Lone Gunman

By donat­ing funds to disaster-specific char­i­ta­ble organ­i­sa­tions and cam­paigns we restrict the use of our funds to the relief of that prob­lem only. This can cause long-lasting issues for char­i­ties and world­wide dis­as­ter recov­ery efforts in the future.

To ensure the char­i­ta­ble help best, the char­i­ta­ble should ensure they give unre­stricted funds that are not ear­marked for spe­cific dis­as­ters.

[Médecins Sans Fron­tières] has already received enough money over the past three days to keep its Haiti mis­sion run­ning for the best part of the next decade. MSF is behav­ing as eth­i­cally as it can, and has deter­mined that the vast major­ity of the spike in dona­tions that it’s received in the past few days was intended to be spent in Haiti. It will there­fore ear­mark that money for Haiti, and try to spend it there over the com­ing years, even as other mis­sions, else­where in the world, are still in des­per­ate need of resources. […]

The last time there was a dis­as­ter on this scale was the Asian tsunami, five years ago. And for all its best efforts, the Red Cross has still only spent 83% of its $3.21 bil­lion tsunami bud­get — which means that it has over half a bil­lion dol­lars left to spend. Not to put too fine a point on it, but that’s money which could be spent in Haiti, if it weren’t for the fact that it was earmarked. […]

If a char­ity is worth sup­port­ing, then it’s worth sup­port­ing with unre­stricted funds. Because the last thing any­body wants to see in a cou­ple of years’ time is an unseemly tus­sle over what hap­pened to today’s Haiti dona­tions, even as other inter­na­tional tragedies receive much less pub­lic attention.

After dis­cussing con­sumer sig­nalling and Geof­frey Miller’s Spent in his Find­ings col­umn (men­tioned pre­vi­ously), read­ers of John Tierney’s Lab were asked,

List the ten most expen­sive things (prod­ucts, ser­vices or expe­ri­ences) that you have ever paid for (includ­ing houses, cars, uni­ver­sity degrees, mar­riage cer­e­monies, divorce set­tle­ments and taxes). Then, list the ten items that you have ever bought that gave you the most hap­pi­ness. Count how many items appear on both lists.

Dis­miss­ing for a moment the self-selection of the par­tic­i­pants and the small sam­ple size, the responses to the ques­tion are quite intrigu­ing, show­ing you what con­sumer items are worth their cost in terms of ‘hap­pi­ness’, and what items aren’t.

• Expen­sive items that don’t sig­nif­i­cantly con­tribute to hap­pi­ness: mar­riage cer­e­monies, most cars, boats.
• Inex­pen­sive items that do sig­nif­i­cantly con­tribute to hap­pi­ness: meals with friends, alco­hol, books, music, qual­ity beds, pets, bicycles.
• Items that are both (expen­sive and con­trib­u­tory to over­all hap­pi­ness): edu­ca­tion, hous­ing, for­eign travel, elec­tron­ics and sports cars.

Dr Miller’s analy­sis of the experiment’s trends is worth read­ing, as is this pre­vi­ous post on the link between money and hap­pi­ness.

In 2007 the aver­age Amer­i­can saved 0.6% of their income. By Feb­ru­ary of this year that had risen to more than 4%, but in the 1980s it was 10%.

With this in mind, Tim Har­ford asks why are we such awful savers, and what can we do to improve the situation?

Behav­ioral econ­o­mists […] have uncov­ered three rea­sons why peo­ple find it so dif­fi­cult to save. The first is temp­ta­tion: Although we often later regret it, we just can’t resist spend­ing. The sec­ond is lack of under­stand­ing: Our brains can’t quite grasp the prof­itabil­ity of sav­ing. The third is opti­mism: We believe that every­thing will work out, even if we don’t save.

The solu­tion offered to counter temp­ta­tion sounds very sim­i­lar to the behav­iour Ramit encour­ages in his read­ers:

[Researchers at UCL] found that imag­in­ing a future pur­chase is almost as good as get­ting it. For exam­ple, when we day­dream about buy­ing a new car, our brains respond in much the same way as when we actu­ally make the purchase.

We can har­ness this buzz to our ben­e­fit by dis­card­ing vague ideas of “sav­ing for a rainy day” and focus­ing instead on par­tic­u­lar items we need or want. […] Rein­force this con­nec­tion in your mind by open­ing a dif­fer­ent sav­ings account devoted to each of your goals: one for a new car, one for a vaca­tion, one for a child’s col­lege tuition fees.

Bruce Schneier com­ments on the grow­ing preva­lence of low-tech cur­rency coun­ter­feit­ing: “Coun­ter­feits are becom­ing eas­ier to detect while peo­ple are becom­ing less skilled in detect­ing it”.

Part of the prob­lem, Green said, is that the gov­ern­ment has changed the money so much to foil coun­ter­feit­ing. With all the new bills out there, cit­i­zens and even many police offi­cers don’t know what they’re sup­posed to look like.

More­over, many peo­ple see paper money less because they use credit or debit cards.

The result: Ink-jet coun­ter­feit­ing accounted for 60 per­cent of $103 mil­lion in fake money removed from cir­cu­la­tion from Octo­ber 2007 to August 2008, the Secret Ser­vice reports. In 1995, the fig­ure was less than 1 percent.

It seems the EURion con­stel­la­tion isn’t doing its job well enough.

April sees the start of another finan­cial year and as such I find myself think­ing about finan­cial mat­ters more often than is typical.

I then stum­bled across Plonkee’s How Much Do I Need to Earn? post, detail­ing how she reverse engi­neered her ideal salary. I had a go myself, and it’s quite enlight­en­ing; it reminds me a lot of Tim Fer­riss’ Ideal Lifestyle Cost­ing.

Both are worth check­ing out and run­ning the cal­cu­la­tions purely to see how much you would really need to earn to do what you like… it was way less than I imagined.