Tuesday, 24 August 2010

Consumption Smoothing: Financial and Gustatory

More meditations on Funny About Money's succumbing to temptation--in the guise of a hotdog. My first response--echoed by several others--was carry something with you!

I myself was last on a diet, back in the late 60s. EVERYONE was on a diet then, including my parents. The diet of choice was Atkins, which involved consuming huge quantities of meat. Since everyone was doing it, I did too. I got so dizzy, I tripped down a flight of stairs and realized I was not the dieting type.

Interestingly, my mother, now 80 years old, is STILL on a diet. She has been on diets ever since I can remember. My late father, who was a tubby child, was also always on diets. My mother's weight goes down now and again, but then goes up--higher than it was before. Her diet of choice is the modern incarnation of Atkins.

I too have been gradually gaining weight--first in my 40s and then a bit more in my 50s. But I am still OK. I am afraid that if I go on a diet, I will end up weighing as much as my mother, who is 4 or 5 sizes bigger than I am!

Sometimes I think you should just eat what you eat, if it is fairly healthy, and forget about it. That seems in line with something I read about finance by an academic, Lawrence Kotlikoff. He recommended "consumption smoothing." Here is his book for the non-expert, which I took out of the library a while back.



His basic point (I THINK) is to maximize the "use" of your resources through your life--but in a "smooth" way. So, you might not have refinanced your house during the boom years to buy a boat and a designer kitchen. You might have smoothly spent your way through--perhaps--a period of unemployment.

I guess Kotlikoff reveals the wisdom of Aristotle (Nichomachean Ethics) once more: to try to get to the point between too much and too little.

So too with dieting.

P.S. Granola bars, as my readers noted, are really candy-substitutes. My "granola bars" are usually peanuts and raisins in a zip-lock bag.

Do you agree with the concept of consumption smoothing?

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