WHEN WE WATCH advertisements, we tend to think of ourselves as stationary, with the marketers coming to us and then, if we don’t respond, heading elsewhere. Like an Einstein relativity paradox, however, we observers are also in motion, being coaxed toward the marketer, often without knowing it. A good business knows its customer niche—and good marketers know how to speak to that niche. Customer niches are defined by demographic attributes. When I discuss these attributes with students, I bring up King Arthur’s quest for the Holy Grail. But in this case, marketers are seeking their product’s GRAIL: gender, race or ethnicity, age, income and lifestyle. Not every product pitch is delineated based on all five categories. Toothpaste is not marketed by race or ethnicity. Some distinctions are artificial. Yogurt is equally healthy for men and women, but it’s mostly pitched to women. To the extent that a product-pusher can say, “this is perfect for you,” potential customers respond positively. Take money management. It’s potentially beneficial to all demographics. You might assume that the pitch for such services would mainly be a logical one that emphasizes, “We can grow your money.” TD Ameritrade—or TD to its friends—is a big marketer of such services. Of late, it’s produced a series of ads called “The Green Room.” The ads are shot in a largely green setting, a comforting color that no doubt evokes wealth. An advisor cum therapist talks to people in a semi-casual way about their aspirations and what TD can do to help. The label “Green Room” also evokes the name given to a studio prep room, where guests ready themselves for the big show. The customers in the ads are surrogates for the real customers viewing the ads at home. In pursuit of the GRAIL, TD strives to have actors of different race and gender. Age tends be older. This makes sense, since the topic is typically preparing for retirement. Income is skewed higher, as TD’s services are geared toward those who have the luxury of socking away extra money. The most noticeable marketing sleight of hand regards lifestyle. By making a series of ads with similar but slightly different appeals, TD can speak to the: Technical numbers person Sports analogy guy Non-detailed person Transitioning empty-nesters Go-getting young professional The changes in the actual sales pitch—what TD can do for each type of person—are accentuated by subtle changes in the setting. The non-detailed person’s background is dominated by photos and a large picture of a bull fighting a bear, while the tech person and sports analogy guy are surrounded by graphs. Most casually drink coffee from mugs, but the young professional’s ad has an obvious espresso machine. It’s all designed to have you, the potential viewer, place yourself on the green couch with the person you most identify with. My goal here isn’t to single out TD Ameritrade. Other financial firms do something similar with their advertisements. What’s the overriding goal of such ads? TD and other financial firms may be selling rational money management. But their ads are working a different angle. As the viewer, your brain may be musing about money. But your heart is thinking, “That’s me.” Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. His previous articles include Bored Games, Shame on Us and Under Attack. Jim’s book series on teaching behavioral economics and media literacy,  Media, Marketing, and Me, is being published in 2019. Jim lives in Granada, Spain, with his wife and fellow HumbleDollar contributor, Jiab. Together, they write a blog on retirement, finance and living abroad at YourThirdLife.com. [xyz-ihs snippet="Donate"]

ONE SUNDAY, MY SON was lamenting that he had a school project due the next day, but hadn’t yet taken any steps to get it done. When I asked what his plan was, he replied, “I could use a really good montage right about now.” For those who aren’t procrastinating teens with a father who delves into media literacy, a montage is a series of quick shots in a TV show or movie that accelerates time around a theme—that theme often being the effort and time expended to achieve a goal. Think of the athlete training for the big event, the artist trying to create, the business group trying to formulate a project, or even a building slowly going up. One sees the passage of time condensed on screen, perhaps with a brief stumble or glint of frustration along the way. But in the end, there’s the assured and ultimate victory. Such shows always detail the end result, but the long road to success seems summarized. Why is it truncated? You know why. It’s boring. It’s tedious. It’s often discouraging. Most of the time, those on the journey have no assurance of where the road will end. But that’s life. Think of the things you enjoy right now. A good relationship with a wonderful partner? It wasn’t built in a moment’s stare into each other’s eyes, but rather from working through issues, everything from easy ones about the kids to tough ones about the best way to load the dishwasher. Most people who visit sites like HumbleDollar are already attentive to financial issues. But what are the messages that movies and TV shows give to the average money handler? Wealth is often suddenly and fortuitously thrust upon someone. Saving is shown in a quick montage, starting with a few cents in the piggy bank and then—poof—the couple have the money they need. Spending for today is shown as rewarding and yet later there’s almost never a financial reckoning. To be sure, no single depiction will cause a viewer to become a spendthrift. But just as stalagmites are slowly formed by constant dripping, so too are our attitudes about money. There are many factors at play, but movies and TV shows aren’t helping. As a media literacy geek, I could demand that entertainment be more financially realistic. But—speaking of being realistic—people want to see the fun parts of life. It’s why few documentaries are blockbusters. How can we nudge ourselves along the long, uneven path of saving and delayed gratification? Perhaps we should treat our financial life like a movie, especially when we’re at that fork in the road where there’s a choice to spend or save: We hear a Rocky-like theme song as we delay spending’s immediate pleasure and instead struggle to keep the money in our wallets. Alternatively, we could have a general theme song to our life that reinforces the notion that everything is part of a long-term plan. My choice is Green Onions. We could imagine an audience is watching us as we make that spend or save decision. In fact, there may really be an audience—consisting of our children, whose money habits will be influenced by what they see. We have a cutaway “stumble” scene in our montage where we spend too much. Then we shake our heads, pick ourselves up and get back on the savings path. It’s also important to leave room for a sequel. We achieve our short-term savings goal, so we climb the stairs and raise our arms in victory. There will, however, be other, greater challenges ahead. We might even be laid low and have to struggle to reclaim our earlier victory. But we will prevail. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. His previous articles include Changeup Pitch, Bored Games and Shame on Us. Jim’s three-book series on teaching behavioral economics and media literacy,  Media, Marketing, and Me, is being published in 2019. Jim lives in Granada, Spain, with his wife and fellow HumbleDollar contributor, Jiab. Together, they write a blog on retirement, finance and living abroad at YourThirdLife.com. [xyz-ihs snippet="Donate"]

PSYCHOLOGISTS and biologists call it a supernormal stimulus response. Basically, organisms evolve in the direction of what’s good for them. There doesn’t seem to be an off switch to this instinct, however, so organisms can pursue these “good things” even to their detriment. For instance, field researchers have shown that birds instinctually drawn to colorful eggs will roost on more colorful fake eggs—and ignore their own. And, no, humans aren’t immune to such mistakes. Sunlight is good for us, but many know the pain of sunning to the point of sunburn. Advertisers know we have basic urges for sugar, salt and sex. They use these urges to nudge us to consume, say, sugary foods and salty snacks. Instinct can push us to crave more abstract things, too, that are higher on Maslow's hierarchy of needs. Financially, we can be nudged to go further than a healthy budget would allow. Our rush for a secure home can cause us to overspend. Biology and aesthetics say we desire a fit, attractive partner. But many cried “too far” at Peloton's sexist Christmas advertisement a couple of years ago. There’s also that strong desire to be viewed as “successful.” How that looks is ever-changing, but in a material world it almost always comes down to money and goods. We go into debt to be alpha peacocks, taking out huge mortgages so we can show the world an ever-bigger nest. On the road to success, we’re all accelerator and no brake. Even those who don’t crash aren’t “winners” because there is no finish line to this race, just the next urge to spend. If we don’t seem to have a natural off switch to our instinctual desires for more, can we create artificial ones? Even if we can't train ourselves to stop throwing good money after bad, could we at least stop ourselves from throwing away too much good money? Some people can simply say “enough stuff,” which just happens to be the name of a book I wrote, and walk away. On their daily calendar, many make notes to “do” or “don’t do” some things. Others need more tangible visual reminders—such as a sign in front of their computer that asks if the time, fees and frustration of all their portfolio manipulation is really worth the possible extra return. One friend has a small yin-yang symbol tattooed on his wrist to remind him to pause before acting. It’s a long story, but two weeks ago was a really bad time for our family. My stimulus response in such circumstances is to jump into action. I was doing everything—and nothing—all at once to try to fix the situation. This usually works, but this time it was like spinning the wheels of a car trapped in mud. My escape strategy was just digging a bigger hole, especially mentally. As luck would have it, I had to immediately travel to Thailand for in-law matters. Separated by time differences—and an unreliable internet connection—I was forced to quell my instinct to do things and just, well, ruminate. I thought, I mourned, I reflected. I was less active in trying to make things better, and that was a better resolution for me.

APRIL IS FINANCIAL Literacy Month. If that doesn’t excite you, imagine how your children feel. Still, consider this an opportunity to begin or reinforce your kids’ financial education. Many of my students told me one of their parents was into “finance,” but when I asked how the parent handled the family money, students would just shrug and say that was all they knew. Children don’t like a straight-up lesson, especially from a parent. The trick is to make it seem casual and as blended into everyday life—theirs, not yours—as possible. Here are nine ideas for a wide range of ages, from elementary to high school. Choose the ones that fit your scion: When shopping, compare two items, like two shirts with different prices. Ask your child why the more expensive shirt costs more. What do you get for the extra money—and is it worth it? Even better, have your child ask the sales clerk. Ask your know-it-all tech-savvy child to help you set up some money management software. You can then have your child help you “test” the software with one of your child’s accounts, whether it’s a college fund, credit card or bank account. You might monitor the account together for a couple of months to see how the software works, and maybe have a conversation or two about financial issues along the way. If you have a 529 or other college savings plan, include your child in monitoring its growth and how the balance compares to the current cost of college. Maybe have some strategy sessions on how to pay for college, which might involve looking at U.S. News & World Report's list of best value schools. Take a look at some mutual funds or individual stocks related to your child’s interests, which could be anything from fashion to sports to environmental sustainability. Make predictions about what will happen if, say, a new product is rolling out, and then check back a month later. Talk about why you were right or wrong, and what are good business strategies. Put some creativity into a family budget challenge. Pick a family event, like a vacation or outing, and figure out how it can be done in a less-expensive fashion. Incentivize creativity by splitting the savings with your child, or using a part of it for an extra activity. Ice cream is good. Delaying gratification is an important skill. Small children’s abilities can be tested—and then discussed with them—using the marshmallow experiment. For older kids, have them set a goal of buying something they want later, say at the end of the year. Then promise to match a percentage of the money the child earns or saves toward the purchase. Make a thermometer chart to keep track. If older children want money for something, ask them to make a presentation, similar to a business seeking a grant. Have them lay out the costs and benefits of getting the money, and then question them about their presentation. Budget a fixed amount for an event, anything from your child’s birthday to planning a “night in Italy” family dinner. Then have your child figure out how to allocate funds to make it the best experience. Whatever your child decides, that goes, assuming it fits within the budget. Don’t come to the rescue if your kid messes up. Spending habits are formed from a lifetime of nudges, so help your children become savvy consumers of media. Watch media your children like, asking them to explain the nudges and overt demands of consumerism they see—from product placement, to banner ads scrolling below the video, to open solicitations. Point out the slyer methods of persuasion or even make a hunt for them. Reassure your children that they’re too smart to fall for these tricks. In the comment section below, feel free to suggest other activities. Do you include your child in buying decisions? Do you try to model smart spending? Responsible money habits aren’t something you tell your children about or, worse still, do for them. Instead, they’re built over time by the things you and your children do all year round and, most important, do together. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He's the author of a three-book series on how to teach elementary, middle and high school students about behavioral economics and media literacy. He's also authored several educational children's books. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. Together, they're currently working on a book, “Your Third Life: Reflections on Finding Our Way by Taking the Long Route.” Check out Jim's earlier articles. [xyz-ihs snippet="Donate"]

I'VE BEEN AWAY FROM the HumbleDollar community for a while. Jiab and I are working on a new book about media literacy, examining the effects of social media influencers on youth consumerism. It will teach kids about responsible web use and how to avoid the traps of the online world. I’ve learned a lot myself, including lessons that apply both online and IRL, short for “in real life.” As part of our research, one of the seedier, more adult corners of the internet I’ve explored is the scam solicitations that come to just about every user of social media. All platforms have their cyber-pirates hunting for vulnerable prey. Let me recount my encounters on Instagram as representative of the type. Most scammers begin with an innocuous hello and some questions about my location and job. I usually say I’m in Atlanta—rather than my real Texas home—just to obscure the trail a bit. The profiles almost always seem to show photos of provocative young women. A Google image search shows that the same pictures are used in a variety of accounts. After the intros comes the flattery. When asked for a pic, I send one of a famous actor about my age. This often elicits, “You’re so hot, I want to party with you.” Then comes the pitch, such as asking for gas money so she can come to my house. Some tell me they’re multi-millionaires who want to share their good fortune by giving me money. As a teacher, I’m both amused and a bit irked that these scammers don’t do better homework preparation: A woman in Los Angeles told me she could drive to my Atlanta home “in just a couple of hours” if I spotted her gas money. A Phoenix woman confirmed that she saw September’s surprise snowfall there, telling me it was beautiful. The surprise is it hasn’t snowed there in decades. When I told one inquirer that I lived in Atlanta, Georgia, she enthusiastically said she was nearby in Batumi—a city located in the Republic of Georgia. All this is amusing until you consider that people really are taken in by these scams. The Federal Trade Commission said consumers reported $770 million in social-media-originated fraud losses to the agency in 2021. Bear in mind that’s what was reported. The FTC estimates that only about 5% of fraud victims report the matter to a government agency, often because of embarrassment. Scammers succeed because they know our three vulnerabilities: We let emotion get ahead of rational thought. Scammers try to catch people in a weak moment. Most people won’t respond to flattery or attention out of the blue. But it’s a numbers game. Somewhere out there are lonely people for whom kind words and compliments make them lower their guard. Some victims have been lured into sending intimate pictures and videos later used to blackmail them. Desperation and worry over debts can silence our brain’s warnings that the “can’t-lose'' money opportunity is a trap. An online “financial advisor” lists tips for when you’re behind on the rent. Several include playing online games that “pay” you—but also encourage you to pay them to increase your odds of winning. [xyz-ihs snippet="Mobile-Subscribe"] Many online brokerage firms are nothing more than investment platforms controlled by scammers. A victim’s account seems to show positive earnings at first, but that’s just to get the victim to increase his or her investment before it’s all pulled out. Other times, goods privately sold online go undelivered. It remains a rule that if a deal appears too good to be true, it probably is. We forget that information is the key that opens the vaults. I have been told that I’m owed money or that a generous person wants to give me some. I just need to share my PayPal, Venmo or other electronic payment information so the deposit can be made. People who have done so find themselves locked out of their account or with money withdrawn. Sometimes there’s not much gone, so the account holder doesn’t notice, but small sums are subtracted regularly. A fake lottery winner sent me “her” information sheet to fill out, so she could share some of her newfound wealth with me. The form was clearly copied from the internet, still bearing the Publishers Clearing House watermark. Had I sent it in, my identity and all my account information would have been in the hands of a scammer. We can be tricked into lowering our guard. Clicking links sent to us by people we don’t know—and even people we do—is like going down a dark alley. A phishing link or SMiShing text can open up your computer to being attacked by malware, your data stolen or your computer held for ransom. Beware of emails purportedly from major companies such as Amazon, Apple and Facebook. Real companies never directly email you to ask for your account information. Upon examination, you may notice a slight misspelling or other problems with the sending email address that'll be a clue it’s not from the actual company. These scams use the same sales techniques employed in real life—by door-to-door salesmen or phone solicitors—just adapted for the internet. Scammers gain false trust, get marks to lower their guard and then take advantage. Online may be a new world to many. But as explorers warned long ago on the maps they created, here there be monsters. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He's the author of a three-book series on how to teach elementary, middle and high school students about behavioral economics and media literacy. He's also authored several educational children's books. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. They have a book that examines the impact of social media influencers on youth consumerism and identity development coming out in 2023. Check out Jim's earlier articles. [xyz-ihs snippet="Donate"]

LET’S SAY YOU COME into some extra money. Do you take the family on a great vacation or do you remodel that room you try to stop guests from seeing? To come to a decision, you might weigh the fun of the vacation against the pride of the redone room. It’s at this point that some intrepid economist, risking his or her life-of-the-party reputation, would pop up and say, “You’re not doing it right.” Economics is the study of choice—and the big engine for choosing is cost-benefit analysis. That’s what most people will tell you they do. In the above example, however, the economist would point out that the decision-maker is only really comparing the benefits of choice A and choice B, while ignoring the costs. For instance, the cost of a vacation might include: The time to agree on—and plan for—the vacation A family expectation that henceforth all vacations will be grand Lingering regret every time you pass the not redone room, amplified by the look and sigh of your spouse Meanwhile, the room remodeling might bring these costs: Bored kids Money and effort invested in something that will be taken for granted a week after the “wows” have died out The feeling that redoing one room means having to redo another… and another… It’s tricky to thoroughly balance out the costs and benefits of a decision, in part because the weight of each factor is totally subjective and personal. When I teach this to kids, I use a more student-oriented choice, such as deciding between watching TV and studying. First, we list the benefits of each choice, simplistically valuing each benefit as +1 if the benefit is liked and +2 if the benefit is liked a lot. Benefit of doing schoolwork: Better grade +1 Parents happy +2 Helps with next lesson +2 Total benefit +5 Benefit of watching TV show: Entertainment +2 Can talk about show with friends +2 Helps me to be cool +2 Total benefit +6 With the TV show at +6 and schoolwork at +5, it would seem the show wins. But this is only half the job. It’s only a benefit-benefit comparison. To do a cost-benefit analysis, the student must now list the costs of doing each and mark them as -1 (bad) and -2 (really bad). Cost of doing schoolwork: Missing show -1 Spoiler may be given away by friend -2 Need time later to catch up on show -1 Total cost -4 Cost of watching TV show: Parents disappointed -2 Parents ban TV watching -2 Behind other students -1 Give up weekend to study -2 Total cost -7 How does this all net out? The total cost-benefit score of doing schoolwork comes to +1, once you subtract the -4 cost from the +5 benefit. Meanwhile, the net score of choosing the TV show is -1, once the -7 cost is subtracted from the +6 benefit. Lo and behold, once you factor in the potential negative consequences, choosing to study has a higher value than watching TV, so it’s probably the better choice. Did you really expect anything different from a teacher? In weighing two choices, what we’re actually weighing are the consequences of our choices. To be sure, in the above simplistic model, the probability of each consequence isn’t measured. Still, the principle remains: All choices have consequences and, to the extent we know them in advance, we should consider those consequences. Usually, we simply do this sort of analysis in our head. The question is, are we thoroughly considering costs and benefits when making a choice? If we aren’t sure we’re being thorough—and it’s a big decision—we may want to list the pros and cons, and then assign formal numbers to each. It often doesn’t take long. We could probably get it done during the TV show’s next commercial break. Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. His previous articles include Scenes From a Life, Changeup Pitch and Bored Games. Jim’s books on teaching behavioral economics and media literacy,  Media, Marketing, and Me, is being published in 2019. Jim lives in Granada, Spain, with his wife and fellow HumbleDollar contributor, Jiab. Together, they write a blog on retirement, finance and living abroad at YourThirdLife.com. [xyz-ihs snippet="Donate"]