Comments on: Behavioral economics question of the day

By: Michael Martin

Michael Martin — Thu, 09 Jul 2009 02:59:11 +0000

Don’t buy lottery tickets…and don’t play roulette. Like the lottery, it’s a game of negative expectation

http://www.huffingtonpost.com/michael-ma rtin/broke-the-new-american-dr_b_225806. html

http://martinkronicle.com/2009/07/04/bro ke-the-new-american-dream/

By: ac

ac — Wed, 08 Jul 2009 22:06:29 +0000

is it too late to buy yen?

By: daniel

daniel — Wed, 08 Jul 2009 21:11:34 +0000

go to a casino and do a martingale strategy for up to 5 spins.

30 black/red
60 black/ red
120 black/red
240 black/red
480 black/red

if you hit on any of these you will be up $30 which is a 3% return..

By: Drewbie

Drewbie — Wed, 08 Jul 2009 20:48:25 +0000

Don’t bother putting it in a savings account, unless you get bi-monthly interest. Otherwise, it’ll actually cost you money. Interest isn’t figured by the start to finish balance, only on the initial balance, minus any withdrawls. Any deposits recieve no interest. So, if you have $100 in your account, deposit $50, then withdraw $50, you’ll only recieve interest on the $50 that was there “the whole time.”

By: Gram

Gram — Wed, 08 Jul 2009 20:42:57 +0000

good post, they did a follow up story on this at http://www.darkpooltraders.com

By: Ignacio

Ignacio — Wed, 08 Jul 2009 20:37:55 +0000

Dear Sir:

Use your money to help me pay for some administrative fees to release one million dollars that are deposited in a Nigerian bank, which used to be owned by a recently deceased former dictator. In reward for your assistance, I will give you 30% of the funds released prior to the date your credit card bill is due.

By: ThatSueAgain

ThatSueAgain — Wed, 08 Jul 2009 19:56:53 +0000

Either make the payment to the credit card early or put it in your savings account where your earnings already go (you do that don’t you?) to earn interest while it waits, and draw it out when the statement arrives. If you really need help with this arduous concept, think of it like that second job you worked to make the extra $ for that big bill you have coming. I don’t see the temptation to spend it, that would be like an irresponsible teenager. I may have to consider whether I want to read an irresponsible teenager’s blog ;)

By: Matthew K

Matthew K — Wed, 08 Jul 2009 19:18:51 +0000

Give it to your wife.

By: Matt

Matt — Wed, 08 Jul 2009 18:40:05 +0000

Just put something in your shopping cart at your favorite online store, and leave it there until the bill is paid. Window shopping in this manner can be very satisfying.

By: Tony NSW

Tony NSW — Wed, 08 Jul 2009 18:22:23 +0000

Good morning Felix, sit on the couch and relax.

I think you are suffering “from cash out phobia”. There is no need to panic or feel overly guilty as most US consumers (and pollies) have the condition.

Lets use ‘reverse opperant conditioning’ here, print your penpal monthly statement on A3 paper and stick a copy on the back of the toilt door and other strategic locations.

Soon your anxiety will abate.

(Felix) Thanks Doc.

By: nick gogerty

nick gogerty — Wed, 08 Jul 2009 18:08:35 +0000

If you were in CA you could stand outside a wells fargo bank on pay day and print up a placard to Buy California Pesos (IOUs) on craigslist and then flip them. Should provide a high yield

By: odograph

odograph — Wed, 08 Jul 2009 18:00:52 +0000

Yeah, behaviorally pay-pal is like almost-spent.

Donate it to charity? That would hurt but be an easy pay-pal out.

By: Don the libertarian Democrat

Don the libertarian Democrat — Wed, 08 Jul 2009 17:43:11 +0000

In giving financial advice, I would need to be paid a small fee. Say, four figures. Just guessing, I’d say my fee would be very close to the amount of money in your Pay Pal account. Should you forward me the fee, I’m fairly certain that I can tell you what to do with that money.

By: Josh

Josh — Wed, 08 Jul 2009 17:39:38 +0000

First of all… do you have any real savings? Are you living pay check to pay check? Is it possible you could loose your job and possibly a residence? If so, you have no business gambling on scam investments. Do not spend money that is not yours or that you didn’t earn. It will only come back to bite you and hurt others. Unless of course you are one of those people who think its OK to risk bankruptcy because everyone else will bail out your dead beat @$$. Which is why we are where we are in this ridiculous economy rife with moral hazard.

By: Ken

Ken — Wed, 08 Jul 2009 16:22:06 +0000

As a rational economic actor, you should investigate all possible investments, purchases, loans, and other uses of the money (keeping in mind of course your known liquidity requirement in a few weeks) and select the one which maximizes the expected value of your personal utility function. The advantage of this approach is that it will fully occupy your time for the next three weeks, at which time you will pay the credit card bill using the funds, which you have not had time to spend due to your research.