-307-58799-2

Book: Effortless entrepreneur 2011-01-10 Mon 19:27

Marking up books

I’ve been rereading Adler and van Doren’s “How to Read a Book”. I always get tripped up by the advice to mark up one’s books (p48-51). I’ve experimented with this on and off – wild sallies into the world of underlined passages and marks in the margins of books that I own — but I always recoil, returning to furtively dog-eared pages (and even this, when done to library books, earns me a teasing frown from W-). But Adler and van Doren spend two and a half pages arguing for the value of writing in one’s books and giving tips on how to do it effectively. Their reasons:

  • It keeps you awake and concentrating.
  • It makes your reading active.
  • It helps you remember the thoughts of the author.

Maybe I can get the same benefits by writing my thoughts down elsewhere, but not on the printed pages. Ratchet up my book-blogging, perhaps, as a life-long project to build a personal, digital syntopicon?

W- has started a fresh new professional notebook for 2011. In this, notebook he writes down ideas and lessons from his work and from the books he reads. He’s been taking notes on another book I’ve browsed and dogeared – Visual Meetings.

I sporadically keep paper notebooks. They can be much more convenient than typing on a laptop, especially when one is propping a book open to the right page. Perhaps the tablet will make it easier to keep my handwritten notes?

What would my ideal book notes system be like? Decades later, I’d like to be able to say – ah, if you’re interested in that, here are the books I’ve read about it, and this is how they’re connected to each other, and the arguments they made, and how my personal experiences have supported or contradicted them, and what I’ve done with what I learned from those books, and what else I could add…

Margin notes can’t contain these, but maybe I’ll figure out my own system over time – searchable, hyperlinked, backed-up, personal, and social. In the meantime, I keep my notes in an Org text file, organized in an outline, tagged with keywords, and (occasionally) published on my blog.

What’s your system for book notes?

How to Read a Book
Mortimer J. Adler and Charles Van Doren