IN SPAIN, “CHAPUZA” means something botched because of inattention or sloppy work. We learned the word when repairmen rewired the buzzers in our apartment building. They finished the work quickly so they’d be done in a single day. At 2 a.m. that night, we discovered the job was chapuza when our neighbor kept buzzing our apartment—because the buzzer had been mislabeled. Chapuza can be found everywhere. Back in the U.S., we hired a highly recommended electrician to do major work on our home. The two-day job went into a third hot day. Everyone wanted it done. Unfortunately, one of the younger guys in the crew rushed. We discovered afterwards that he’d dropped a tool out of the attic door that gashed our wall. That cost the company owner $100 to repair. Even worse, a week after the job was finished, I found two trucks and a bevy of people from our city power company clustered around our meter. The lead guy said it was running backwards and not charging us. I thought it was a joke and asked if the city was going to write me a check. It was no joke. Our electricians had gone chapuzas and, in the end, the city assessed us $782 to correct the meter. Of course, I passed this on to the electricians, who agreed to cover it. I’m sure that, combined with the $100 wall repair, it more than ate up their profit on the job. Chapuza can also be found in financial decisions.  A young man, whom we know extremely well, was lucky enough to get a good, high-paying job straight out of college as a software engineer. He had money to invest and decided to blindly go with an investment company that was recommended to him, rather than checking it out. He didn’t want to bother with all that research. Despite our warnings, he’s being charged unnecessary and exorbitant fees by this large institutional behemoth. Perhaps when he realizes the needlessly subtraction from his profit, and calculates the compound loss over time, he might be a little less chapuza about investing—and also realize Mom and Dad know a thing or two. As the Spanish say, “No seas chapuza.”

MY FRIEND HAFIZ HAS a common midlife problem. He’s built a successful career over 20 years. But now he wants a change—a new direction to focus his energy and talents. Over coffee, we kicked around the different paths he might take. Some were offshoots of his current job, such as becoming an industry consultant. Others were wholly new, like becoming a writer. “The problem,” Hafiz sighed, “is that whatever I do, it’s gotta pay for the country club.” Hafiz explained that, while his wife was the primary earner, his salary was dedicated to certain lifestyle luxuries, most notably the dues at their country club. Now, I’m not against someone enjoying country club life. We belonged to one ourselves for a while. What struck me, however, was Hafiz didn’t seem to be enjoying his membership so much as feeling trapped by it. It was an anchor limiting his movement along alternative paths to happiness. It reminded me of a Vox piece I recently read about what they call the near-rich. We often focus on the top 1% of Americans, with their yachts and jets. They control as much wealth as the bottom 90% of the population, according to the article. The near-rich, like my friend, are those in-between. While comprised of 9.9% of the population, often they’re the drivers of the social standards of American society. Through hard work and good education, many of them have successfully worked their way up to achieve an enviable lifestyle. Others have capitalized on the head start they were born with. They have played the game well, done it “right,” and now reap the rewards and symbols of success. According to the Vox article, however, there can be a problem lurking under this success. For the near-rich—and I include my own family in this group—the road to success is so well-worn that it can cut off the imagination. It limits our ability to consider other paths, or even other measures, of success. In my friend Hafiz’s case, he has certainly earned all the rewards from building a successful career. But now, these rewards—or a fear of losing them—hold him back. He can’t imagine a successful life without a country club membership. Fortunately, I see a change in attitude among millennials. As a retired teacher, I’m in contact with many of my former students. They’re still early in their careers, but seem less concerned with the traditional measures of accomplishment. They’re willing to work fewer hours and are less interested in rising up through the corporate ranks. In exchange, they have fewer possessions to worry about and more time for family and friends. They shun homeownership for the flexibility of renting. [xyz-ihs snippet="Mobile-Subscribe"] We oldsters may cluck our tongues and call them lazy for not striving for the things we think mark success. But perhaps they’ve seen the pitfalls of those traditional trophies, such as housing busts. They’ve become more creative and thoughtful in figuring out what they want. Some people even complain millennials are “killing" industries. But isn’t it their right to redefine consumerism on their own terms? The bottom line: Millennials are content. My wife and I both went directly from college to grad school and then on to a profession. We were taken aback when one of our sons, whose goal is to become an actuary, said he wanted to take two years after college to teach in Japan. Would it put him behind on the career path? What about the schedule of actuarial exams he had to take? What if he didn’t come back? He went, paying his own way. And, after two years, he returned. He’s just taken his fourth-level actuarial exam, and has a good job with State Farm. Even more, he has a world of extra cultural exposure. I realize now that, even if he had decided not to be an actuary, that would have been okay, too. Our other son had a high-paying software developer job in Madison, Wisconsin. He walked away to take a similar job with a smaller company in Austin, Texas. Austin is closer to his family and friends. Also, he’s a runner, and Austin has more tolerable running weather. When we are young, we’re told to imagine all the possible places we could go. We can’t let the success of one path, even a well-worn road, let us lose sight of the road less travelled. 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. Jim’s newest book is Enough Stuff, a story about appreciating family and friends—rather than gifts—during the holidays. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. Together, they're 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"]

ONE SUNDAY, MY SON was lamenting that he had a school project due the next day, but hadn’t yet taken any steps to get it done. When I asked what his plan was, he replied, “I could use a really good montage right about now.” For those who aren’t procrastinating teens with a father who delves into media literacy, a montage is a series of quick shots in a TV show or movie that accelerates time around a theme—that theme often being the effort and time expended to achieve a goal. Think of the athlete training for the big event, the artist trying to create, the business group trying to formulate a project, or even a building slowly going up. One sees the passage of time condensed on screen, perhaps with a brief stumble or glint of frustration along the way. But in the end, there’s the assured and ultimate victory. Such shows always detail the end result, but the long road to success seems summarized. Why is it truncated? You know why. It’s boring. It’s tedious. It’s often discouraging. Most of the time, those on the journey have no assurance of where the road will end. But that’s life. Think of the things you enjoy right now. A good relationship with a wonderful partner? It wasn’t built in a moment’s stare into each other’s eyes, but rather from working through issues, everything from easy ones about the kids to tough ones about the best way to load the dishwasher. Most people who visit sites like HumbleDollar are already attentive to financial issues. But what are the messages that movies and TV shows give to the average money handler? Wealth is often suddenly and fortuitously thrust upon someone. Saving is shown in a quick montage, starting with a few cents in the piggy bank and then—poof—the couple have the money they need. Spending for today is shown as rewarding and yet later there’s almost never a financial reckoning. To be sure, no single depiction will cause a viewer to become a spendthrift. But just as stalagmites are slowly formed by constant dripping, so too are our attitudes about money. There are many factors at play, but movies and TV shows aren’t helping. As a media literacy geek, I could demand that entertainment be more financially realistic. But—speaking of being realistic—people want to see the fun parts of life. It’s why few documentaries are blockbusters. How can we nudge ourselves along the long, uneven path of saving and delayed gratification? Perhaps we should treat our financial life like a movie, especially when we’re at that fork in the road where there’s a choice to spend or save: We hear a Rocky-like theme song as we delay spending’s immediate pleasure and instead struggle to keep the money in our wallets. Alternatively, we could have a general theme song to our life that reinforces the notion that everything is part of a long-term plan. My choice is Green Onions. We could imagine an audience is watching us as we make that spend or save decision. In fact, there may really be an audience—consisting of our children, whose money habits will be influenced by what they see. We have a cutaway “stumble” scene in our montage where we spend too much. Then we shake our heads, pick ourselves up and get back on the savings path. It’s also important to leave room for a sequel. We achieve our short-term savings goal, so we climb the stairs and raise our arms in victory. There will, however, be other, greater challenges ahead. We might even be laid low and have to struggle to reclaim our earlier victory. But we will prevail. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. His previous articles include Changeup Pitch, Bored Games and Shame on Us. Jim’s three-book series 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"]

HOW MUCH WOULD you pay for $10? Taking my cues from a game developed by economist Martin Shubik, I’d offer to auction off a $10 bill to my high school students. There were three rules: Students could only offer bids. No commentary, cooperation or deal-making were allowed. The highest bidder paid me the money and received the $10. The second-highest bidder had to pay me their final bid but got nothing. I ran such auctions for 20 years and it almost always had three stages. Phase 1: Many students dabbled with bids in increments of five or 50 cents, slowly inching the price up. Phase 2: The dabblers dropped out and only the “serious” players remained, usually getting the price up to $5 or $6. Phase 3: The trap springs. Misha bids $6. Ben counters with $7. Misha, realizing she’s looking at paying $6 while getting nothing back, is forced to outbid Ben and goes to $8. Ben decides to finish it by bidding $9.99. Misha does some quick math and decides to bid $10 to break even, rather than pay $8. But wait, there’s more. Ben surprises the other students by bidding $10.01, rationally deciding it’s better to lose a penny than $9.99. Misha now faces the same dilemma, and so it goes on. At some point, I call the auction off and, despite my teacher salary, tell them no one has to pay me. I ask Misha and Ben to describe how they felt, which almost always includes feelings of regret and being trapped. They were no longer bidding to win, but to minimize their loss. This exercise is a great way to introduce students to the sunk cost fallacy. What’s that? It’s the spending trap that—once you start down a path by putting money into a venture—you feel compelled to see it all the way through, lest you’ve wasted the initial outlay. It’s “throwing good money after bad.” Funnily enough, the British have an opposite expression, “In for a penny, in for a pound,” which means you show determination by sticking it out, no matter what. That can achieve great things, but it can also be a lot of wasted pennies—which could have gone toward buying an ale to celebrate losing only one penny. The sunk cost trap is everywhere because we’re taught that successful people never give up, winners don’t quit, and the best solution is to never regret and never retreat, but instead always move forward. Unfortunately, this can also lead to prolonged failure, such as when decision-makers—who have invested financial, political and personal capital in a course of action—refuse to acknowledge that the time has come to cut bait and find another fishing pond (or try golf instead). A classic example: the Vietnam War. Back in 2019, a seeming lifetime ago, my wife Jiab and I went to the beautiful seaside Spanish village of Almuñecar. Located on the Costa Tropical of Spain, it’s one of those movie-like places with white-washed houses with Moorish accents and long sandy beach buffeted by the azure-blue Mediterranean. We loved the place for ourselves, but also learned it was just starting to be discovered by tourists coming to Spain for vacation, especially from Scandinavia. We immediately decided to look into buying a place that we could use occasionally for our own getaways, but mainly to generate holiday rental income to supplement our retirement. We found a place close to the beach and, by early 2020, we had settled on a price and put down a deposit. In Spain, there’s a quaint custom that real estate deals aren’t finalized until all parties meet with a notary, who reads the document aloud and signs off. This is left over from centuries ago when people were illiterate, so the notary ensured all parties understood what they were signing. Today, it’s a pro forma (and expensive) ritual that seals the deal. Only we didn’t get to it. [xyz-ihs snippet="Mobile-Subscribe"] COVID-19 hit and, as many remember, Spain went into total lockdown. All meetings were put off, so we sat in our home in Granada and waited to finalize the deal. And waited. Of course, our first priority was to do our part to stop the spread of COVID, so we stuck it out at home. As the situation remained in stasis, and the news everyday foretold a “new normal” coming, Jiab and I started reconsidering the house purchase. For ourselves, there was no foreseeable time when we’d be allowed to go to the new place. Even more, no one was sure when—or even if—tourism would come back, so the prospect of the new place being a positive money-generator evaporated. There were even stories that groups were seeking out unoccupied homes and taking them over as squatters, often trashing the place. On the other hand, we had already sunk a lot of money, time and effort into researching Spanish real estate, finding the place and negotiating a price. We had paid a lawyer both to translate for us and guide us through the process. We had a deposit that was partly nonrefundable. We ended up letting the place go. We cancelled the deal from our Granada home, informing the seller that he could keep the nonrefundable portion of the deposit. We wired payment to our lawyer and then reluctantly accepted that we were out of pocket, with nothing to show for it. Except we had escaped. We didn’t have to worry about squatters living in our rental property, or closely monitoring an inaccessible home, or fighting with others for the scraps of tourist dollars that were trickling in. We also realized how lucky we were, as we fretted about losing a second home, while many today are in fear of losing their primary one. I suspect others are facing similar tough decisions, as COVID changes the entire financial lay of the land. It isn’t a bad idea to think about what ventures, investments and dreams we might be better off walking away from, or at least putting off for the moment, no matter how much we’ve already put in. Perhaps we should save what we still have, so we can spend it another day. After all, $10 isn’t what it used to be. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. His previous articles include Choice Words, A Poisoned Chalice and Falling for Flattery. Jim is the author of Media, Marketing, and Me, about teaching behavioral economics and media literacy, as well as Summa, a children's story for multiracial, multi-ethnic and multicultural families. Jim lives in Spain with his wife and fellow HumbleDollar contributor, Jiab. Together, they write a blog on retirement, finance and living abroad at YourThirdLife.com. 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GOT SOMETHING THAT needs repairing? Faced with the increasing specialization of people’s knowledge, ever-growing technical complexity and our perennial lack of time, it’s often tempting to just call in an expert or even buy a replacement. But repairs can be costly, which is why we’re told to get multiple bids. One of the “bid” options I always check out: fixing it myself with the guidance of that repository of collective step-by-step knowhow, YouTube. Perhaps not since the Great Library of Alexandria has so much expertise been collected in one spot—along, of course, with endless cat videos and slick dance moves. Battery for the car key fob gone dead? YouTube plus $5 for the battery beats $20 at the dealer. Repairing a gate latch becomes a choice between installing an $18 latch delivered by Amazon or paying $100 for a guy to come out. Same thing with a leaky showerhead. I recently called about a garage door repair. The repairman said he charged $80 just to come out, which would be over and above the cost to repair. Perhaps best of all, there’s that feeling of accomplishment from having both mastered a new skill and saved some cash. As a retiree, I love the small challenges involved. My peers sometimes shrug about broken things and say they never learned to do repairs. But is it ever too late to start learning? A fence repair became a family activity with my sons. My daughter-in-law to be—a baker—changed the oil on her car, courtesy of YouTube tutelage. She was so excited she offered to do ours. Strikes me as a good thing: You learn skills, exercise the mind—and save money. Or, as Ben Franklin supposedly said, “Watch the pennies and the dollars will take care of themselves.” But it seems he got that off the internet.

PSYCHOLOGISTS and biologists call it a supernormal stimulus response. Basically, organisms evolve in the direction of what’s good for them. There doesn’t seem to be an off switch to this instinct, however, so organisms can pursue these “good things” even to their detriment. For instance, field researchers have shown that birds instinctually drawn to colorful eggs will roost on more colorful fake eggs—and ignore their own. And, no, humans aren’t immune to such mistakes. Sunlight is good for us, but many know the pain of sunning to the point of sunburn. Advertisers know we have basic urges for sugar, salt and sex. They use these urges to nudge us to consume, say, sugary foods and salty snacks. Instinct can push us to crave more abstract things, too, that are higher on Maslow's hierarchy of needs. Financially, we can be nudged to go further than a healthy budget would allow. Our rush for a secure home can cause us to overspend. Biology and aesthetics say we desire a fit, attractive partner. But many cried “too far” at Peloton's sexist Christmas advertisement a couple of years ago. There’s also that strong desire to be viewed as “successful.” How that looks is ever-changing, but in a material world it almost always comes down to money and goods. We go into debt to be alpha peacocks, taking out huge mortgages so we can show the world an ever-bigger nest. On the road to success, we’re all accelerator and no brake. Even those who don’t crash aren’t “winners” because there is no finish line to this race, just the next urge to spend. If we don’t seem to have a natural off switch to our instinctual desires for more, can we create artificial ones? Even if we can't train ourselves to stop throwing good money after bad, could we at least stop ourselves from throwing away too much good money? Some people can simply say “enough stuff,” which just happens to be the name of a book I wrote, and walk away. On their daily calendar, many make notes to “do” or “don’t do” some things. Others need more tangible visual reminders—such as a sign in front of their computer that asks if the time, fees and frustration of all their portfolio manipulation is really worth the possible extra return. One friend has a small yin-yang symbol tattooed on his wrist to remind him to pause before acting. It’s a long story, but two weeks ago was a really bad time for our family. My stimulus response in such circumstances is to jump into action. I was doing everything—and nothing—all at once to try to fix the situation. This usually works, but this time it was like spinning the wheels of a car trapped in mud. My escape strategy was just digging a bigger hole, especially mentally. As luck would have it, I had to immediately travel to Thailand for in-law matters. Separated by time differences—and an unreliable internet connection—I was forced to quell my instinct to do things and just, well, ruminate. I thought, I mourned, I reflected. I was less active in trying to make things better, and that was a better resolution for me.