Marketplace - American Public Media

Cord cutter, or committed to cable? How you watch what you watch

Thu, 2015-03-26 15:43

When Marketplace conducted a poll about your entertainment consumption habits, we learned that while some of you are still paying for deluxe cable packages, many others have found creative solutions to cut down costs — some to as low as $7 a month (by getting internet services for free). 

Here are how Marketplace listeners are getting their entertainment, how much it’s costing them, and why some of them decided to cut the cord on cable:

The plant business trying to sprout again

Thu, 2015-03-26 14:47

It’s estimated that since 2008, around a third of all plant nurseries in the U.S. went out of business.   The industry was hit hard by the housing bust, competition from big box stores, and some bad winters, to top it all off.  But the plant industry’s roots run too deep for it to disappear, and many nurseries are looking for niches to survive their economic winter: sell online, sell interesting, sell weird.

That's the strategy growing in the immense, hot, and humid greenhouses owned by Gardens Alive 20 minutes outside of Dayton, Ohio. 

Felix Cooper, vice president of Gardens Alive, stands in front of a black raspberry - "the first black raspberry to ever have two crops, a fall bearer and a spring bearer,” he says.  The company owns several plant nurseries, seed companies, and offers environmentally friendly garden products. “Right across there we have one of our new grapes. It has this continuously fruiting trait. It’s the coolest thing we’ve seen in a long time.”

The grape plant is so popular that last year, it sold out in January before the company even started shipping.  

Such novel varieties are critical to the business, says Gardens Alive founder Niles Kinerk . “There’s no question in my mind that the future in our industry has to rely on providing to particular niche markets - that the big boxes don’t view as big enough to justify their interests."

Big box stores are the biggest source of competition for plant nurseries, and between them and the recession, the plant nursery business has gotten nailed. Nationwide it’s lost a third of its growers. 

Tony Avent runs Plant Delights Nursery in North Carolina, where half of the nursery industry was wiped out during and after the recession.  He has taken the whole sell-interesting, sell-weird strategy to the next level.

“There’s an Amorphophallus titanum,” he says, pointing to a photo of the currently dormant giant bulb.  “It’s a plant with a flower that’s seven to nine feet tall.  It has a smell that resembles, say, running over a pack of animals in the road - and the smell that would occur several weeks later.”   

Yes, people want to buy it.

Greg Matusky is not one of them. But he is the kind of adamant gardener that Plant Delights and Gardens Alive caters to.   

“Every year I try something I consider exotic, something different. I have an olive plant, this year I’m going to grow capers,” he says, noting that he didn’t get them from a big box store. 

“If you can find four or five varieties of tomatoes at Home Depot, you’re doing pretty well,” he says.  Matusky grows hundreds of tomato plants a year in his garden outside of Philadelphia.  “The selection is much greater if you go online.”

Avent says the decline of the nursery industry and the rise of the garden department has had a fundamental impact on the plants themselves.

“Everything has shifted to plants that have a fast production time, plants which are what’s called a ‘seven-racker’ – breed them short enough so they can fit on a seven-racker truck,” he says.  “It doesn’t really matter anymore to a lot of plant breeders how it will perform in the garden.”

Avent says some growers will spray  hormones on plants to keep them compact and attractive on shelves, but not particularly verdant in the garden.

While there are, in fact, many new plant varieties available than ever before, obtaining them can be a challenge, which is where some nurseries see an advantage. 

There are a few other things in the nurseries’ favor.  One is the simple fact that so many of them have gone out of business, which means there’s less competition for the ones still around.  There are now shortages of some plants that take a while to grow, like landscape trees.  Most growers didn’t plant many of them five years ago when things were bad, so there aren’t enough ready now.  That’s great for businesses in that niche.

“There are actually people who go out and scout landscapes. They will  go out to properties and proposition the owners, saying we will pay you $50,000 for this tree if you allow us to dig it and move it to a property because of the shortage in the industry,” says Avent.  It’s a story confirmed by real estate agents in the Northeast. 

But the main thing the plant nurseries are banking on is gardeners like Matusky, gardeners with a discerning green thumb and a penchant for growing their own food. 

“Tomatoes are one thing that really blow your brains out when you taste them and realize what a real tomato tastes like,” Matusky says. “Cucumbers, the same thing. Eggplant less bitter than you’ll ever taste from the supermarket.”

From new varieties to online merchandising, nurseries are doing everything they can to stick around, supplying gardeners who want fresh pea plants, and those who want plants that smell like pee.  If the strategy is right, it may, after a seven year winter, finally be spring for the plant nursery industry.  

FanDuel: Where fantasy draft day is everyday

Thu, 2015-03-26 11:18

What if you could combine sports with instant gratification and make some money, while you're at it – all while never having to leave the comfort of your own home.

Generally speaking, you can't bet on sports online in this country. But what you can do is pick your favorite players and set up a fantasy team, where your win-loss record is based on how those players do in real life, not their teams, and make some money that way.

"It’s a game of skill, so you compete with other people in drafting teams," says Nigel Eccles, co-founder and CEO of FanDuel.

Well, 41 million people in the U.S and Canada are doing just that. Fantasy sports has become a different kind of national past time.

However, FanDuel is not your ordinary fantasy sports site. Most fantasy sports leagues can drag on for six-months and require a lot of commitment. And if a user drafts lousy players onto their team, the joy and interest in playing is usually gone by week four or five.

FanDuel is like the fantasy sports site for the non-committed. Users can play for one day or a weekend, whenever they’d like. In the fourth quarter of last year, FanDuel had over one million paying users. 

"The game is great like that because some people love sports, they love basketball, but they are never going to be committed enough to play a seasonal fantasy basketball league. And with this you’re just committing to one evening," Eccles says. 

 

Live-streaming comes to the smartphone era

Thu, 2015-03-26 11:14

Twitter wants us to spend more time live-streaming our lives. Their new broadcasting app Periscope went live today.

Acquired by Twitter for $100 million in January, the app allows users to live stream video from their smart phones (iOS only, for now). Interested viewers who don't catch the stream live can replay it later.

That follows what may prove to be the flash-in-the-pan success of Meerkat, which does the same thing but isn't owned by Twitter, a possibly insurmountable obstacle. Plus, Meerkat more closely resembles Snapchat: Once the stream is offline, it's gone, not to be viewed again. 

The concept of the live stream isn't new, says Marketplace Tech host Ben Johnson. Sites like Ustream have been a mainstay of conferences, lectures and festivals for years. But this crop of new apps make it incredibly easy to turn a smartphone into a live broadcast device. One consequence is the increased ability to share moments of idleness or boredom. 

Another app, YouNow, is a streaming and chat service that boasts, among other things, a hashtag called #SleepSquad. Yes, watching people as they sleep. And there's a tip system, too, so conceivably, paying to watch people sleep. 

"It's curious and creepy," Johnson says. "This is the weird, Wild West days of live streaming on your mobile phone and being able to interact with people. Which is cool — but where's the money?"

Beyond the tips passed around YouNow, Twitter's Periscope and Meerkat will eventually seek ways to monetize. The site to watch for clues is Twitch, the video game streaming platform that Amazon acquired for $1.1 billion in 2014. There, gamers can broadcast and watch others. Banter, consistency, level of play, and yes, even production values, boost viewership here. Twitch's top broadcasters gain significant followings, and in some cases advertising and fans' financial support. 

"Here's a number: 20 million. That's the number of viewers who watched the live stream of a video game in the first week it was released on Twitch, last year," Johnson says, adding that YouTube is reportedly developing its own video game streaming service. 

These companies are betting that the growth in interest and viewership around live streaming will draw more advertisers as well. But while live streams can be intimate and personal, they are also unpredictable.

One potential consequence: a resurgence in swatting, where viewers contact 911 with a false gun or bomb threat, to direct SWAT teams to that player's house. 

"For a hacker, they want to be able to play this prank on someone and have — in some cases — 55,000 people watching this guy get thrown on the ground by police," Johnson said. 

No advertiser wants their banner ad plastered over a gamer in handcuffs, and so may stay away from potentially lucrative but chaotic streaming channels. In an interview with Twitch CEO Emmett Shear, Johnson asked whether the company plans to add additional controls.

"The key thing for us is cooperating with law enforcement," Shear said, adding, "Secondly, you know, honestly, not talking about it too much, because I think that there's a negative impact from giving too much attention to people who are honestly seeking attention by doing this."

Not talking about how this content may be moderated or controlled isn't a solution. So while there's growth and interest in live streaming, as well as money to be made, there are potential downsides — and etiquette — to be worked out. 

Coach Dean Smith calls one last play before passing away

Thu, 2015-03-26 10:24

Dean Smith, the legendary basketball coach for the University of North Carolina Tar Heels, died in early February.

Turns out that in his will, Smith specified that every player who earned a varsity letter while he was there was to get a check for $200 along with a note encouraging them to a dinner out.

Compliments of Coach Dean Smith.

Challenges remain, even after the 'Doc Fix' gets fixed

Thu, 2015-03-26 09:05

Kicking the can down the road is old hat in Washington. But one of the cans that's been kicked for nearly 20 years now has been, well, not kicked.

The House of Representatives, by a wide and bipartisan margin, voted for a more permanent solution to the perennial threats to how much Medicare reimburses doctors, the so-called "Doc Fix" legislation. And while the deal still needs to win Senate approval, to some, like American Medical Association President-elect Dr. Steven Stack, it’s a historic moment.

“I don’t want to pass the opportunity to thank Speaker Boehner and Leader Pelosi," Stack says.

Now, Stack knows there’s almost no chance that kind of quote is ever published, but he wanted to say it anyway. Take it as a sign of the relief he’s cautiously feeling on behalf of the 94 percent of doctors who have worried about Congress cutting their pay.

“Having stability and predictability in physician payment is essential for quality of care and patient safety,” he says.

Under the bill, doctors would see a half percent bump in each of the next four years, well below the rate of inflation — the price they pay for predictability. There’s another price doctors may pay though, warns the Urban Institute’s Bob Berenson, namely more reporting requirements. Berenson says some lack the technology infrastructure to pull it off.

“Small practices will find this too much of a reporting burden and may just throw in the towel,” he says.

Another key provision would pay doctors more for high-quality care rather than the volume of care. Everybody loves that, says Harvard’s Dr. Ashish Jha. The trouble is it’s very hard to measure "quality."

“We are going to focus on paying doctors for a lot of things. Some of which probably represent real quality and some of which clearly represent checking the box,” he says.

Jha says if Washington is serious about paying based on quality, the government must invest several billion dollars. Absent that, doctors may have more financial stability thanks to this deal, but less certainty about how to best serve their patients.

Why borrowers turn to pricey payday loans

Thu, 2015-03-26 09:05

The Consumer Finance Protection Bureau is looking to make payday and other short-term loans more consumer-friendly. For example, it's considering creating rules that would require lenders to consider a borrower's ability to repay the loan and/or limit the number of loans borrowers can take out.

But even without such controls, borrowers keep turning to these services — 12 million borrowers each year, according to the Pew Charitable Trusts. A typical payday borrower might make $30,000 a year and borrow a few hundred dollars to pay their rent or electricity bill.  Borrowers may find themselves with unexpected expenses and no other options, says BankRate.com's Greg McBride, as traditional banks don’t generally make small loans and borrowers may not qualify if they did.

Alternatively, borrowers might decide these loans are the best of limited options, says Dennis Shaul, CEO of the short-term lender trade group Community Financial Services Association of America. Shaul agrees with the CFPB that lenders should evaluate people’s ability to repay loans. Wade Henderson, the president of the Leadership Conference for Civil and Human Rights, says consumers also need other options to meet their borrowing needs. 

When disasters happen, all airlines are affected

Thu, 2015-03-26 09:04

When a plane crashes — it doesn’t matter whose plane it is — the entire airline industry is affected and the entire industry responds. One of the first things airlines do is set to work calming people’s fears.

"So, for example, if a passenger has a question about the type of aircraft being used on his or her flight, call-center employees usually are briefed on how to answer those questions," says Madhu Unnikrishnan, an airline-industry correspondent for Aviation Week. 

Unnikrishnan says other aspects of business as usual are also put on hold.

“They will suspend events, promotional and marketing events for example," she says. "And airlines typically withdraw ads from newspapers and television."

Tragedies bring about cooperation in other areas, says Richard Aboulafia, an airline analysis with the Teal Group.

“I think the most important thing they think about is how to engage with regulatory officials in a positive way,” he says.

In the wake of the Germanwings crash, several carriers, including Norwegian Air and Air Canada have already announced rules changes requiring two pilots to remain in the cockpit at all times. And it’s likely the changes won’t end there. 

"I'd be surprised if their weren't some kind of changes that resulted from this,” says Aboulafia, "because you've got a series a of incidents, that really point to the impact of human malice in the cockpit.”

Eventually, airlines will return to what they do best: compete for business. One thing you will never see them compete on, says Aboulafia, is safety.

That's because most carriers fly the same planes, and they have no interest in raising concerns about a competitors’ pilots or equipment.

Quiz: The gift that keeps on giving

Thu, 2015-03-26 08:51

The percentage of 12-17 year olds in gifted classes rose 6 points between 2000 and 2010, according to the U.S. Census Bureau.

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PODCAST: The relationship of regulating

Thu, 2015-03-26 03:00

Markets react to airstrikes in Yemen, questions over the nature of "regulatory capture," and Kim Gordon talks about her greatest money lesson.

Women get “swatted” too

Thu, 2015-03-26 02:01

Swatting — making prank calls to 911 to send a SWAT team to someone’s home while they are online playing a video game live — has been in the news lately. (Here and here, just to name a few.)

Swatting is enabled by something else called “doxxing” or “dropping dox” - “The act of posting someone's personal and/ or identifying  information without their consent,” says Sarah Jeong, a tech reporter in Silicon Valley. That information could be anything from an address to a Social Security Number.

Swatting or doxxing, Jeong says, is the only way to hurt someone in the virtual world of gamers, where the practice is most common. “It’s assault by proxy,” she says.

The reason swatting has been getting so much attention, she believes, is the “high-profile” cases that happen on camera. That is, when someone is interrupted while playing a video game online and also live streaming themselves playing the video game.

“That’s actually a form of media that young people consume and being able to manipulate that media...imagine if, with a phone call, you could change what’s happening on your television,” says Jeong.

While getting more media attention was a major step in fixing the problem, she adds, she was also concerned that a lot of the coverage focused on men.

“Three people were swatted in January and two of them were women,” she says. “The three that I am thinking of were swatted because they were critics of Gamergate.”

“There is a wave of this kind of behaviour that is specifically focused around trying to drive out feminist voices from the internet,” says Jeong.

The only way, she says, is for the media to cover swatting more without focusing on men’s experiences alone.

“I understand that it’s hard because women don’t really want to talk about how they were doxxed and swatted,” says Jeong. “And now media thinks of swatting and doxxing as something that happens to young men by young men as opposed to it being a larger phenomenon that includes this wave of violence against women.”

 

The health insurance industry looks...well, healthy

Thu, 2015-03-26 02:00

On Thursday, a new report out from the Commonwealth Fund finds the health insurance industry is doing just fine, thank you very much.

That’s contrary to the deep-seated fears of some as the Affordable Care Act launched back in 2010. But with three years’ worth of data on the books now, and insurers’ stock prices soaring, those fears have faded.

From a business standpoint, it’s a particularly impressive feat considering that on the eve of the ACA, some insurers wondered how they’d keep the lights on after the federal government killed its golden goose. Under the law, the ACA bars companies from denying sick people coverage, a source of significant profits. It was a daunting moment says Wake Forest Professor Mark Hall.

“Insurance companies had to figure out how to sail through those shifting currents, and what we’ve seen after these several years is that they’ve sailed through those choppy seas quite well,” he says.

Despite no longer cherry-picking patients, the Commonwealth report shows that industry profits remain nearly identical to before implementation of the ACA. Bloomberg Industries Analyst Brian Rye says Obamacare has been very good for insurers.

“When it becomes a law that you have to do something it’s amazing how much demand improves,” he says.

Of course Rye is talking about the fact that now most adults are required to carry insurance, and the federal government helps people pay for that coverage. That has led to millions of new customers for the insurers who today have a new golden goose.

Balancing collaboration and skepticism in regulation

Thu, 2015-03-26 02:00

In college, they teach a phenomenon called "regulatory capture," where government regulators absorb the values and become buddy-buddy with the industries they regulate. It gets some of the blame for the great financial collapse more than five years ago.

But a prominent Wall Street lawyer H. Rodgin Cohen told a banking law conference in Phoenix the other other day that he doesn't see capture—He sees the opposite, which he thinks is a problem.

Click the media player above to hear H. Rodgin Cohen in conversation with Marketplace Morning Report host David Brancaccio.

Microsoft wants contractors to take some time off

Thu, 2015-03-26 02:00

Microsoft is requiring companies it contracts with to give their employees—the ones who are full-time and who do work for Microsoft—at least 15 days of paid time off.

The tech giant says it made the move because its own employees were bringing up the issue of subcontractors' time off with the company.

"There was a concern being conveyed that these individuals, in some cases, did not get minimum time off," says Brad Smith, Microsoft's general counsel.

The company is now mandating that over the next 12 months, all of its suppliers (or contractors, Smith says the term is interchangeable) with 50 or more employees offer at east 12 paid days off, or 10 vacation days and 5 sick days.

Smith says the company does not yet know how many employees or employers will be affected by the new rule, because Microsoft doesn't know the size of all of its contractors or the employee time-off benefits those contractors currently offer.

But Microsoft says it contracts with approximately 2,000 U.S. companies. They, in turn, employ cafeteria workers, receptionists, language translators, consultants, public relations professionals, lawyers, and others.

"For companies that don't have these benefits today. We're asking them to change some policies that may very well increase some of their costs," says Smith. "We went into this quite consciously aware and prepared for the cost increases that may well come back to us."

Mike Aitken, VP of government affairs at the Society for Human Resource management, says paid time off is a worthwhile investment.

"We know that employers that offer these programs have lower turnover. They have higher engagement from these employees," says Aitken.

An SHRM sponsored study found that almost all employers with 50 or more full-time employees offered some amount of paid time off. But, the report found that only a quarter to a third offered time off to part-time employees. And not all offered a minimum of 15 days paid time off.

All the President's Pens

Thu, 2015-03-26 01:59
22 percent

The portion of companies that presented at Y Combinator Demo Days this week with at least one female founder, FiveThirtyEight reported. The tech incubator's president has been vocal about the need to increase diversity in tech, and Y Combinator's data show the number of women is increasing, albeit very slowly.

We also spoke with one venture capitalist about what it's like to get pitches from over 100 companies in two days.

15 days

That's how many days off Microsoft is requiring companies it contracts to give employees, albeit those who work full-time for Microsoft. It is unclear as of yet how many people will benefit from the mandate, as Microsoft doesn't have information on the current policies of companies it works with.

$150

The list price for a pen similar to the one President Barack Obama uses to sign bills into law. A.T. Cross makes them, and we talked to their CEO about what it's like to be the official pen provider to the White House.

27.6 percent

That's the interest rate on Marketplace Weekend host Lizzie O'Leary's credit card back in 2000. After moving to New York and buying what she thought she needed to truly belong, O'Leary describes learning some hard truths about debt, and how identity can't be found in things. You can read more stories about money lessons learned through our joint project with the New York Times entitled "My Biggest Financial Lesson."

114,000 residents

That's how many residents currently live in The Villages, a senior community outside of Orlando, Florida. As reported by the WSJ, census data shows that The Villages is the country's fastest growing city with a growth of 5.4 percent in the year ending July 2014. It's even more impressive when considering this is the second year the city has held this distinction.

Kai Ryssdal on passing along the financial genes

Wed, 2015-03-25 12:59

When you get right down to it, it’s my dad’s fault. My relationship with money, I mean. It’s not weird or anything like that. It’s just... casual. Like... whether you have it or you don’t, everything’s going to be all right somehow.

There was a story that got told a lot in my house when I was growing up. When they were courting, back in the day — which, to be just a bit more precise, would be 1958 — my mom and dad went out for dinner one night in Manhattan. A pretty nice place, too, the story went. So nice that my mother, even though she was pretty young, knew there was no way my dad could afford it. Sure enough, the bill comes and he can’t pay. From what I gather there was some hemming and hawing, a conversation with the maitre d’ over by the door, and what winds up happening is that my father leaves his watch with the guy, gets my mom home and then comes back the next day to settle up.

That’s nobody’s idea of a sensible way to handle your finances, but let’s just say the apple doesn’t fall far from the tree.

I like money as much as the next person. I like having enough in my pocket to make a small impulse buy if I want. I like being able to make my mortgage payments. I like being able to take care of my family.

What I don’t like is thinking about it. It stresses me out and I’m not good at it — at running a household budget or balancing a checkbook (if anybody does that anymore,) at tracking incomes and outflows or dealing with mutual funds and investments and when to sell and when to buy. That was true when I was young, single and broke, and it’s true now, when I’m not young, not single and not broke.

A word of professional disclosure here: I have no idea what investments my wife and I have. Part of that is because of all the stuff I’ve written here. More to the point, though, I just don’t think it’s right for me to be talking about corporations and markets and economic policy to 11 million people on the radio every week while being fully cognizant of precisely what kind of skin I have in the game, if you know what I mean.

In my house, my wife handles all the money. Every last penny. And I’m totally fine with that.

I’ve never gone into a restaurant knowing or even suspecting I couldn’t pay. I have more sense than my dad in that way, at least, I guess. (More money, too, I suppose.)

But there is one thing he always did for me when I was growing up that that I find myself doing now with my two teenagers. When one them is going out for the evening, I always ask, “Hey, you got a couple of bucks in your pocket?”

Kai Ryssdal on passing along the financial genes

Wed, 2015-03-25 12:59

When you get right down to it, it’s my dad’s fault. My relationship with money, I mean. It’s not weird or anything like that. It’s just... casual. Like... whether you have it or you don’t, everything’s going to be all right somehow.

There was a story that got told a lot in my house when I was growing up. When they were courting, back in the day — which, to be just a bit more precise, would be 1958 — my mom and dad went out for dinner one night in Manhattan. A pretty nice place, too, the story went. So nice that my mother, even though she was pretty young, knew there was no way my dad could afford it. Sure enough, the bill comes and he can’t pay. From what I gather there was some hemming and hawing, a conversation with the maitre d’ over by the door, and what winds up happening is that my father leaves his watch with the guy, gets my mom home and then comes back the next day to settle up.

That’s nobody’s idea of a sensible way to handle your finances, but let’s just say the apple doesn’t fall far from the tree.

I like money as much as the next person. I like having enough in my pocket to make a small impulse buy if I want. I like being able to make my mortgage payments. I like being able to take care of my family.

What I don’t like is thinking about it. It stresses me out and I’m not good at it — at running a household budget or balancing a checkbook (if anybody does that anymore,) at tracking incomes and outflows or dealing with mutual funds and investments and when to sell and when to buy. That was true when I was young, single and broke, and it’s true now, when I’m not young, not single and not broke.

A word of professional disclosure here: I have no idea what investments my wife and I have. Part of that is because of all the stuff I’ve written here. More to the point, though, I just don’t think it’s right for me to be talking about corporations and markets and economic policy to 11 million people on the radio every week while being fully cognizant of precisely what kind of skin I have in the game, if you know what I mean.

In my house, my wife handles all the money. Every last penny. And I’m totally fine with that.

I’ve never gone into a restaurant knowing or even suspecting I couldn’t pay. I have more sense than my dad in that way, at least, I guess. (More money, too, I suppose.)

But there is one thing he always did for me when I was growing up that that I find myself doing now with my two teenagers. When one them is going out for the evening, I always ask, “Hey, you got a couple of bucks in your pocket?”

David Brancaccio wants you to consult your future self

Wed, 2015-03-25 12:57

Eureka moments are supposed to happen in unlikely locations, like the one Archimedes had in his bath. But my revelation about planning and money came in a terribly likely spot, a centuries-old ceremonial hall at Oxford University.

The sociologist Anthony Giddens was at a conference there talking not of personal finance, but about the challenge of shifting the politics of climate change. One reason it is so difficult, he suggested, is that while people see the present in crisp high-definition, the future is blurry. He mentioned teenagers taking a first cigarette to impress friends who are in sharp focus now, and ignoring the diaphanous image of their 60-year-old selves with emphysema.

Behavioral economists have a term for this phenomenon, they call it hyperbolic discounting. Our myopia sets in quickly, hence the “hyperbolic” part. We are vague about the future even a few months from now. There is even a test, economists make people an offer: $100 now or $120 at this time next year. Most people pick immediate gratification, even though the smart choice is more money later. After all, what other investment is going to yield a guaranteed 20 percent return?

Like a lot of us, I have a continuing fight against hyperbolic discounting in regard to my own finances. If only there were a strategy to warp space-time so that the future does not seem so out-of-focus.

In search of some kind of pill or corrective lens, I called a man who studies these things, Joseph Kable, a neuroscientist and assistant professor in the department of psychology at the University of Pennsylvania.

“I think we are all looking for a cure,” Professor Kable joked.

Discounting, he told me, affects decisions about our health, government policy choices about budgets, and, yes, personal finances.

If there is no cure, some exercises may help. Professor Kable said even brief reveries pondering future events might help reduce discounting’s effects.

One exercise I like is not my invention, but seems right out of Charles Dickens. Before making a big financial decision, why not try interviewing one’s future self? After all, the Ghost of David Brancaccio's Future has skin in the game, and that ghost deserves to have his say.

It is this future self who might judge that it is right to spend a fortune on college because my children will end up with more fulfilling lives. Yet, my future self might warn me from 2045 that he is stuck eating cat food because of that golden $17,000 Apple Watch I really had to have in 2015.

But since I cannot actually interview my future self, perhaps I could speak to a surrogate. Recently, I visited the man I would like to be decades from now. Herbert R. Mayer, 93, is a gifted entrepreneur with a way with money that took him from humble origins near the Dodgers’ old Ebbets Field in Brooklyn to a comfortable life in Southern California. I like to think he was Amazon decades before Amazon. Instead of the Internet, he used catalogs and snail mail to sell custom paper products directly to hospitals.

I interrogated my future self, I mean Herb, about several practical choices. I haven’t been saving enough for retirement because of those aforementioned college tuitions. This year, I might be able to kick in $10,000 to a 401(k), but I could raise the contribution to $16,000 if I canceled a much-needed family vacation that we’re planning in Spain.

Herb’s answer was swift. Cut the cost of the vacation in half and put the cash saved toward retirement. “You can do it both ways,” he said. I figure that might be easier if we un-invite our three young-adult children or switch to a vacation that does not involve airfare, such as a drive to a cabin in my home state, Maine.

Next choice: Interest rates are low, and I can get a home-equity loan to fix up a Nixon-era kitchen. If we don’t get too crazy, that could cost $50,000 in my part of New Jersey. Herb blanched at an estimate that high. His prescription: Do inexpensive improvements now with the money at hand. I should find a way to make more and use that to pay for further upgrades. Herb believes in my future earnings potential, yet does not want me to borrow.

“No, it’s ridiculous,” Herb said. “Never liked borrowing.” Why is that? “I just think it’s a tough way to make a buck.” This from a man who knows how to make a buck. If Herb represents my future self at all accurately, that future self is a tough customer. During that visit, he also pointedly showed off his newly refurbished refrigerator. Refurbished? Who knew?

For those without access to a wise nonagenarian, there is technology. The investment company Merrill Edge has an app that is supposed to mute hyperbolic discounting. It invites you to upload an image of your face that is then electronically “aged” to project what you might look like in future decades.

The results in my case were less instructive than dispiriting: Imagine a waxwork effigy left to melt overnight on a radiator. If that is what I’m going to look like in several decades, I had better start saving for a plastic surgeon, too.

David Brancaccio wants you to consult your future self

Wed, 2015-03-25 12:57

Eureka moments are supposed to happen in unlikely locations, like the one Archimedes had in his bath. But my revelation about planning and money came in a terribly likely spot, a centuries-old ceremonial hall at Oxford University.

The sociologist Anthony Giddens was at a conference there talking not of personal finance, but about the challenge of shifting the politics of climate change. One reason it is so difficult, he suggested, is that while people see the present in crisp high-definition, the future is blurry. He mentioned teenagers taking a first cigarette to impress friends who are in sharp focus now, and ignoring the diaphanous image of their 60-year-old selves with emphysema.

Behavioral economists have a term for this phenomenon, they call it hyperbolic discounting. Our myopia sets in quickly, hence the “hyperbolic” part. We are vague about the future even a few months from now. There is even a test, economists make people an offer: $100 now or $120 at this time next year. Most people pick immediate gratification, even though the smart choice is more money later. After all, what other investment is going to yield a guaranteed 20 percent return?

Like a lot of us, I have a continuing fight against hyperbolic discounting in regard to my own finances. If only there were a strategy to warp space-time so that the future does not seem so out-of-focus.

In search of some kind of pill or corrective lens, I called a man who studies these things, Joseph Kable, a neuroscientist and assistant professor in the department of psychology at the University of Pennsylvania.

“I think we are all looking for a cure,” Professor Kable joked.

Discounting, he told me, affects decisions about our health, government policy choices about budgets, and, yes, personal finances.

If there is no cure, some exercises may help. Professor Kable said even brief reveries pondering future events might help reduce discounting’s effects.

One exercise I like is not my invention, but seems right out of Charles Dickens. Before making a big financial decision, why not try interviewing one’s future self? After all, the Ghost of David Brancaccio's Future has skin in the game, and that ghost deserves to have his say.

It is this future self who might judge that it is right to spend a fortune on college because my children will end up with more fulfilling lives. Yet, my future self might warn me from 2045 that he is stuck eating cat food because of that golden $17,000 Apple Watch I really had to have in 2015.

But since I cannot actually interview my future self, perhaps I could speak to a surrogate. Recently, I visited the man I would like to be decades from now. Herbert R. Mayer, 93, is a gifted entrepreneur with a way with money that took him from humble origins near the Dodgers’ old Ebbets Field in Brooklyn to a comfortable life in Southern California. I like to think he was Amazon decades before Amazon. Instead of the Internet, he used catalogs and snail mail to sell custom paper products directly to hospitals.

I interrogated my future self, I mean Herb, about several practical choices. I haven’t been saving enough for retirement because of those aforementioned college tuitions. This year, I might be able to kick in $10,000 to a 401(k), but I could raise the contribution to $16,000 if I canceled a much-needed family vacation that we’re planning in Spain.

Herb’s answer was swift. Cut the cost of the vacation in half and put the cash saved toward retirement. “You can do it both ways,” he said. I figure that might be easier if we un-invite our three young-adult children or switch to a vacation that does not involve airfare, such as a drive to a cabin in my home state, Maine.

Next choice: Interest rates are low, and I can get a home-equity loan to fix up a Nixon-era kitchen. If we don’t get too crazy, that could cost $50,000 in my part of New Jersey. Herb blanched at an estimate that high. His prescription: Do inexpensive improvements now with the money at hand. I should find a way to make more and use that to pay for further upgrades. Herb believes in my future earnings potential, yet does not want me to borrow.

“No, it’s ridiculous,” Herb said. “Never liked borrowing.” Why is that? “I just think it’s a tough way to make a buck.” This from a man who knows how to make a buck. If Herb represents my future self at all accurately, that future self is a tough customer. During that visit, he also pointedly showed off his newly refurbished refrigerator. Refurbished? Who knew?

For those without access to a wise nonagenarian, there is technology. The investment company Merrill Edge has an app that is supposed to mute hyperbolic discounting. It invites you to upload an image of your face that is then electronically “aged” to project what you might look like in future decades.

The results in my case were less instructive than dispiriting: Imagine a waxwork effigy left to melt overnight on a radiator. If that is what I’m going to look like in several decades, I had better start saving for a plastic surgeon, too.

Lizzie O'Leary learns a lesson in debt and confidence

Wed, 2015-03-25 12:55

The interest rate made my stomach drop: 27.6 percent.

I stared at it, trying to understand how that was even possible. I’d signed something else, hadn’t I? A lower rate, I must have. It was 2000, I was 24, making less than $30,000 a year, and the American Airlines Citibank Card was the first I’d ever had. It was shiny and silver, with the old airline logo at the top. Get miles! Live like other people in New York! Welcome, kid.

Foreshadowing what was to come, I couldn’t remember the credit limit, only what I bought.

A gold, strapless Nicole Miller dress for a glamorous friend’s sister’s wedding. Gold sandals. A filmy wrap for around my shoulders. A Meg Ryan “You’ve Got Mail” haircut. Altogether, it cost maybe $1,000. Outside the careful budget my stepfather helped me draft (and I promptly ignored).

Instead, I got a lesson in debt, confidence and identity that still lives somewhere in that startled gut.

I grew up privileged. Sidwell Friends, a private Quaker school in Washington. Williams College in Massachusetts; my family paid for it. Financially, I was spoiled, because I knew next to nothing about money. I didn’t have to. I had the kind of parents who allowed me to focus on academics and curiosity.

Moving to New York, I took a job as a desk assistant at ABC News. I answered phones, arranged newspapers for senior executives and changed into running shoes in the afternoons to sprint script pages up and down the hall to Peter Jennings.

And I was surrounded by wealth I’d never seen before. Women my age who wore Manolo Blahnik shoes. Carried designer handbags. Were whisked past lines into clubs I fantasized about. Feeling desperately uncool, I moved into a pint-size studio apartment in the East Village (again, too much money) from an Upper East Side studio. The remaining squatters next door shouted “Die yuppie scum!” in the mornings.

I was naïve, unhappy and lost. All I wanted was to fit in.

I put things on the card. And more. And more. So full of self-doubt, so unsure of who I was (Could I someday be a reporter? Would that guy from MTV ever call me back? Maybe a leather jacket would help?), that spending became an outlet for my insecurity. Anything to seem less scared, less wrong.

Until the day of 27.6 percent. I’d hit my credit limit. I got the penalty interest rate. I missed payments. And lots of letters with big red type. The debt ballooned to close to $10,000.
I blew up my measly credit score. Citibank, rightly, had no sympathy for a privileged kid who’d gotten herself into trouble. Frankly, I don’t have any now.

I didn’t even have the nobility to work all the debt off. I paid off half of it with savings that I swore I would never touch until I was 30, and the rest by rationing my income over time. And I canceled the card.

It still followed me for years. On my credit reports. Apartment rentals. The loans I took out for grad school.

The experience lingers on in the understanding that “retail therapy,” shopping to make yourself feel better, is a farce. And nobody, certainly nobody I’d want to befriend in my adult life, finds identity through things.

The loneliness that comes with being young and unsure of yourself is actually a great teacher — one that material things can never match.

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