Archive for the ‘ Personal ’ Category

Economics of Being Married & Vacationing

I was talking with Ashley the other day about vacationing. It seemed that everyone around us has, or is, going on vacations all the time. Take for instance my brother Nick. That kid has been everywhere. Not only that, but he travels all the time! He just got back from a trip, with some of his good buddies, to Mexico. Before that, he went on a cruise to Mexico. I am not bad-mouthing it, I am just jealous. Anyways, as Ash and I were talking about vacationing we got stuck on the principle of how to spend money.

My argument was that we spend as little as possible on the hotel, and spend that money elsewhere. Meaning that we would find a comfortable place to put our bags, and depending on the location, spend the money on activities. I think that the fun of the vacation is going places. That is why you left the house in the first place! My ideal hotel would look something like this:

Love Shack

It is not the best looking thing, but you get to spend your money on more things.

Her argument was simple. It was, if you want to have a fun vacation, you better put me in a nice hotel with an awesome pool.

Now honestly her argument is perfectly valid. When you vacation, you are trying to relax. You worked hard, now it’s time to hang out by the pool and enjoy the sun. Her idea of a hotel would be something like this:

Keyword: Dream

Ash's Dream

So this got me thinking, how are Ash’s vacationing preferences, as well as my own, illustrated mathematically? Honestly, I have no idea what the answer is. I just want to jot some ideas down, and see what sort of feedback I can generate.

So to start, I will throw out some parameters that will be needed. They are:

  • Probability of Winning the Lotto [L]
  • Winnings From The Lotto [t]
  • Savings Rate [r]
  • Discount Rate [d]
  • Wages Earned [w(ICON Health & Fitness)]
  • Benefits (money to be spent on vacation) [b(r*w)]
  • Time Frame
    • I will assume for all time before the vacation there will be 40 periods x ϵ [0,40]
    • The vacation will comprise of 5 periods x ϵ [41,45]

And from there, I have can put together (a simple) mathmatical equation.

Ashley’s Present Value of What To Save For The Hotel of Her Dreams = {e^(-dx)*(1-r)*w(ICON)+(L*t)} + {e^(-dx)*b}

You would have to integrate the first part of the binomial from 0 to 40. Likewise integrate the second part from 41 to 45.

Now, you may be asking the question, what does the expected utility for myself look like? It looks like this:

Tyler’s Expected Utility To Save For The Hotel of My Dreams = I DONT CARE, I WANT TO GO ON VACATION!

 

 

2011
04/06
POSTED BY
Tyler Spurlock
CATEGORY
Economics
Personal
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Confessions From Altucher

I wanted to share an article (even though it is just a list) that I read not to long ago. It was written by James Altucher, a managing partner at the hedge fund Formula Capital. He made a list of some confessions he wanted to get of his chest. Honestly, I would never want to do business with this guy.

Read it, and tell me what you thought.

1) I hit one of my cars with the other car. I had a Chrysler Pacifica and a PT Cruiser. I was backing out the Pacifica and I hit the PT Cruiser. Then I was like, “oh shit,” so I wanted to put the Pacifica back in the garage and pretend I was never driving it and that’s when I hit the PT Cruiser again. Then I left the cars alone and went inside. They both were dented almost beyond repair. I pretended as if I had never driven either

2) When I was 17, I found the bank account that contained the money my parents were saving for my college. It had my name on it so every week I went to the bank and withdrew money. Then I went to movies, bought books, clothes, etc until the money ran out.

3) In November of 4th grade I was caught shoplifting in the Kay-Bee Toy & Hobby Shop in Brunswick Square Mall. But I had shoplifted many times before then and had never been caught. If I had not been caught in 4th grade and taught a strong lesson (my mom yelling, “this is going to be on your permanent record!”) I’d probably still be shoplifting. But when my parents asked me if there were other times before this time I said, “no”.

4) I joined a cult in 9th grade. Nobody in my family ever knew. I was done with it by 10th grade. They charged too much money. They guaranteed that I would never have to reincarnate again if I kept joining.

5) In order to have a GPA high enough to graduate college I had to beg a professor to give me a higher grade in a class. He raised me from a “D-“ to a “D+” so my GPA went from 2.99 to 3.0. I was graduating a year early to avoid paying for another year so needed this desperately. Else I would never have graduated college and never would’ve gone to graduate school (where I was thrown out during year two).

6) In a year I won’t specify but more than five years ago I had a surefire technique for breaking into just about anyone’s email. Anyone who was potentially a threat to my business at the time had their emails read by me. And if they were really disruptive to my business I would disrupt their emails enough that they never bothered me again.

7) I tried to steal someone’s girlfriend. We all worked together. She told me she would break up with him. Then she told me she did break up with him. But she didn’t. The outcome was unbearable misery that affected four lives, three that were already born.

8 ) I had a car accident when I was 18 years old. I ran a redlight and almost killed someone. In the court case the lawyer encouraged me to lie and say the brakes didn’t work. So I did.

9) When I was at HBO I was helping to decide which companies would do which websites within the company. I had started a company on the side that was making websites for entertainment companies. I hired my own company in almost every instance.

10) One time, a very long time ago, I was angry enough that the police had to hold me down and then walk me to a motel that they made sure I checked into.

Things are different now. Every day now, when I wake up, I say my motto, “I’m going to save a life today”. Sometimes you can’t always make up for the past.  But its not about what bad things I did yesterday. Or what good things I’m going to do tomorrow. Its about taking a deep breath, enjoying the people who love you right now, and realizing that all of this can evaporate in a second.

 

Crazy, right?

2011
04/06
POSTED BY
Tyler Spurlock
CATEGORY
Personal
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