Save Invest Retire

Work obligations are consuming my time and energy at an alarming rate, but I hope to be back posting in a week or so, so stay tuned.

Check out Dailylit.com, a free site that will email you five minute chunks of Creative Commons or Public Domain literature for your daily reading pleasure.

This is kind of a lifehacker approach to doing a little more reading. After all, you probably spend a significant chunk of your day catching up on work or personal email, so here is a seamless way to incorporate a little pleasure reading into what is normally a duty.

There’s an interesting post over at The Frontal Cortex on the Psychology of Sub-prime Mortgages. It discusses scientific studies showing that people tend to choose sub-prime mortgages, even at awful rates, because the emotional reward center in the brain overvalues the short term benefits:

The best evidence for this idea comes from the lab of Jonathan Cohen. Cohen’s clever experiment went like this: he stuck people in an fMRI machine and made them decide between a small Amazon gift certificate that they could have right away, or a larger gift certificate that they’d receive in 2 to 4 weeks. Contrary to rational models of decision-making, the two options activated very different neural systems. When subjects contemplated gift certificates in the distant future, brain areas associated with rational planning (the Promethean circuits of the prefrontal cortex) were more active. These cortical regions urge us to be patient, to wait a few extra weeks for the bigger gift certificate.

On the other hand, when subjects started thinking about getting a gift certificate right away, brain areas associated with emotion - like the midbrain dopamine system and NAcc - were turned on. These are the cells that tell us to take out a mortgage we can’t afford, or run up credit card debt when we should be saving for retirement. They are our impulsive pleasure seekers, the hedonists inside our head.

The implications are far reaching, because similar behavior is seen in the difficulty people have in saving money. This seems to be an explanation for something the frugal community has always known, that it is tempting to spend money because the intellectually sensible choice offers a different sense of reward. More importantly, I think it stresses the importance of psychological and behavioral approaches to saving and debt elimination, such as Dave Ramsey’s debt snowball over a purely number-crunching view, such as paying down the debt with the highest rate first.

Maybe this will get me moving to do that debt snowball post I’ve been putting off.

As I promised Monday, I went ahead and tried out Netflix’s “Watch Now” feature. My review is:

Shoot this dog and put it out of its misery!

Man, what a disappointment! I am an unabashed fan of Netflix, but it went completely the wrong way with its new “Watch Now” service. It is not available on a Mac, you can’t use Firefox or any browser other than Internet Explorer 7, you need to use Windows Media Player (WMP), and YOU ARE REQUIRED TO USE DRM THAT DOESN”T WORK!

I tried the service on two computers, both of them PCs under three months old, one running XP and the other Vista. I initially felt pity for the poor bastards using Macs who couldn’t access the service, but hey, at least I would be able to use it. Not so fast, cowboy! I tried for about an hour and a half on both computers to get a movie running, but no dice. During that period, I also spent more than 45 minutes waiting for Netflix customer service to pick up and put an end to the elevator music before I finally gave up on that too.

I updated both computers, updated both versions of WMP, upgraded the security components per Netflix, ran the “reset DRM” utilities per Netflix, and did every other damn thing required of me, ad nauseum, through the endless loops. Nada for both computers. I attempted to obtain new DRM licenses from Netflix, but the license site it listed was a bad link. What a mess from beginning to end.

In the course of two days I went from initially considering buying Netflix stock to considering canceling my service completely. I simply cannot believe Netflix uses such a crippled and useless setup as Microsoft’s DRM. I hadn’t drank the anti-DRM kool-aid before this, but sign me up for a grande now.

If you can get this thing working, I hope you enjoy it, but all I can do is watch the movie buffer and then mock me with its unavailability. It is an incredibly bitter pill be unable to access significant features of my account. Even more so because the promised features didn’t really exist for me until recently. I’m not saying others will have the same trouble, but if an average computer user like me cannot get this thing working on two different new computers and can’t get through to tech support, then there is a problem somewhere.  Good luck.

We’ve been relying heavily on Netflix as our movie source ever since we canceled cable. Recently Netflix actually lowered its subscription prices, yet again reaffirming my satisfaction with the company. No doubt the price lowering is due to increased online competition such as from Blockbuster. Blockbuster, faced with a surfeit of brick-and-mortar stores in an increasingly online world, has been clawing desperately for online market share to keep its head above water.

The price drop is a public relations maneuver more than anything else. For example, the 3-movies-at-a-time deal went from $17.99/month to $16.99/month, which is hardly a reason to switch services. The big news, however, is that Netflix has been moving towards delivering online content for quite awhile now and is testing the waters with (in my subscription) 17 hours/month of free online movies. Netflix, in a well-played maneuver, used the price lowering notice to inform subscribers of the new service. Subscribers to the regular Netflix service can choose from over 4,000 movies and television episodes with Netflix’s “Watch Instantly” service.

Regardless of the reasons, though, Netflix has lowered its subscription prices and now offers free online content to subscribers, which is good news for the frugal consumer. Over the next couple days, I’ll kick the tires,  fire it up, take it for a spin around the block, and let you know how it performs.