New Year's Substitutions

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Well, it’s
that time of the year again. All over America, smart people are
sending out last-minute charity donation checks to get their income
tax deductions for 2003, making sure they get stamped, dated receipts
from the Postal Service (this costs an extra 37 cents).

Other smart
people are making last-minute sales decisions on investments that
did well, offsetting the capital gains tax by selling investments
that did poorly.

But most
people aren’t this smart. They are spending their time looking
forward to New Year’s Eve parties and the bowl games (husbands,
anyway) on New Year’s Day. College football teams that nobody
outside of the home town paid any attention to three months ago
will fight it out for mythical second through tenth place, which
will entitle them to be forgotten by January 2nd. One
team will wind up number one. The public will remember which one
until at least Super Bowl XXXVIII, just as they remember the winners
of Super Bowls past: Packers, NFC (I), Packers, NFC (II), Jets,
AFC (III: Joe Namath > Earl Morrall/Johnny Unitas) . . . ?

Then there
are the New Year’s resolutions. All over the world, not just in
America, people will make New Year’s resolutions, as surely as
women’s magazines at supermarket check-out counters will feature
diets in the January issue.

All of the
celebrating on New Year’s Eve, plus all of the hangovers on New
Year’s Day, will produce sufficient guilt, worldwide, so that
hundreds of millions of people will say on New Year’s Day, "Not
in 2004. This year will be different."

Will it?
Really? I hope so, because 2003 was surely no winner.

My wife asked
me, "Will we celebrate New Year’s in the usual way? In bed
by 10 p.m. on New Year’s Eve, and then you write an article on
New Year’s Day?" Yep.

die hard at my house.

What about
at your house?


A New Year’s
resolution is like an extra 20 lbs. of stuff in your backpack,
assuming that you own a backpack. It’s an extra burden that you
resolve to carry across the desert, only to toss out the extra
weight, plus another 5 lbs. of stuff, half way to the first water

Why do you
want to carry all that extra weight in your backpack? What do
you expect to gain? Is your expected gain worth the guaranteed
expense? Jesus said:

For which
of you, intending to build a tower, sitteth not down first,
and counteth the cost, whether he have sufficient to finish
it? Lest haply [it happen], after he hath laid the foundation,
and is not able to finish it, all that behold it begin to mock
him, Saying, This man began to build, and was not able to finish
(Luke 14:28—30).

Maybe the
expected gain really is worth the extra effort. But why does it
take the New Year to persuade you to pay the price? Why not resolve
today, before the sun goes down? Or on January 3rd?
Is there something special about New Year’s Eve/Day? Yes, actually,
there is. People’s behavior changes. As to why, nobody knows.
It’s tradition.

die hard — a lot slower than people’s resolve does. By February
1, the cost of keeping resolutions is always up by 20%. By June,
it’s up by 50%. The expected gain is delayed; the cost keeps rising.
The trail of abandoned resolutions look like the Oregon Trail
in Wyoming in 1849: discarded items everywhere.

The guilt
of abandoning a resolution adds to the overall burden. So, on
the following December 31, millions of people say, "This
year, things will be different. I’m going to change."

If you need
to change, start changing now. Don’t wait for New Year’s Eve.


I possess
only two marketable skills: the ability to write and the ability
to talk in front of a crowd, no matter how large. I gained the
second skill first, by age 16, at the American Legion’s Boys State
program. So, I know when I have heard a great speech. Let me tell
you about the greatest speech I ever heard.

It was about
25 years ago — maybe a bit longer. I was invited to an open
meeting of Alcoholics Anonymous, to which the sober son of a long-time
AA member had invited me. The speaker, Clancy I., was scheduled
to give his personal testimony. This was a big event for AA in
southern California. Clancy’s speech was legendary in AA circles.
He gave it every year just before Christmas.

He told of
years he had spent drinking. Christmas was the worst time of the
year for him. He would look forward to Christmas. It would always
disappoint him. Then he would go on a bender. The pattern never
changed. One year, he woke up after the New Year in a town a thousand
miles away. He could not recall how he got there.

He ended
his speech with this warning to a room full of AA members: "Don’t
get your hopes up about Christmas. So, I want to wish you a merry
July 16, or maybe August 12."

My recommendation
about New Year’s Day is the same. Happy March 23rd.


When you
are motivated to make a change in your life, don’t ignore it.
That’s why I’m not opposed to using the New Year as a time to
think about where you’re headed and what it’s costing you. After
all, AA always scheduled Clancy’s speech for the pre-Christmas
season. But I am not in favor of adding to your burden, net. The
risk is too great that you will quit before 2004 is half gone.

That’s why
I recommend New Year’s substitutions over resolutions. Don’t add
a burden to your schedule, your budget, or your family. Get rid
of something you really don’t need to offset any addition.

If you think
you should devote more time to improving your job skills —
a wise decision — cut out some television time. The average
American household now watches over seven hours of TV a day. If
you can cut back by one hour a night, you can add an hour to your
self-improvement program.

Look at the
weekly TV schedule. Get a copy of "TV Guide" or the
weekly TV schedule that runs in the Sunday newspaper. Go through
it and mark the shows that you regularly watch. Circle each show.
Then decide: Which ones are expendable?

If your TV
addiction is really bad, think about recording the marginal shows
through the week, and then watching them all on Sunday as rest
& recreation. You can speed through the ads, too. You may
find that the shows really aren’t worth recording.

Years ago,
I saw a "Mr. Tweedy" cartoon in my local newspaper.
Mr. Tweedy was a loser. Some guest had just opened a closet in
Mr. Tweedy’s house. There, stacked to the ceiling, were videocassettes
of "Bowling for Dollars."

I decided
three decades ago that I would cut back on TV viewing. I had not
owned a TV for two years. Then, having moved to a new city, I
bought one. My wife and I were starting a newsletter business.
We needed extra time. So, we decided to donate 25 cents to charity
for each half hour of TV we watched, excluding the evening news
or a documentary. That money would be worth $1 today. By the end
of the week, we found that the only shows that were consistently
worth 25 cents to us were "The Mary Tyler Moore Show"
and "The Bob Newhart Show." I paid for Mary. She paid
for Bob. That launched our newsletter business, which still exists:
Remnant Review.

As far as
I can tell, TV is the most expensive consumption good in human
history. It eats up our only non-renewable resource: time. Statistically,
I have about as much time as David Rockefeller does. I can’t match
his money, but I can match his time. So can you.

So, I suggest
that you start making substitutions. Identify your spare time,
meaning wasted time, and put it to productive use. When you iron
clothes, listen to audiotapes. When you mow the lawn, listen to
audiotapes. I don’t mean music. I mean educational tapes that
are related to your work, or investing, or education.

You can download
audio files from the Web, make a CD-ROM of MP3 files, and listen.
There are so many free educational audio files on the Internet
that you cannot possibly not find something worth listening to.

I am always
looking for educational audio files. If you have spotted a web
site that offers useful items, let me know. I’ll share this with

If you know
of a web site that offers a simple system for downloading audio
files and converting them to MP3 files, send me the link. I’ll
share this with readers.

A small MP3
player that runs on batteries costs under $100. That is a capital
investment that can be converted into money or education without
much trouble.

If you need
a music CD or MP3 to get you to exercise, then use CD-ROMS or
tapes of music. However, be aware that for men, aerobics may not
be the best form of exercise. Dr. Al Sears, who writes the Health
Confidential for Men newsletter, recommends strength exercises
over aerobics. Strength exercise takes less time — another


Until you
are clear in your mind about what it is you are trying to accomplish,
you should avoid committing to a New Year’s substitution.

Ask yourself
what you have failed to achieve so far in life that continually
bothers you. Make a list. Hint: try to keep it to one page.

Pick one
item. One is plenty. Then set a date to achieve it. Then estimate
the cost involved. This is my old rule:

What do
you want to achieve?
soon do you want to achieve it?
are you willing to pay to achieve it?

Until all
this is clear in your mind, make yourself no promises.

The goal
is to substitute something that isn’t that important to you in
order to achieve something that is important, but which you have
consistently failed to achieve. You will keep nagging yourself
if you don’t achieve it, or at least try to achieve it. To get
yourself off your back, make a substitution.

If you can
identify a low-value pleasure item to abandon that will free up
sufficient resources to enable you to start working on that unfulfilled
dream, consider making a substitution. Look for a low-benefit
burden to abandon.

Maybe you
really hate to mow the lawn. So hire someone to mow it, but use
the time freed up to work on your project. It costs you extra
money, but maybe money is less of a concern to you than not working
on your long-postponed project.

The people
who attend AA know that their biggest problem is alcohol. The
AA program recommends drinking a milk-shake when the desire to
drink alcohol seems overwhelming. This may lead to a weight gain,
but a weight gain isn’t going to kill most people. The booze will
kill an alcoholic. The milk-shake/booze trade off is wise for
an AA member. It’s a matter of priorities.

The problem
with New Year’s resolutions is that they are spur-of-the-moment
decisions. They are not made by people who have carefully, painstakingly
thought about their priorities. I am recommending that you take
care to think about your priorities for 2004 before you make a
New Year’s resolution. Then make a substitution instead.

Setting your
priorities requires a cost-benefit analysis. You want to achieve
your goal with the least possible expenditure. That’s why I recommend
a self-conscious substitution. When you go looking for things
to give up — costs — you must think about your priorities.
You will be much more likely to make a wise judgment that you
will be able to stick with in 2004.


What things
can you do that are most likely to give you a sense of accomplishment
when you look back a year from now? Here are a few possibilities:

  1. Decrease
    your level of credit card debt by 30%.
  2. Increase
    your savings rate to 5% of your after-tax income… on the way
    to 10% by the end of 2005.
  3. Increase
    your rate of charitable giving to 10% of your pre-tax income.
  4. Lose
    10% of your weight by mid-summer, and keep it off through December
    31, 2004.
  5. Get
    a raise of 5% above price inflation.
  6. Find
    out what your work is worth locally.
  7. Start
    a home business without debt.
  8. Read
    three books related to your career.
  9. Read
    three books on how to avoid retirement.
  10. Enroll
    in a night class at a local college.
  11. Learn
    one new computer-related skill/program.
  12. Join
    a service organization and serve.
  13. Teach
    a beginner something that you know well.
  14. Read
    a [???] For Dummies book and master it.
  15. Set
    up a web site.
  16. Take
    your wife on a vacation she has wanted.
  17. Write
    an article and get it published.
  18. Join

All of them
are good. You can’t do all of them. If you could achieve the first
three, it would constitute something approximating a miracle.


Don’t vow
to do anything on this list or anything not on this list until
you have written down exactly what your goal is AND WHY.

Then, once
you have written down the relevant reasons, pick one goal. Write
down why you picked it over the rest of them. You must write it

Now comes
the difficult part. Write down what your mid-term goals are by
the quarter: April 1, July 1, October 1, December 31. Be specific.

Keep these
four pieces of paper in a file. Get out the file on each due date.
Make some sort of reminder system to check the file. Monitor your
progress. If you did not achieve your mid-term goal, write down
what you must do now to achieve it in the next quarter. Substitute
this new page for the original one.

Writing all
this down is really difficult. Checking back each quarter is even
more difficult. But the act of checking your own schedule quarterly
will help you stick with your program.

The really
diligent person will create a weekly calendar and look at it weekly.
That’s why successful people buy a Day-Timer or a cheap equivalent.
Without doing this, it’s not easy to stick with the program.

Don’t make
a New Year’s substitution if you are not willing to write down
your goals for each quarter. Don’t set yourself up for failure.


If you are
willing to go ahead with this program, get out some paper and
go through the exercise.

  1. Write
    down potential goals and WHY.
  2. Write
    down what you will swap and WHY.
  3. Write
    down the goal(s) selected and WHY.
  4. Write
    down mid-term goals by the quarter.
  5. Create
    a reminder system to check them.

If you are
really determined to succeed, buy a Day-Timer or its equivalent
and write down your weekly steps.

Until it’s
all on paper, don’t promise anything to anyone, especially to

Between now
and midnight, January 1, there is time to do this right. Do it
right or don’t do it at all.

31, 2003

North [send him mail]
is the author of Mises
on Money
. Visit
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