volta

Your income has a shape. Most people never check which one.

[volta @OxVolta]

@credomecredo thanks bro

[volta @OxVolta]

Warren Buffett paid more than $55 million for control of a furniture company without an audit.

The contract was one page.

Six years later, its 95-year-old founder walked out and opened a rival business across the street.

Her name was Rose Blumkin.

She arrived in America from Belarus in 1917. No formal education. No English. She learned the language from her daughter.

In 1937, she borrowed $500 from her brother and opened Nebraska Furniture Mart in the basement of her husband's shop in Omaha.

Her rule was simple. Sell cheap and tell the truth.

When manufacturers refused to sell to her for underpricing established retailers, she drove to Kansas City, Chicago, and New York. Bought furniture at full retail from department stores. Brought it back to Omaha. And still sold it cheaper than anyone in town.

By 1983, one Omaha location was generating more than $100 million in annual sales.

Buffett had watched that record for years. On August 30 of that year, his 53rd birthday, he made the cash offer. Mrs. B was 89.

Mrs. B gave Buffett her word. He wrote the check.

The footage attached to this post captures the acquisition as it happened.

Mrs. B remained chairman. Her son Louie and grandsons Ron and Irv continued managing Nebraska Furniture Mart with her.

In 1989, at 95, she felt frozen out as her grandsons took more control of the business.

Three months later, she opened Mrs. B's Clearance and Factory Outlet directly opposite Nebraska Furniture Mart.

Buffett never put a non-compete clause in the original deal.

Mrs. B had not broken her word. No agreement prevented her from leaving or competing.

In 1992, at 99, Berkshire bought her rival business and merged it back into Nebraska Furniture Mart. This time, she signed a non-compete agreement.

She worked until 103. Died at 104.

Trust closed the first deal. The missing clause brought Buffett back for the second.

[Diablo @diablomediablo]

https://t.co/x7GeZRYZf0

[volta @OxVolta]

@diablomediablo glad it resonated man

[volta @OxVolta]

@diablomediablo one rejection can change the whole direction of your life

[volta @OxVolta]

@HeroOkMan exactly, asking for more feels harder than skipping coffee

[volta @OxVolta]

Ramit Sethi grew up eating out once every six weeks, only with a coupon. Now he tells people to stop saving on coffee.

At Stanford, he watched friends overdraft their accounts while following the same advice: budget harder, cut the lattes, track every dollar.

Nobody kept doing it.

Sethi thought the advice was aimed at the wrong number.

A latte is a $3 decision. Negotiating your salary, automating investments, and choosing where to live can change your life by tens of thousands of dollars.

Most people spend their financial lives optimizing the $3 and ignoring the $30,000.

So he built a system around one move. Automate investments just after payday. Cover fixed costs. Spend what remains without turning every coffee into a moral test.

That is the mechanism. Money for the future leaves before willpower has a chance to lose.

His book became a New York Times bestseller. Netflix later built a series around the idea.

The latte was never the problem. The decisions behind it were.

[volta @OxVolta]

https://t.co/fzsinAMdUm

[volta @OxVolta]

@xwhynoted fees are the one thing you know for sure you will pay

[volta @OxVolta]

@kardinall the gap between a cool demo and reliable work is still huge

[volta @OxVolta]

@denon_opg exactly, the big numbers take time but the small ones are right in front of you

[volta @OxVolta]

@Mi_Zu_Ki_20 yes

[volta @OxVolta]

@Pixel_Neuron that’s the part most people overlook

[volta @OxVolta]

Pete Adeney retired at 30 on a $67,000 salary. In a flannel shirt, he showed one chart that told most of the audience they had 40 more years left.

Adeney is a software engineer from Canada who moved to Longmont, Colorado. He and his wife both earned around $67,000 a year. Combined household income of roughly $134,000. Not a fortune. Not a startup exit. Two middle-class paychecks from two office jobs.

They started in 1997 with nothing. By 2005, nine years later, they were done. $600,000 in index funds. A paid-off house worth $200,000. Both walked out of their jobs at 30.

The mechanism was one number. They saved 66% of everything they earned. Not 10%. Not 20%. Two thirds.

Their annual spending was $24,000 for a family of three. That is less than what many people spend on a car payment and insurance alone.

Then Adeney pulled up the slide that silenced the room. It was titled "How Long Is Your Prison Sentence?" The horizontal axis was savings rate. The vertical axis was years until retirement. At 10%, the bar stretched past 50 years. At 20%, it dropped to 37. At 50%, it was 17. At 66%, the math returned a single digit.

He crossed out "huge income." He crossed out "fancy genius investing." The only thing left with a green checkmark was five words. Spend much less than you earn.

The FIRE model behind it uses a simple guideline. Take your annual spending, multiply by 25. That gives an approximate target, assuming a 4% annual withdrawal and a long enough time horizon. A $24,000 spender needs roughly $600,000. A $100,000 spender needs $2.5 million. The lower your spending, the smaller the target and the faster you reach it. Savings rate pushes from both sides at once.

Adeney rode a bicycle to the talk. He built his own kitchen. He has not owned a new car in decades. He put one line on the screen: "Any money you spend that does not make you happier is wasted."

After retiring, he started a blog called Mr. Money Mustache. It became one of the most read personal finance sites on the internet. The New Yorker profiled him. PBS followed him around Longmont with cameras. He became the central figure of the FIRE movement. Financial Independence, Retire Early.

By 2017 the blog was generating $400,000 a year. More than he and his wife ever earned combined. He did not need any of it. The man who retired on $24,000 a year accidentally built a media business worth six times his old salary by writing about not needing money.

He still lives in Longmont. He still rides the bicycle. He still spends around $25,000 a year. The blog money goes into the same index funds. The lifestyle never changed because the lifestyle was the point.

Most people earn more every year and need more every year. Adeney earned more every year and kept needing the same amount. That gap did not just build his portfolio. It shortened the life his portfolio had to fund.

[volta @OxVolta]

https://t.co/fzsinAMdUm

[volta @OxVolta]

@0xSpivach exactly, simple but not easy

[volta @OxVolta]

@lorneseth that’s real discipline honestly

[volta @OxVolta]

@gridbreak_ he just refused to settle for it

[volta @OxVolta]

@limalemonnn still spends 25k while making 400k respect

[volta @OxVolta]

@limalemonnn I agree 100%, jealousy is a very bad thing

[volta @OxVolta]

@lorneseth It’s not about discipline. It’s about taking yourself out of the decision-making. Otherwise, it’s just “starting next month” again

[volta @OxVolta]

A UCLA professor raised 15 million Americans' savings rate from 3.5% to 13.6%. He never asked them to save a single dollar today.

His trick was one word: tomorrow.

Shlomo Benartzi stood on the TED stage and opened with a question. If I offer you a banana or chocolate for next week, what do you pick? 74% pick the banana. Healthy. Responsible. Smart.

Now what if I offer you a banana or chocolate right now?

70% pick the chocolate.

Same brain. Same person. Same choice. Different answer. Because next week you are a hero. Today you are a human.

That gap between who you plan to be and who you actually are is the reason you are not saving enough. Not discipline. Not income. Not knowledge. The gap.

Benartzi knew this. He is a behavioral economist at UCLA who spent 15 years studying why people fail with money. Not why they are stupid. Why they are human. And humans have one consistent flaw: we cannot sacrifice now for later. We know we should. We plan to. We swear we will start next month. And next month we pick the chocolate again.

So he stopped asking people to save today.

He built a program with Nobel laureate Richard Thaler called Save More Tomorrow. The idea was almost insultingly simple. Instead of asking employees to save more right now, he asked them to commit to saving more with their next raise. Not today. Tomorrow.

You earn $5,000 a month and save 3%. Fine. Keep spending exactly what you spend. But the next time you get a raise, half of it goes to savings automatically. You never see it. You never touch it. You never feel the loss.

The results broke everything behavioral economists thought they knew.

Savings rates went from 3.5% to 13.6%. Nearly four times higher. Not because people earned more. Not because they learned more. Because someone finally designed a system that worked with human nature instead of against it.

Then he showed the slide that made the room go quiet.

Germany and Austria. Same culture. Same continent. Same values. Germany: 12% organ donors. Austria: 99%. The difference? In Germany, you have to opt in. In Austria, you have to opt out.

The default wins. Every time. In every domain. Organ donation. Retirement savings. Your spending habits. Whatever the default is, that is what you will do. And right now, your default is to spend everything that hits your account.

That is why willpower fails. That is why budgets fail. That is why "I'll start saving next month" has a 100% failure rate across 300 months. You are fighting the default. And the default always wins.

Benartzi did not fight it. He changed it.

Save More Tomorrow is now used by the majority of large retirement plans in the United States. It has been written into the Pension Protection Act of 2006. 15 million Americans are saving more because of one behavioral insight: do not ask people to change today. Ask them to change tomorrow, and automate it so they never have to decide again.

The most powerful financial advice on earth is not "save more." It is "set up a system where saving happens without you."

One automated transfer. One decision. Made once. That is it. That is the whole program that changed 15 million lives.

You already know you should save more. You have known for years. And you have not done it. Not because you are lazy. Because you are human. And humans pick the chocolate every single time.

Stop asking yourself to pick the banana. Set up the transfer and take yourself out of the equation.

[volta @OxVolta]

https://t.co/fzsinAMdUm

[volta @OxVolta]

@diablomediablo Over 3–4 years the savings rate rose from 3.5% to 13.6% and stayed high, because people rarely left the setup once it was in place

[volta @OxVolta]

@andra_volya after the ted talk nothing burned out. it's been in the law for 20 years, auto-escalation is still in a bunch of retirement plans. people just don't notice they're saving more