The Kindest Cut

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One my favorite things about early retirement theory, is how very democratic it is.

Regardless of your income, the singularly important calculation that determines how soon you will reach early retirement is the percentage of your take-home pay that you save and invest.

I’m not Pollyanna-ish enough to believe that it is just as easy to save a large portion of your income when your income is low, as when your income is high. But on some level (because it is all a question of proportion,) the lower your income, the more dramatic the effect that small changes in your spending can have on your savings percentage.
Just as each dollar earned has outsized value to a person living paycheck to paycheck, so does each dollar saved.

let’s take an example of a person living in a state with no income tax. This gent earns $100,000 a year as an accountant. After taxes are accounted for he takes home $6392 a month. He saves 5% of his paycheck for his retirement, lives in a rented condo, and eats out a lot.

Inspired by a blog he decides to start saving money for his retirement.

He decides he will forgo cable, and give up his landline. This will save him $75 a month, which he will put into an IRA.

His savings rate jumps from 5% to 6.1 %. Nice baby step, but he has a long way to go.

Now let’s compare this to another gentleman who works in the same state, and also saves 5 % of his take-home pay for retirement, but only makes $25,000 a year working at Walmart. (He’s a manager.)

His biweekly paycheck is only $831.

He also decides to give up cable and his landline, saving the same $75/month.

His savings rate goes from 5% to 9.5% just like that! His expected time until retirement has gone from 66 years to 51 years. He has shaved 15 years off of his working life with this one simple act (compared to a year or 2 for or accountant.).

And if our two gentlemen each add another $75 in savings monthly by, say, biking to work instead of paying for gas for their car commutes, then the Walmart worker’s savings rate would jump to 14% of his take-home pay (retirement will arrive in a little over 44 years.) But our accountant would only be up to a 7.2 % savings rate (no retirement for over 60 years still.)

Now obviously it is less likely that this Walmart worker is a cable subscriber in the first place , and even minor cuts are hard to make at this level of income. But the point is this: the less you make, the more dramatic the effect of your frugality.

But that’s not really why I am writing this post.

The real reason is contained in this sentence: “He decides to forgo cable.”

That’s right, I’m talking about TV.

I think the party line on saving money for early retirement is that giving up your car and drastically limiting your driving, is the most powerful way to cut costs.

And I don’t disagree with that. Think of all the costs that go along with driving: registration costs, mechanical work, insurance, gas, purchasing cost, The list is seemingly endless.

But psychically, I believe the best first step in savings, is to give up your television.

And there are number of reasons for this assertion.

1. TV is our umbilical cord to consumerism.

Even if we include the cable fees, I would argue that the biggest cost of watching television, is that of watching commercials.

No medium does such a good job of instilling in us the desire to consume.

Corporations pay tons of money to broadcast their commercials on The boob tube.

The reason is simple: it works.

And it is a symbiotic relationship.

The advertisers send out lines in the form of commercials, and we take the bait.

Then they look to see what the fish (you and I) are biting (purchasing) with the most regularity.

Then they cast out a new set of commercials better selected to push our buttons and make us want stuff.

And it just goes on and on.

It is a constant dialogue between the advertisers, and the general public’s subconscious.

And this dialogue just keeps on distilling the message into a purer and purer (and more effective) form.

So it is pointless to get angry at advertisers for advertising with sex, or sexism, or voyeurism, or crass humor.

They do this because we want them to. We are voting with our dollars.

But what is not pointless, is to choose not to have our brainstems stimulated so efficiently.

Not watching TV will not take away from your happiness. I promise you that.

You will still have downtime. You’ll still surf the net. You’ll still read books. You’ll still watch movies. You’ll still laze about.

No, what unplugging from this unhealthy relationship will give you is a reprieve from the firehose of consumerism that is intrinsic to broadcast television.

2. Television is an opiate.

Watching television is highly addictive.

Just sitting at a restaurant with a television, I find it almost impossible not to keep turning my stare towards it.

I could watch SportsCenter 24 hours a day and be content.

Food TV , with its pretty, skinny , Italian chefs grilling eggplant rounds is irresistible.

MSNBC is like mainlining a pacifying stream of liberal axioms.

But it just leads nowhere.

You end up no smarter, no happier, no richer, no wiser.

It is the intellectual equivalent of empty calories.

Why give up your valuable free time for such an empty act? Why watch other people play sports, when you could be playing them yourselves? We only have so much time on this earth, after all.


I beg to differ…

3. Free time is a zero sum game.

Let’s say you watch television seven hours a week (conservative estimate.)

Is that really the best use of your time?

Couldn’t you be climbing a rock?

Couldn’t you be pounding golf balls?

Couldn’t you be dancing tango?

Couldn’t you be learning a martial art?

Couldn’t you be reading a book?

Couldn’t you be writing a blog?

Couldn’t you be drawing a picture?

Couldn’t you be playing guitar?

Whatever your chosen hobby, I can almost guarantee that you will be growing while you’re doing it. Whether it be your brain or your muscles or your creative instincts something will be being developed.

Seen in this light, it becomes clear that watching TV is larceny! While we are watching Stephen Colbert being clever, we are not developing our own cleverness. While we’re watching Colin Kaepernick winning the 49ers sixth Super Bowl, our own muscles are atrophying. While we’re watching Giada cook up tasty antipasti, we’re not preparing our own food.


Giada: Behold the miracle of the mediterranean diet

So here’s my challenge.

Cancel your cable for three months.  It’s that simple.

Not even for the money. (Though I would prefer you invest the savings in your retirement, that’s not part of this challenge.)

Just do it, to see if you lose any happiness.

My guess is that you’ll become happier.

And if there’s a show you love watching, why not just Stream it or rent the disks and watch it on DVD?

After all it’s not the TV itself that is stealing from you, it’s all the dope packaged within it that we inadvertently main line  on a daily basis.

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2 Responses to “The Kindest Cut”

  1. Robert January 19, 2014 at 7:09 am #

    Couldn’t agree more. Learned the addictive power of TV in high school and decided to give it up when I got married and my wife and I have never looked back. And certainly never paid for cable TV!

    One correction (not that it takes away from the point you were making): there is no way the Walmart guy takes home only $831 a month on $25,000 per year. That would be taking 60% of his check out for taxes even though he is in a low tax bracket!

  2. Miles Dividend M.D. January 19, 2014 at 3:34 pm #

    Robert. You are absolutely correct, the 831$ was a biweekly, not monthly paycheck. I have changed the post to reflect this. Thank you for pointing this out.


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