A fun comic about seashells and Bayes' Theorem. http://xkcd.com/1236/

A new Mr. Money Mustache article for those who enjoyed my sequence on financial planning and extreme early retirement.

When the Back of the Napkin can be Worth Millions

The past few days have seen an increase of chatter concerning retirement and financial planning. One of us is even putting out a prospectus for a rational financial planning sequence. Some others have derided the concept of saving for retirement, as there is a probability of death before that time.

I am of the Extreme Early Retirement group. The idea is to save and invest 60-90% of your income, and you will have enough money to retire within a decade rather than four decades of the normal working career. This requires you to exercise your frugality muscle (such as cutting cable, biking to work, eating out less), but due to hedonistic adaptation, you will come out no less unhappy.

The sequences have already spoken on how spending money does not make us happier (after our basic needs are met). A Rational Financial plan should take this into account, even if a majority of people would not want to consider it.

I am just a beginner, so I linked the two big names in EEA, Mr. Money Mustache and Early Retirement Extreme. You can find their journeys towards financial independence here and here.

ERE is an austerity heavyweight, while MMM lives a pretty luxurious lifestyle, but still spends much less than his former coworkers. He just spends on what is important to him, such as travelling with his family and eating organic food, and not on anything frivolous, such as cable or eating out. He lives very far from a deprived lifestyle which the average person would shy away from. It takes a paradigm shift and some grit, but the people of LessWrong are not the type to reject munchkin ideas because it takes a little bit of mental effort.

If I were to make a compilation of posts for a Rational Financial Planning sequence, it will go as such…

How Little Money you need to Retire ?
Basic Retirement Math
Rationalist Spending 
Maximizing Utilons per Dollar
Utilons Free Of Charge
Investing Rationally Basics

These are just the basics. Investment advice is scare, and the above does not talk about many fianacial aspects, such as insurance, children, career choice. The authors do speak about them on their blog’s, but I omitted them for brevity. Read and follow these posts however, and you will be better off than 90% of your peers, and well on the road to Extreme Early Retirement.

[Edit] This idea of cutting your expenses and maximizing your savings obviously do not apply only to early retirement. Other financial goals, such as saving for a house, building up capital for a business, or giving more money to charity all will be more quickly accomplished if you learn to cut excesses from your life. The driving idea is the cost to live is very small, you are not made any happier by spending money on the extras, and you should put this money where it matters to you the most.

Petruchio

As a teacher, I wonder if it is possible to instill this skill into students the skills of rationality and critical thinking. I teach the third grade, and it is not immediately apparent how to apply this with my own class.

The problems I foresee are as follows:

• Young children often do not know the basics on the subject which they are learning, be it math, science, art, religion, literature etc.
• Many children are very shy, and try to give as short of an answer as doable to a verbal prompt.
• Written prompts are arduous, straining the attention span and writing capabilities of the students. This is not a bad thing, but it presents difficulties in the economy of time and material to be presented.
• Attention spans in general are very short.
• Experiments can be very infrequent, and nigh impossible with certain subjects.
• Children, at this age, are likely to take the words of a parent or teacher at face value, and naturally parrot it back. This may be a hard habit to break.

In the sequences, it is suggested teachers should drill into students words don't count, only anticipation-controllers. How practical is this for an elementary school level? Also appreciated would be any ideas or experiences on how to do this, or how to combat the above problems. Hearing from other teachers would be excellent especially.