LET’S SAY YOU COME into some extra money. Do you take the family on a great vacation or do you remodel that room you try to stop guests from seeing? To come to a decision, you might weigh the fun of the vacation against the pride of the redone room. It’s at this point that some intrepid economist, risking his or her life-of-the-party reputation, would pop up and say, “You’re not doing it right.” Economics is the study of choice—and the big engine for choosing is cost-benefit analysis. That’s what most people will tell you they do. In the above example, however, the economist would point out that the decision-maker is only really comparing the benefits of choice A and choice B, while ignoring the costs. For instance, the cost of a vacation might include: The time to agree on—and plan for—the vacation A family expectation that henceforth all vacations will be grand Lingering regret every time you pass the not redone room, amplified by the look and sigh of your spouse Meanwhile, the room remodeling might bring these costs: Bored kids Money and effort invested in something that will be taken for granted a week after the “wows” have died out The feeling that redoing one room means having to redo another… and another… It’s tricky to thoroughly balance out the costs and benefits of a decision, in part because the weight of each factor is totally subjective and personal. When I teach this to kids, I use a more student-oriented choice, such as deciding between watching TV and studying. First, we list the benefits of each choice, simplistically valuing each benefit as +1 if the benefit is liked and +2 if the benefit is liked a lot. Benefit of doing schoolwork: Better grade +1 Parents happy +2 Helps with next lesson +2 Total benefit +5 Benefit of watching TV show: Entertainment +2 Can talk about show with friends +2 Helps me to be cool +2 Total benefit +6 With the TV show at +6 and schoolwork at +5, it would seem the show wins. But this is only half the job. It’s only a benefit-benefit comparison. To do a cost-benefit analysis, the student must now list the costs of doing each and mark them as -1 (bad) and -2 (really bad). Cost of doing schoolwork: Missing show -1 Spoiler may be given away by friend -2 Need time later to catch up on show -1 Total cost -4 Cost of watching TV show: Parents disappointed -2 Parents ban TV watching -2 Behind other students -1 Give up weekend to study -2 Total cost -7 How does this all net out? The total cost-benefit score of doing schoolwork comes to +1, once you subtract the -4 cost from the +5 benefit. Meanwhile, the net score of choosing the TV show is -1, once the -7 cost is subtracted from the +6 benefit. Lo and behold, once you factor in the potential negative consequences, choosing to study has a higher value than watching TV, so it’s probably the better choice. Did you really expect anything different from a teacher? In weighing two choices, what we’re actually weighing are the consequences of our choices. To be sure, in the above simplistic model, the probability of each consequence isn’t measured. Still, the principle remains: All choices have consequences and, to the extent we know them in advance, we should consider those consequences. Usually, we simply do this sort of analysis in our head. The question is, are we thoroughly considering costs and benefits when making a choice? If we aren’t sure we’re being thorough—and it’s a big decision—we may want to list the pros and cons, and then assign formal numbers to each. It often doesn’t take long. We could probably get it done during the TV show’s next commercial break. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. His previous articles include Scenes From a Life, Changeup Pitch and Bored Games. Jim’s books on teaching behavioral economics and media literacy,  Media, Marketing, and Me, is being published in 2019. Jim lives in Granada, Spain, with his wife and fellow HumbleDollar contributor, Jiab. Together, they write a blog on retirement, finance and living abroad at YourThirdLife.com. [xyz-ihs snippet="Donate"]

GOOD PARENTS WARN their children about predators who look to take advantage of them. By the same token, good adults should warn and safeguard their elderly parents, as well as the other seniors they care for. We all use our electronics for accessing information. We sometimes forget the information highway is two-way, and nefarious people use those lines of communication to get to the vulnerable. And it isn’t just about hacking online accounts. Often, elder abuse starts with a simple phone call. A recent scam illustrates the danger. Seniors received calls informing them that a beloved grandchild was in jail and needed bail money quickly. Told there was no time for formal niceties, the victims were talked into gathering cash that a courier would then pick up. This sounds suspicious to the removed observer, but it’s a common scam preying on seniors’ devotion to family. Whole networks are organized around this scam. A similar scam in Quebec, which recently resulted in four arrests, netted some $700,000. It’s not new. Ten years ago, my mother received a call from a scratchy, soft voice that said, “Hey grandma, it’s your favorite grandson.” My mother, coincidentally having a running joke with a grandchild about this, replied, “Michael?” “Yeah,” said the soft voice, who then went on to explain he had taken a quick trip to Mexico with friends, was being mistakenly held in jail, and needed cash to get out. Plausible, given our home location in Texas and Michael’s nature. Fortunately, my mother had been with Michael the day before and knew something was amiss with the call. These phone scams vary in form, but all have the same purpose. Many offer computer tech support at a discount price. Some say the elderly person is due cash back or a full refund. The callers then try to get credit card information from the senior, opening the money tap for the scammers. [xyz-ihs snippet="Mobile-Subscribe"] It’s a shame we live in a society that not only undervalues seniors, but also has so many people willing to abuse them financially. Unfortunately, as we age, our brain is less capable of detecting possible fraud. Reports of financial crimes against seniors are on the rise. Here are four preventative steps you can take to protect elderly friends and family members: Have a conversation with seniors, stressing that they should never give out personal financial information over the phone, especially credit card or bank information. If the caller is insistent, the senior should ask for a callback number and then inform a trusted family member or financial advisor. Legitimate places don’t mind waiting a day. Keep the senior informed about his or her finances. Younger family members often don’t want to trouble seniors with details, but remember that it’s the seniors’ money and they’re entitled to know. An elderly woman told me her niece, who manages the woman’s money, is saying the senior needs to move to a smaller studio apartment but gives no details. The elderly woman told me she’s okay doing so if she needs to cut expenses, but she wants more information. Speaking of relatives, nearly half of elder financial abuse is committed by someone the older adult knows and trusts, like a relative or caregiver. It’s good to have multiple family members overseeing a senior’s money, so the savings don’t turn into a tempting illicit resource for a single person who isn’t accountable to others. There are resources that monitor and respond to elder financial abuse. The Department of Justice maintains the National Elder Fraud Hotline (833-FRAUD-11 or 833-372-8311), managed by the Office for Victims of Crime. Staffed by experienced professionals, it provides personalized support to callers by assessing the needs of the victim and identifying relevant next steps. The department also offers information through its Elder Justice Initiative. Most of all, maintain an open and nonjudgmental relationship with the senior. Many seniors feel ignored or talked down to. They don’t tell others about scams for fear they’ll suffer embarrassment or be scolded for being foolish. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He's the author of a three-book series on how to teach elementary, middle and high school students about behavioral economics and media literacy. He's also authored several educational children's books. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. They have a book that examines the impact of social media influencers on youth consumerism and identity development coming out in 2023. Check out Jim's earlier articles. [xyz-ihs snippet="Donate"]

I'VE BEEN AWAY FROM the HumbleDollar community for a while. Jiab and I are working on a new book about media literacy, examining the effects of social media influencers on youth consumerism. It will teach kids about responsible web use and how to avoid the traps of the online world. I’ve learned a lot myself, including lessons that apply both online and IRL, short for “in real life.” As part of our research, one of the seedier, more adult corners of the internet I’ve explored is the scam solicitations that come to just about every user of social media. All platforms have their cyber-pirates hunting for vulnerable prey. Let me recount my encounters on Instagram as representative of the type. Most scammers begin with an innocuous hello and some questions about my location and job. I usually say I’m in Atlanta—rather than my real Texas home—just to obscure the trail a bit. The profiles almost always seem to show photos of provocative young women. A Google image search shows that the same pictures are used in a variety of accounts. After the intros comes the flattery. When asked for a pic, I send one of a famous actor about my age. This often elicits, “You’re so hot, I want to party with you.” Then comes the pitch, such as asking for gas money so she can come to my house. Some tell me they’re multi-millionaires who want to share their good fortune by giving me money. As a teacher, I’m both amused and a bit irked that these scammers don’t do better homework preparation: A woman in Los Angeles told me she could drive to my Atlanta home “in just a couple of hours” if I spotted her gas money. A Phoenix woman confirmed that she saw September’s surprise snowfall there, telling me it was beautiful. The surprise is it hasn’t snowed there in decades. When I told one inquirer that I lived in Atlanta, Georgia, she enthusiastically said she was nearby in Batumi—a city located in the Republic of Georgia. All this is amusing until you consider that people really are taken in by these scams. The Federal Trade Commission said consumers reported $770 million in social-media-originated fraud losses to the agency in 2021. Bear in mind that’s what was reported. The FTC estimates that only about 5% of fraud victims report the matter to a government agency, often because of embarrassment. Scammers succeed because they know our three vulnerabilities: We let emotion get ahead of rational thought. Scammers try to catch people in a weak moment. Most people won’t respond to flattery or attention out of the blue. But it’s a numbers game. Somewhere out there are lonely people for whom kind words and compliments make them lower their guard. Some victims have been lured into sending intimate pictures and videos later used to blackmail them. Desperation and worry over debts can silence our brain’s warnings that the “can’t-lose'' money opportunity is a trap. An online “financial advisor” lists tips for when you’re behind on the rent. Several include playing online games that “pay” you—but also encourage you to pay them to increase your odds of winning. [xyz-ihs snippet="Mobile-Subscribe"] Many online brokerage firms are nothing more than investment platforms controlled by scammers. A victim’s account seems to show positive earnings at first, but that’s just to get the victim to increase his or her investment before it’s all pulled out. Other times, goods privately sold online go undelivered. It remains a rule that if a deal appears too good to be true, it probably is. We forget that information is the key that opens the vaults. I have been told that I’m owed money or that a generous person wants to give me some. I just need to share my PayPal, Venmo or other electronic payment information so the deposit can be made. People who have done so find themselves locked out of their account or with money withdrawn. Sometimes there’s not much gone, so the account holder doesn’t notice, but small sums are subtracted regularly. A fake lottery winner sent me “her” information sheet to fill out, so she could share some of her newfound wealth with me. The form was clearly copied from the internet, still bearing the Publishers Clearing House watermark. Had I sent it in, my identity and all my account information would have been in the hands of a scammer. We can be tricked into lowering our guard. Clicking links sent to us by people we don’t know—and even people we do—is like going down a dark alley. A phishing link or SMiShing text can open up your computer to being attacked by malware, your data stolen or your computer held for ransom. Beware of emails purportedly from major companies such as Amazon, Apple and Facebook. Real companies never directly email you to ask for your account information. Upon examination, you may notice a slight misspelling or other problems with the sending email address that'll be a clue it’s not from the actual company. These scams use the same sales techniques employed in real life—by door-to-door salesmen or phone solicitors—just adapted for the internet. Scammers gain false trust, get marks to lower their guard and then take advantage. Online may be a new world to many. But as explorers warned long ago on the maps they created, here there be monsters. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He's the author of a three-book series on how to teach elementary, middle and high school students about behavioral economics and media literacy. He's also authored several educational children's books. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. They have a book that examines the impact of social media influencers on youth consumerism and identity development coming out in 2023. Check out Jim's earlier articles. [xyz-ihs snippet="Donate"]

THE GREEN KNIGHT is a new, Arthurian-age fantasy film that was released at the end of July. The crux of the story: The Green Knight offers a challenge at King Arthur’s court. He will allow any knight to take a swing at him with his great axe, as long as that knight agrees to receive a blow a year and a day later. Sir Gawain, one of the youngest of the Round Table, accepts the challenge. He beheads the Green Knight with one swing—only to see the Green Knight recover his head and tell Gawain he shall see him in a year and a day. The rest of the saga is about what happens to Gawain leading up to their second meeting. It’s filled with the ideals of knightly honor and chivalry that now seem lost in the past. I contend, however, that this 14th-century tale has much to teach us about how we should conduct ourselves in today’s legal and financial worlds. The medieval tale has been studied at length. What many literary analyses overlook is the significance of the contract being a year and a day. English common law held that a contract for services that could not be performed within a year’s time had to be written down. (Every first-year law student meets his own challenging knight when facing its statutory form, the Statute of Frauds of 1677.) As the Green Knight’s contract was oral, Gawain has no technical obligation to make good on his oath. Yet he keeps his word. This is not just chivalry. It’s about preserving the order of things. At a time when most people were illiterate, keeping public oaths was vital to society. If folks could shake hands and promise but later renege, no contract was safe. Indeed, nobody wanted a reputation for being untrustworthy. Traders would avoid such individuals. The root of the word “warlock” is not about magic. It comes from “oath breaker.” In the Inferno, Dante reserves hell’s lowest level for Judas, Brutus and Cassius. All were guilty of breaking their oaths and changing loyalty. [xyz-ihs snippet="Mobile-Subscribe"] As literacy has improved, we’ve become more reliant on written contracts. We click that we agree to a website’s terms and conditions, and then move on. Disclaimers and fine print abound. Yet the national ethos of personal gain, combined with mobile buyers and sellers with whom you may never again do business, has led to sharper dealings. If someone doesn’t live up to the terms of a contract, we can run to the courts. Legal resolution, however, should be the fallback position. It costs a great deal to sue. No lawyer enjoys telling clients that they’re legally correct, but the case will cost more than they can expect from the court. We could use more dedication to oath-keeping today. People like knowing they can rely on a seller or service provider. Merchants have easy ways to demonstrate their trustworthiness. Good online reviews translate to more sales. Customers want an assurance of fair dealing before clicking the “buy” button. Life was not perfect in medieval times. There were enough cheats and oath-breakers to populate Chaucer’s many tales. When I taught high school, I used the Pardoner’s Tale in my media literacy class as an early example of marketing chicanery. Still, most businesses understand that their future business depends on their honesty in today’s transactions. Unfortunately, we may feel outrage at a dishonest dealer, yet return later strictly out of convenience. Or, if powerful businesspeople are accused of dishonesty but we like their politics, we may excuse their behavior as “smart business.” Then there’s “cause fatigue.” It seems that every business today has some black mark against it. It’s nearly impossible to be aware of them all, let alone separate fact from rumor. My advice: Start small. Go local. Frequent that mom-and-pop store in your neighborhood. Reward both its “local-ness” and its reliability in the community. If you know of oath-breakers, let them know their dishonesty has led you to withhold your patronage. Shout it out on Yelp, Twitter, Google reviews or wherever there’s a local forum. Sometimes companies do respond to criticisms. Yes, businesses do game sites by leaving positive reviews for themselves. Still, a truthful negative review may raise a red flag. The reviews matter. And don’t forget to post praise as well when you find a knightly merchant who is both fair and true. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He's the author of a three-book series on how to teach elementary, middle and high school students about behavioral economics and media literacy. He has authored several educational children's books, including "Summa," a children's story for multiracial, multi-ethnic and multicultural families. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. Together, they are currently working on a book, “Your Third Life: Reflections on Finding Our Way by Taking the Long Route.” Check out Jim's earlier articles. [xyz-ihs snippet="Donate"]

THE AMERICAN DREAM. Rags to riches. The self-made man—or woman. Everyone growing up in the U.S. is told of these ideals. We are sharks who must keep moving to survive. The only acceptable direction is up. We do it for ourselves, believing happiness is just over the next hill of “more.” We do it for our family because providing is an act of caring. If there’s a least-debated rule in economics, however, it's that everything comes at a cost. This is especially true for the resources needed for production, whether of a thing or our own careers. The scarcest resource of all? Time. No more is being made. It’s the short tablecloth with which we try to cover everything we want done. In racing to the top, people turn themselves into human capital, another resource to self-exploit. They drive themselves with demands for more productivity. If such demands were made by our boss, we would go on strike. But coming from ourselves, we forgo taking time off, will work when sick and sometimes even sacrifice time with family, all out of fear we’ll fall two steps behind the other guy, who’s also running exhausted and bleary-eyed. I was waiting for my son to finish Sunday school one morning when another waiting dad, looking at his phone, yelled out an expletive. At 3 a.m. the night before, a competitor for a business account sent an email, so the dad was now saying he’d have to dedicate the rest of the day to responding. I know this is a problem for the privileged—those lucky enough to be in semi-control—and I know entrepreneurship drives the economy. But at what cost? Isn’t quality of life worth more than stuff? When does “more” become "enough"? During our three years in Spain, I remember how rush hour was at 2:30 p.m., when parents picked up their children from school and entire families then lunched together. There are few, if any, drive-through gulp-and-go eateries. If an American showed off his spacious house, with its amenities of grand living, chances are Spaniards would wish the American good luck with it, while they happily gathered at a café or park with neighbors who—on average—live in homes half the U.S. size. We say that this is our choice, but is it? Virtually every executive I know can recount all the times they had no choice but to give up something, and that was usually family or mental-health time. Most retirees will tell you they don’t regret devoting more time to work, but they do regret the time they didn’t give to their family. I’m not anti-entrepreneurship and certainly not anti-American. I’m pro-balance. My best family memories are not from when my parents were away working, but when we did the smallest things—together. My suggestion: We should all consider doing less for the ones we love and more with the ones we love.

MOST FOLKS DON’T teach and write about a topic until after they’ve earned a degree in the subject. Owing to my career path, and the nebulous nature of my specialty, I’ve done the opposite—with the next step coming in 2022. I went to law school just after college because—frankly—I had no better plan. I enjoyed being a lawyer, but I knew it wasn’t my passion, so I went into teaching. I loved it. I taught various humanities, mainly at the high school level. One subject that stuck with me was economics. A school administrator asked me to teach econ because he figured I knew about it as an attorney. The man clearly didn’t know lawyers. Still, I liked it, except that the texts kept addressing students as “future participants” in the world of economics, even while I watched them work, shop and otherwise already be a part of consumer culture. On top of that, the world of textbook theory—with its assumption of conscious rational decision-making—isn’t actual reality. I also saw how my sons, still in elementary school, were already having their consumer habits shaped like stalagmites by constant media drips. Adult marketers told them saving wasn’t as fun as spending, and that they were a nobody if they didn’t show their individualism in the same way everyone else was or didn’t collect all of whatever was the latest hot thing. I started reading. I dug up my old college psychology books. I studied behavioral economics from Thorstein Veblen  to Richard Thaler. I pored over books on how to market to young people, and then used their strategies to create lessons on how to counter them and empower youth. I published articles and wrote books in the then-nascent area known as consumer economics and media literacy. The field was new, so no one had a degree. Now, I’m retired. My wife and I call this our “third life,” our time to wander and wonder. If you’ve read our stuff, you know we have done just that. We traveled and lived abroad. We have now returned to Dallas, but that doesn’t mean our wandering and wondering have stopped. We’re taking it inwards—by going back to school. There’s still no degree specifically in media literacy, but the University of Texas at Dallas offers an MAIS, or Master of Arts in Interdisciplinary Studies. With much trepidation, I wrote the dean a long letter that basically asked, “Am I crazy?” She wrote back and then we spoke on the phone, sketching out a program combining a bit of economics, marketing, communication and psychology. She offered to waive the GRE and other entrance requirements, given that I already had a law degree. She made it easy and welcoming. How could I say no? At age 60, I plan to be back at school this spring. I’m scared and excited. It will probably cost $36,000 to $45,000 when all’s said and done, plus a lot of time and effort. Can I remember how to be a student after 35 years? Can I hack it academically? And what do you wear to school dances nowadays? It’s daunting. But I feel that—in my retirement—I now have the money and time to follow my passion. It’s just taken a lifetime of experiences to figure out what that passion is.