Online shopping, part II: what will happen to social life when more and more transactions happen online?

About 20 years ago, my Uncle Werner, who was a livestock veterinarian in a small town in Austria, told me about his maiden aunt in Vienna when he was growing up in the 1930's. She went shopping several times a day to the little stores on her block - some of them selling fruits and vegetables, some selling dry goods, some dairy, and some meat and sausage.

This was obviously not an efficient way to shop. But she wanted to get out of her tiny apartment, and the more frequently she went out, the more she saw acquaintances to chat with. Very little was sold in packages, almost everything was purchased by weight or by the piece from behind the counter, with a clerk assisting her. For instance, she might buy a quarter kilo of semolina flour, a couple apples, or a few pork chops.

My uncle contrasted this with the large groceries stores that were popping up everywhere in Austria at the time. They were about 30 years behind the US in this regard, but these stores had spread even to the small town that my aunt and uncle lived in, causing the smaller shops to go out of business. Uncle Werner felt sorry for the older people, who wouldn't be able to have friendly, convenient social interactions just by buying groceries.

And what about in this day and age? The days of the local corner shop are in the remote past, and nobody even remembers them. It's rare that you meet someone you know on a trip to the grocery store. And more and more transactions are moving online, as I wrote in my previous post.

So, how do people fulfill their basic human need for friendly social interaction? Most people get it through family, work, or school, but shopping had an important role to play in the past. I'm not a Luddite, and I enjoy shopping online, but I do believe there's something we lose when so many transactions happen online.

What is replacing the face to face aspect of shopping?  I think people will find things, because social interactions are a basic human need. But who knows what form it'll take.

Online shopping, part I: how almost all my shopping now begins and ends on Amazon.com

If I were a regular retailer - say, Target, or Walmart - I'd be running scared. Judging by myself, regular retailers have been loosing market share to Amazon in a big way. I used to go to the local Target about once a week, but now I go only rarely - maybe once a month. And it's very close to us, about a 5 minute drive. Sure, it's close, but Amazon is even closer - right at my fingertips, along with mind-boggling choice and reviews that make me more comfortable with my choice.

In the past 6 months, I've placed 43 orders (I know because of the handy order reporting on Amazon), for items such as a new set of bedroom furniture, a hummingbird feeder, a roll of self adhesive window film, luggage, an egg slicer, magnetic push pins, shoe goo, an exercise mat, a mini vacuum, tennis racquet, some jewelry, etc. And...oh yes, a few books. I could go on, but my point is, almost everything that I previously bought at Target or some other local retailer, I'm now buying on Amazon.

Why is this? Well...it's just so much more convenient. It's rare that I need something right this minute - most of the items I buy are wants instead of needs, and so the 2 day free delivery (we're Prime members) is fine for me. Then it's delivered to my front door, hassle free. Now, when I look at the selection of items available at the local Target, it seems kind of skimpy. And sometimes I think to myself, when looking at an item at Target - I'd really like to know what people who own this actually think of it. In other words, I want reviews!

Yes, the reviews - that's another huge reason that I'd just rather buy it on Amazon. The reviews are a big draw. It used to be that I would look up books on Amazon, read the reviews, decide whether or not I liked it, and then get it at the local library. I actually felt a tiny bit guilty about this.

But now the first step of shopping for anything - not just books - is to look at the reviews on Amazon. They're not uniformly helpful - I've found that too frequently, they're overly positive, and that the negative reviews are actually more accurate. It's as thought people take the saying "if you can't say anything nice, don't say anything at all" to heart. But they're still by far the best reviews online. It's just such a robust system - you can comment on reviews, you can mark them as helpful, you can of course actually write reviews. Reviews on the websites of other retails just seem to be tacked on as an afterthought, and not at all central to the experience.

So, where are other retailers planning on doing to fight the rise of Amazon? It'll be interesting to see what happens in the next few years.

In life, it's more fun to participate rather than consume

This thought came up last night, when I was an usher for a musical, the Little Shop of Horrors.  I've never done anything like that before, but a friend of mine had, and said that it was an outstanding show (it was!). So I arranged to be an usher via a few emails. The responsibilities of the usher aren't very taxing - you basically take tickets, and tell people where the bathrooms are. I had to show up an hour before the play for the training, which involved an orientation to the theater, where the men's and women's bathrooms are, and what's not allowed into the theater (glass containers, hot drinks without lids, food). Then I got a little basket for ticket stubs, and started ushering - tearing off ticket stubs, giving out programs, etc. I was in an area that got very few people (Gallery left), so it wasn't too stressful.

I definitely noticed that my customer service skills have gotten rusty - I haven't done much public-facing customer service in a very long time. It takes a whole different set of behaviors that for someone that's introverted like me, take a while to adjust to (greeting strangers, offering them programs, etc).

And the payoff - watching the show! It was a really fun, energetic show, and I got to see it up close - all the ushers were seated in the second row! I've never sat that close at a play before, and it was a real thrill to be able to almost touch the actors.

It's can be more fun to actually participate in something, then just to be a consumer. In this case, it was interesting to get behind the scenes a little bit, albeit in a pretty minor, insignificant way as an usher, than to just buy a ticket and watch the show.

My investing mistakes through the years

The very first investment I ever made was during my college years at Chapel Hill.  I had a little bit of money saved up - maybe 5,000 dollars - and decided to try investing it. Every year, Money magazine published an article listing the mutual funds with the highest annual returns. Sometime in the last 1980s, at the tippy-top of this list was a mutual find called the Tiger Fund, with a return for the year of 90%.

So of course, I put all my money into the Tiger Fund.  Who wouldn't? Why settle for number two, when you could put your money into number 1, and earn close to a 90% return?  Of course, you probably wouldn't get exactly a 90% return the next year. But I figured it would get pretty close - say, 60%. So I'd have no complaints.

Yes, that's really what I thought back then. I usually have a strong leaning towards skepticism, but certainly not in this case.

I lost a good amount of money in this fund, and then got out.

The very next investment I made was a closed end mutual fund. My parents are Austrian, so when I saw that a closed end, country-specific fund for Austria had the highest annual return of all closed end funds, I was drawn to it.  After all, Eastern Europe was just opening up, and Austria, bordering at that point with Czechoslovakia, Hungary, and Yugoslavia was a natural to take advantage of new opportunities. Right?

Well, that was another fiasco. I got out of it after losing what was, to me back then, a lot of money.

This wasn't the end of my investment strategy of chasing last year's highest returns. I experimented with a biotech mutual fund (I didn't do as badly with that one), and a few others.

But I gradually wised up. I read up on investing strategy, and started investing in broad based index funds exclusively.

Some of my favorite books were The Only Investment Guide You'll Ever Need by Andrew Tobias and The Four Pillars of Investing by William Bernstein. Reading these convinced me that I'm not Warren Buffett, that I wasn't going to be able to beat the market in general, and that I'd be better off not even trying.

Right now I stick with a well-balanced portfolio of a few index funds. It's not interesting, and it's not ego-boosting.  You can't tell people how your investments are beating the markets because of your well-chosen plan. But it's easy, and stable, and works very well.

I've thought about how to teach my two children about investing. However, aside from some basic table talk about how investing works, and what a stock is, it's premature for them. First they need to learn how to save money (ideally their own money, that they've earned), and only then, investing. So we have some time to spare.

Buy low, sell high - how to buy almost anything you want without guilt or buyers regret

I tend towards frugality and don't go shopping very often. I just don't like spending the money, I tend to think I'm being overcharged, and I get buyer's remorse frequently.

But there's an exception - buying used items, and then selling them for more than I paid. For instance - years ago I purchased this vintage school desk/chair combo for $20.

It hasn't been getting used recently, so I put an ad on Craigslist with some decent photos, and good descriptive text, asking $50 for it.  I settled for $40, and shared the money with my kids (they don't get an allowance, so this helps motivate them to sell their old things).

Another recent sale - I had bought my kids two huge bags of Duplo legos for about $15 when they were younger, one from a garage sale and one from a private school rummage sale. They were played with regularly, but now even my younger son is more interested in the standard legos, and the Duplos were just taking up too much space in the closet.  So I took some nice pictures, also including one where the kids had built an enormous tower that reached to the ceiling.

We were able to sell that for $60. I wish I could get that kind of return on my investments!  And, of course, we got about 5 years worth of great playtime from those legos.

One last example - before the kids were born, I bought a canoe for $200.  After years of use, with lots of fun trips around the area, I sold it for $250. Not as good a bargain as the legos, but still - I sold it for more than I bought it.

Here's a few tips for this kind of guilt-free purchasing:

• Buy used  Unless you REALLY know what you're doing, this is not possible with new items. It's not as straightforward to buy things used, but it adds to the challenge and slows down your consumption.
• Buy classics  A vintage desk, duplo legos, a simple, a standard canoe - these are all classics. They preserve their value and don't go out of style in a few years.  
• Write a great ad  Especially for higher value items - make an effort to take lots of good photos for your ad, and write up some nice descriptive text.  The more descriptive, the better. I think it also reassures potential buyers that you're not a flake, since you can put together a well-written ad.
• Wait for your price   Don't be too eager to sell it soon.  If you get a full price offer within a few days, you've probably priced it too low.  On Craigslist, it's best to create an account and login with that account instead of anonymously. That way, you can repost the ad easily and don't have to recreate it every week - this makes it easier to wait for the right price.

Also, I found this great article from Mr Money Mustache with lots more tips about buying and selling on Craigslist. He also mentions the concept of "storing" an item on Craigslist. Basically - if you have, say, a motorcycle that you're not using, sell it on Craigslist.  If in the future you want or need one again, then simply purchase another motorcycle on Craigslist. That way, you haven't had to deal with depreciation and storage. This doesn't work for heirlooms, but for most items, it's a great strategy.

A new indoor sport - Floor Pong

I've always been interested in racquet sports - ping pong when I was growing up, and then some tennis, and also a new sport called Speedminton or Speed Badminton. I never got good at any of them, but I always enjoyed playing.

After some friends of ours got a ping pong table, I tried to envision where we could fit one in at our house. There's really just not adequate room, though. But it stayed on my mind. Cleaning the garage recently, I found the ping pong paddles that we'd bought while we were living in Geneva (our apartment was too small, but there were lots of ping pong tables outside in parks).

I brought them inside, and tried to figure out what kind of game we could play, in the space we have. I ended up with a game very much like ping pong, just played on the floor. I put down some blue masking tape to mark the dimensions of the table (9 by 5 feet), with a line in the middle.  The rules are very similar to ping pong, but usually we just play without scoring.

One big difference between floor pong and ping pong is that in floor pong, the game quickly gets very close to the floor, involving a lot of bending of the knees. It give you a much better workout than playing regular ping pong - great for the quadriceps, too!

How to remove magnets stuck in the nose

Don't panic!  You can probably remove them very easily, with items you already have at home.

My son stuck 2 small neodymium magnets (the very powerful kind) in his nose a few years ago, one in each nostril (they stuck together across the septum).  We went to the emergency room, and spent hours waiting. The last unsuccessful attempt to remove the magnets involved having four nurses holding him down, while a doctor tried unsuccessfully to pry them out while my son was crying and struggling, blood dripping from his nose.

So, don't do that!  I found this simple trick just before they were going to put him under general anesthesia to remove the magnets surgically. Try it!

Here's what you do:

- Find a solid, iron or steel implement.  The handle of a heavy serving spoon that's not too large, the handle of a metal tool, anything like that.  The doctor ended up using the metal handle of some forceps. Even some common cutlery (forks and spoons) may attract magnets. You may want to test the implement with another magnet, to make sure it a magnet will adhere to it.

- Put the metal implement next to the nostril, on the inside.  Or if you can't find anything small that could fit inside the nostril, maybe you could even put something on the outside, on both sides?

- The magnet should adhere immediately to the metal implement, and be easily removed.  Success!

This is the article that I originally found that explained what to do, just before my son was about to undergo general anesthesia: An attractive approach to magnets adherent across the nasal septum. Unfortunately, it didn't show up very prominently when I originally searched in Google for "magnet stuck in nose", before heading to the emergency room. I had to add the word septum before finding it. If you're already in the doctors office, have them look at that article.

If you're interested in my original blog post that describes the whole episode in detail, here it is: Another Sunday Evening in the Emergency Room.