You’ve Been Herded: Break the Cycle

break the cycle

Break the Cycle of Relativity

Hello folks! How are you this fine day? All is well here. Today I wanted to extend the conversation from my recent post on my lavish retirement number. While it was a helpful hypothetical quandary to consider as it did put a range on my retirement number, I think it is sage advice to not let your mind wonder too far down the rabbit hole of a lavish retirement. At some point we must say enough is enough. At some point we must break the cycle of relativity.

Whether you extend your career one more year (“OMY”) or three more years is completely up to you. It is hard to determine when enough is enough. And being a naturally conservative person myself, I can understand the draw to pad the retirement accounts. I still have a few years before I get to that point though so who knows what I’ll end up doing…

Toyota or Ferrari?

Putting that aside for a moment though, let’s talk about breaking the cycle of relativity. We all must do it at some point or we’ll end up working until we no longer can. What am I talking about exactly?

I love the Nissan Pathfinder I bought two years ago, but the Infiniti QX60 is even nicer. If I’m considering an upgrade to the Infiniti QX60 though, why not just go for the Tesla Model X. Nothing compares to those falcon wing doors!

My baseline retirement number is $3 million, but if I just work a few more years I could have a lavish retirement with $4.5 million. Can I have a lavish retirement though if I don’t have a second home in Marin County (north of San Francisco and one of the wealthiest communities in America)?

You see where I’m going…

It is an endless mind trap.

Predictably Irrational

Dan Ariely described the phenomena marvelously in his must read book titled Predictably Irrational. It is an oldy but goody (is a 2008 book old now…?). The book was a New York Times Bestseller and highly regarded for its analysis on behavioral economics.

He too mentions how we must break the cycle of relativity. We will always want the nicer car, then the next car must be even nicer, and on and on.

That is where I would relate it to the question of how much would it take to retire comfortably and how much more would it take to make retirement lavish? Well as soon as retirement is considered lavish, there is always something else out there on the horizon that could make retirement even better! It’s a never ending race.

Where do we draw the line? Should we ever look beyond what we need for a comfortable retirement? Is it even worth the exercise of determining what a lavish retirement would look like? What good is a BHAG (big hairy audacious goal) for retirement?

Consider Yourself “Herded”

You shot for the lavish lifestyle and now you’ve just been “herded”!! This is how it all begins. One day you walked by a Starbucks and got sucked in. Was it the ambiance? Was it the smells? Did ordering a “tall” make you feel good? Or was it the delicious bakery filled with fun words to say like scone, croissant, and coffee cake? Either way it worked and you walked in and had breakfast with coffee.

The next day the decision to walk into Starbucks is easier now with the relative experience of the day before. Now the choice is whether to get a “tall” coffee or try a carmel macchiato (another kick-ass word…). You just dropped $5 on a coffee drink, my friend. And if you get the vente carmel macchiato with almond milk and an extra espresso shot you are looking at $7…as I recently found out…** You’ve been herded without even knowing it.

The only way to break away from the herd is to ask yourself these questions, not just on coffee, but on everything…yes, everything:

  1. How did getting herded begin?
  2. Are you getting the amount of satisfaction you’d expect?
  3. Could you cut back a little and spend the money better elsewhere? Don’t ask what blend of coffee you should have today, but whether you should have it at all or resort to the free stuff at work.

The power of one decision can percolate for years to come. That’s behavioral economics. It’s not rational choice theory, Mr. Ariely explains that it goes well beyond that. I’m guessing at this point you are realizing that it is time to read Predictably Irrational. Yes, it is time. Do it for yourself, do it for your lifestyle, and do it for your retirement.

Interested in hearing more I’d pick up a copy (or visit the library for free like myself).

Learn more about how the mind works and influences our decisions. Save yourself from the lavish retirement talk (break the cycle of relativity) and preserve your retirement capital (don’t get herded)!

And with that I wish you a Happy Thanksgiving!  (Is it a coincidence this post landed on Thanksgiving week…?)

Thanks for taking a look!

The Green Swan

 

** You know me…you know I wouldn’t drop $7 on coffee. After all, I’ve already found my coffee revelation. But it was my birthday a month ago and I took full advantage of the Starbucks free drink on your birthday offer!! The dang drink rung up at $7 before applying the free coupon and I was just blown away! But it was a lovely drink…until next birthday vente carmel macchiato with almond milk and an extra espresso shot…until next birthday… 🙂

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6 Comments

  1. I’m definitely going to hit up the library and check out this book. Funny enough, my wife and I were just making a Christmas list to send to my parents and I had a few books on my list. She asked me why I don’t use the library and check out the books instead of asking for the books as presents… I had to laugh out loud at myself because I am trying to be more frugal, and here I am missing out on an excellent opportunity to save money…

    We also are going through the car buying experience… As an engineer, I tend to get way too analytical and I wasted hours doing research on everything from a Hyundai Sonata to a Q60 and other nice SUVs… Ultimately, I settled on a Toyota Highlander for the quality, reliability and safety features it has.

    1. Perfect! I use the Overdrive app quite frequently when an audio book is available through the library. It is fairly easy to use, but unfortunately the audio book selection isn’t huge.

      We went through a similar research experience, even checking out the luxury SUVs. While there wasn’t as huge of a price difference as I would have expected, it just wasn’t worth it still. I kept asking myself why spend that extra money…

      And funny enough we came down to the Highlander and the Pathfinder. Both great cars. The ultimate decision point for us was the third row seat.

  2. I wasn’t familiar with Dan Ariely and Predictably Irrational. It’s on my reading list now. When is enough, enough? Can man’s powerful ego ever be subdued? Fascinating questions, my friend. I guess posts like this and books like Mr. Ariely’s are the only way we can inoculate ourselves from our flawed DNA. Thank you, sir.

    1. Right on, Mr Groovy! Our at least they provide a window into how the mind works to help sidestep some landmines. Its all about ultimate life satisfaction though which certainly is complicated.

      Thanks for stopping by!

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