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The Almighty Buck United States News

How Viewing a "Virtual You" Can Help You Save 182

Posted by samzenpus
from the look-what-you've-become dept.
Hugh Pickens writes "The WSJ reports that computer scientists, economists, neuroscientists and psychologists are teaming up to find innovative ways of turning impulsive spenders into patient savers. One way to shock Americans into saving more for their retirement is software that lets users stare into a camera in a virtual-reality laboratory and see an image staring back of how they will look in the year 2057. By enabling the young to see themselves as they will be when they are old, virtual-reality technology can transform their urge to spend for today into a willingness to save for tomorrow because to the extent that people can more vividly imagine how badly they will feel in the future with little to no retirement savings, they can be motivated to save more money now. In one test experimental subjects who saw a persuasive visual analog of a 70-year old version of themselves by morphing the shape and texture of his avatar to simulate the aging process reported they would save twice as much as those who didn't (PDF). 'An employee's ID photo could be age-morphed and placed on the benefits section of the company's website,' says Dan Goldstein of London Business School. 'From there, we're just a few clicks and a few minutes away from someone making a lasting decision that can be worth thousands [of dollars].'"
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How Viewing a "Virtual You" Can Help You Save

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  • He's called "my dad"... and he worked hard his whole life, and I see that now at 64 has failing health, is tired all the time and doesn't do much apart from watching TV and surfing a bit. I know how my future looks, I can see him every day if I want.

  • If the individual inputted as having an unhealthy lifestyle such as heavy smoker with lack of exercise did the study show them as dead or suffering at these older ages? I've seen many 50 year olds that looked worse than my 70 year old father-in-law due to how they took care of themselves.

    Just other food for thought.
  • The image samples in the article are pretty weak, they look like someone spent a few minutes in Photoshop changing the hair color to gray and altering the skin tones a bit and running the image through a brush filter, and the overall effect is as if they created a "Second Life" clone from a photograph. Not very good age-progression at all.
  • by giampy (592646) on Sunday March 27, 2011 @04:32PM (#35632110) Homepage
    • by Shikaku (1129753)

      This video is quite fascinating. I think there should be more studies like these so we can treat the underlying problems of impulsive behavior, which in moderation is usually OK, but that some people take way too far.

    • Wow now I see why my sister seems like a dumb slob. I'm future-oriented and she's present-hedonistic.

      Those other RSA Animate videos are interesting as well.

  • by martin-boundary (547041) on Sunday March 27, 2011 @04:40PM (#35632168)
    Another way to help Americans save for retirement is to not crash the market...
    • Deflation helps savers. Inflation helps borrowers.

      You noticed all the "SALE 50%" signs go up in 2008/9? Deflation. Money increases in value.
       

      • by artor3 (1344997)

        A 50% off sale doesn't help the guy who just lost 75% of his wealth.

        • by mini me (132455)

          But it would be pretty foolish to put all of your money in the stock market. Something about putting all of your eggs in one basket or something like that. Other markets went up at the same time, so worst case should be that you are no further ahead.

        • by Colin Smith (2679)

          Um... *Money* becomes more valuable. *Things*, become relatively less valuable. Stocks, shares, property are *things*, not money.

          If you save *money* in a deflationary environment it becomes more valuable over time. If you invest in *things* in a deflationary environment they become less valuable over time.
           

      • by Yvanhoe (564877)
        But deflation makes banks who offer saving accounts useless to regular people. So it won't happen and be branded as an univocally wrong thing for the economy when such an hypothesis will be brought up.
    • by couchslug (175151)

      "Another way to help Americans save for retirement is to not crash the market..."

      Tee hee! You kill me! (runs)

  • by guruevi (827432) <evi@smo k i n g c ube.be> on Sunday March 27, 2011 @04:41PM (#35632180) Homepage

    Get $100 taken out of your paycheck every month for 40 or 50 years (480 months * 100 = $48,000) and then get a meager 600/month back for maybe 10 (120 months = however much $72,000 will be worth within 40 years) and if you're healthy enough 15 years.

    My employer pays for my pension plan and they put in $100 and the $600 is what the fund says I will get even though my investments are very aggressive at this point (50% goes in the tech and asian markets with very good dividends that double the investment every quarter, 50% in the safe 'recommended' aggregated funds which doesn't ever seem to make a profit but is promised to be always there even if the markets crash). If I make another $250 contribution every month they say I should be able to have the same income as I do now but measured against the historic devaluation of money that is not what I want to be making within 40 years and I really could use the 250 right now.

    The only way the pension funds work is if you're in the middle-to-upper class (>$250,000/year income) and can contribute easily a good $1000/month into your own managed investment funds. Then you should be able to cash in when you're 60 and live comfortably if off course you're investments paid off over time and you're not committing large funds in bubble's and crashes.

    • by Ichijo (607641)

      Get $100 taken out of your paycheck every month for 40 or 50 years (480 months * 100 = $48,000)

      If you add in the 8% annual long-term average stock market return, 480 months of investing 100 currency units per month comes to nearly 350k in today's currency units.

      • Yes, well, what do you do when you hit your planned retirement age in 2009? Or 2001, for that matter? At some point, you're going to have to step out of the risk that equities have in order to consolidate your gains.
        • by Ichijo (607641)

          Yes, well, what do you do when you hit your planned retirement age in 2009?

          You put off retirement for a year to wait for the market to bounce back. Better yet, you sold in 2008 because you saw the bubble and were fearful when others were greedy [wikiquote.org].

        • by grumling (94709)

          If you had any sort of investment strategy, you would have been out of risky investments anyway and wouldn't have noticed.

          • Ah, but if you were out of risky investments you'd not be getting the 8% long-term average yields.
      • by gknoy (899301)

        Let's say you retire at 65. How long do you hope to live? Till 75? 85?

        350k / 10 years = 35 k/year
        350k / 15 years = 23.3 k/year
        350k / 20 years = 17.5 k/year

        When we assume that social security is likely to be completely broken by the time we retire, our nest egg has to last us. 350k is still frighteningly small! Especially if you need to pay for medical treatment, or want to do more than sit in a small apartment and eat ramen.

    • my pension plan is the following, I have a unionized job in a medium ivy university, I get 3.35% of the average of my best five years by years worked there. I got job security and that I plan to retire atfer 35yr of service. I will therefore get what I got when I retire without doing anything else to save money!

      Unions rocks !

      • Unions rocks !

        So long as they're properly funding that pension plan. It might be more expensive than you think - just ask UAW retirees.

      • I will therefore get what I got when I retire without doing anything else to save money

        Are you sure? Promising to pay is one thing, but actually paying out is something else. Remember that airline workers once thought that their pension promises were secure too, until smart lawyers figured out ways to burn those promises in bankruptcy court and the pensioners received 1/3 of promised payments from the Public Benefit Guaranty Corporation (where pension funds go to die). The only thing that guarantees your retirement is direct ownership of assets, not a promise from someone else to take care of

      • by grumling (94709)

        That's great for you. Meanwhile, your students are saddled with massive debt to pay for your cushy retirement.

    • by vlm (69642)

      One minor flaw in the ointment is the baby boomers have just spent 40 years throwing money into the market for retirement. Now they'll be pulling it out.
      Consider the very basic supply -n- demand implications. Huge demand to buy results in high prices results in people believing the market will always miraculously give great returns. Then huge lack of demand aka selling means prices drop.

      Another problem is pre-tax is the govts money to be used at the govts beck and call, possibly even for your benefit, if

    • by Entrope (68843)

      Do you have any suggested alternatives that don't involve the multi-generational Ponzi scheme known as Social Security, or did you just want to whine?

      It should not be surprising that if you save $100 a month for 40 years, it will give you very much for very long after retirement. On the other hand, the median household income in the US is $50,000. If you rely on your employer to put aside the equivalent of 2.5% of your income, without putting in anything on your own, that is your own fault. Most American

      • by Entrope (68843)

        Typo: "it will give you very much" should, hopefully obviously, read "it will NOT give you very much".

      • Sounds like his whining is coming down to the fact that his company has a small pension. Ok well that's fine, the idea may well be "We are going to force you to save a little, but we'll give you the flexibility to decide what you want to do with the rest." Fine, but it is then on you to save more.

        At my job we have a pension and they take a variable amount (how much depends on how well the fund does, when it does bad you put in more when it does well you put in less) currently 9%, and the employer matches th

    • Get $100 taken out of your paycheck every month for 40 or 50 years (480 months * 100 = $48,000) and then get a meager 600/month back for maybe 10 (120 months = however much $72,000 will be worth within 40 years) and if you're healthy enough 15 years.

      My employer pays for my pension plan and they put in $100 and the $600 is what the fund says I will get even though my investments are very aggressive at this point (50% goes in the tech and asian markets with very good dividends that double the investment every quarter, 50% in the safe 'recommended' aggregated funds which doesn't ever seem to make a profit but is promised to be always there even if the markets crash). If I make another $250 contribution every month they say I should be able to have the same income as I do now but measured against the historic devaluation of money that is not what I want to be making within 40 years and I really could use the 250 right now.

      The only way the pension funds work is if you're in the middle-to-upper class (>$250,000/year income) and can contribute easily a good $1000/month into your own managed investment funds. Then you should be able to cash in when you're 60 and live comfortably if off course you're investments paid off over time and you're not committing large funds in bubble's and crashes.

      How on EARTH do you need to earn >$250k/year to contribute $1k/month to your retirement savings? I own a condo, have a paid off car (bought new) and contribute over $1k/month to my retirement... and I make less than 6 figures.

      • by DarkOx (621550)

        Single? or Married no children?

      • by guruevi (827432)

        For those that don't live in a basement with their parents and has a small family

        Let's say you make 65,000 gross, an average income in an average US city. That comes down to ~42,000 net after local, state and federal taxes, social security, insurance and whatever else comes out of your paycheck or ~3500/month.

        3500 - 800 rent or mortgage = 2700
        2700 - 300 car payment = 2400
        200 * 2 for groceries = 2000
        200 for cable, phone, cell phone etc. = 1800
        500 for various bills, car insurance, medical costs = 1300
        500 for

    • The magic number from all my calculations is around 12%. That pretty much assumes that the market will not be good at all, and inflation will be somewhat high. If you bank 12% of income your working career (including employer matches), and you purchase a home on a 30-year mortgage before you're 35 (so your housing costs essentially disappear at retirement), you should be GOLDEN, living better than you did when you were working.

      $100 or $200 a month isn't going to cut it. A person working in technology making

      • If you bank 12% of income your working career (including employer matches), and you purchase a home on a 30-year mortgage before you're 35 (so your housing costs essentially disappear at retirement), you should be GOLDEN, living better than you did when you were working.

        Sorry, but you're unlikely to be living better after retirement. You'll have little aches and pains all day, arthritis, hair loss, bad teeth, you'll need glasses to see, and have trouble getting it up, let alone having sex for half t

    • by wrook (134116)

      The only way the pension funds work is if you're in the middle-to-upper class (>$250,000/year income) and can contribute easily a good $1000/month into your own managed investment funds. Then you should be able to cash in when you're 60 and live comfortably if off course you're investments paid off over time and you're not committing large funds in bubble's and crashes.

      No offence, but this is insane. First $250,000/year is *middle*-to-upper class??? Even in the rich US $250,000 is past the 98th percentile for salary. Anyone who thinks this is a reasonable salary for middle class people has completely lost touch with reality, IMHO.

      Second, you say $1000 per month investment. On $250,000 per year income? That's over $20,000 per month pre-tax income. Maybe you left out a zero??? If not, this is the *definition* of not being able to save. Somehow you've got it into you

  • by iluvcapra (782887) on Sunday March 27, 2011 @04:47PM (#35632220)

    Just short of mind control, really. We're holding your future self for ransom and if you don't put your money in the the 401(k) he's gonna get it! It's also weirdly like the Wolfenstein HUD in that your character's face is used to communicate status.

    Such a technology as this is really an abandonment of rationalism -- we concede we can't use empirical arguments and evidence about saving and retirement to convince people to save, so now we'll just scare them. Notice that people are only manipulated into saving, and not into thinking about what to put their money into, which is the actual decision people are making. How will your face look if you discover in 20 years the stocks you were buying were a house of cards, and that the only reason you were putting your money into them is because your corporate HR department was guilting you. You should decide how to save their money with a sound mind, free of the sort of manufactured anxieties bank and stock broker marketers use to induce new customers, which is all this is.

    • Such a technology as this is really an abandonment of rationalism -- we concede we can't use empirical arguments and evidence about saving and retirement to convince people to save, so now we'll just scare them.

      Unfortunately, we do not live among Vulcans. People have feelings, and sometimes the best way to motivate someone is by manipulating those feelings. Sure, I'm an idealist in the sense that I think it would be ideal if people used their brains and saved more money. But I'm also a pragmatist, and my ex

  • by Colin Smith (2679) on Sunday March 27, 2011 @04:49PM (#35632234)

    Saving? Are you insane?

    Real inflation is hitting what? 8% per year. Anything I save is made worthless very quickly. It is handed over to the bankers. On the other hand, if I take out as much debt as is possible and then I get to pay it back in devalued currency.
     

    • by vlm (69642)

      Saving? Are you insane?

      Real inflation is hitting what? 8% per year. Anything I save is made worthless very quickly. It is handed over to the bankers. On the other hand, if I take out as much debt as is possible and then I get to pay it back in devalued currency.

      Frosting on the cake, is using the cash to either generate income or reduce expenses.

      On the other hand that assumes wages will someday increase in step with inflation instead of just 3rd worlding the countries standard of living...

      • by Colin Smith (2679)

        Not wages. Commodities, stocks and shares.

        With the Fed pumping out trillions, it's a one way bet at the moment.
         

    • by migla (1099771)

      >On the other hand, if I take out as much debt as is possible and then I get to pay it back in devalued currency.

      Or, even better, die indebted and you will have gotten more than you should have, in the end.

    • by oliphaunt (124016)

      We'd be damn lucky to see only 8%. Food costs went up 4% month over month in February alone, the greatest monthly increase since 1974. [ocregister.com] Assume the February increase is double the "actual" rate and we'd still be looking at 25% year-over-year inflation.

      Core inflation in 1974 was about 12% over the entire year. It was
      over 30% for the period from 1973-1975. This is significant because
      there is general agreement about the causes of the violent inflation
      of the early 70s: The global financial order fundamentally

      • by maxume (22995)

        They aren't excluded to hide cost of living increases, they are excluded because they are relatively volatile.

        Gas is pretty expensive these days, but it was only about 15 years ago that it was about as cheap as it had ever been.

        That you can research such information on their website sort of deflates the conspiratorial hand-wringing:

        http://data.bls.gov/pdq/SurveyOutputServlet?data_tool=latest_numbers&series_id=WPS0571&output_view=pct_1mth [bls.gov]

      • by vlm (69642)

        When the US went off gold and floated our currency, there was
        a long (5-10 year) period of economic shock while everyone had to work
        out what happened.

        I thought it was Hubberts peak of USA oil production happening just as predicted 40 or so years earlier... So in the '67 arab israeli war the arabs could shut off the spigot and ... who cares since pre-peak you can always increase domestic production. But in the '73 arab israeli war we were at or post peak so the arabs figured out they can now shut off the spigot and we get gas lines and economic collapse... And everybody had to work out what happened w/ regards to that.

        Also, its not so much "spot price fo

    • by MarcQuadra (129430) on Sunday March 27, 2011 @05:29PM (#35632504)

      The idea that you and I will have equal votes in forty years, when my life of scrimping and saving means I have $1M in the bank, and you're penniless and living on debt scares the bejeezus out of me.

      • by vlm (69642) on Sunday March 27, 2011 @05:48PM (#35632644)

        The idea that you and I will have equal votes in forty years, when my life of scrimping and saving means I have $1M in the bank, and you're penniless and living on debt scares the bejeezus out of me.

        The really scary part is that 40 years of 70s style stagflation in a post peak oil environment means $1M will roughly buy a cup of coffee at starbucks...

      • by IICV (652597)

        It's okay, each dollar of your $1M in the bank is an extra vote he won't have.

      • I'll keep spending it for you.

        You really need to find out what money is before you get totally robbed.
         

    • Only if the interest on that debt is < 8%.

    • by Lank (19922)

      You're my hero.

    • First off though you might want to do a bit more learnin' before you take a figure like 8% to be the "real" inflation because you read it on some random site (here's a hint: it's not).

      Then you might want to consider that your debt has interest factored in, unless you've convinced a bunch of friends to loan to you. You'll almost certainly find that interest is above 8% meaning that you can crow on about currency being "devalued" all you like, in real dollars you'll pay more to pay it off. Goes double since w

  • ...would be to find a way to drain those parasites at the top of more or less the entire finance system and many other sectors of the excessive riches they have misappropriated. The scum which acts as top suit of company A and sits in the board of directors of company B,C and D which colludes with the other scum which heads B and sits in A, C and D's board, approving each others thievery.

    As long as those parasites hold sway over the banks it does not seem to make that much sense to go on a saving spree. Com

  • This can not possibly reverse decades of conditioning that watching advertising has wrought on a typical mind. Advertising is what makes you want things you do not need. Advertising is what gets you to spend on things that you would not have heard of otherwise. Advertising is what gets you to buy things impulsively without researching alternatives, checking prices in multiple places to get a better deal, or thinking about whether you can do just fine without the damn thing. If you could train people to have

    • by ledow (319597)

      Wow. Are you really that easily led? Some guy on TV, radio, in a book or otherwise mentions a brand name to you and it "makes you want" things... MAKES you want?! I watch the shopping channels as entertainment - I've never seen anything quite so funny or as contrived and I've never once even considered buying any of those products. I don't think I've ever bought anything featured in an advert I've seen because of the advert (even if you assume some weird subliminal "X is better" subtext).

      If you're buyin

  • by cvtan (752695) on Sunday March 27, 2011 @05:01PM (#35632334)
    I'm 62 now. This means a computer has predicted I'll be alive in 2057! Woo Hoo!!!
  • Isn't this how The Simpsons were encouraged to save?

  • by rsilvergun (571051) on Sunday March 27, 2011 @05:57PM (#35632706)
    A wage that hasn't been declining since 1970.
    • by couchslug (175151)

      Try unconventional lifestyles and learning things to stretch your check over a lifetime. Learn to fix nearly everything you own. Have useful hobbies. Make friends with all the technology around you.

      • work harder, for less. Jesus, when did that become OK? Anyway, no amount of 'unconventional lifestyles' is going to help when I'm 50 and can't get health care (but am required by law to have bogus health 'insurance' with copays higher than I can afford). No amount of stretching is going to get around $5/gallon gas and a transportation system built around $0.89 cent/gallon gas. Food prices are shooting way, way up. We're seeing REAL inflation now. You can't squeeze blood from a stone, and btw, you can't fix
  • "Shock therapy" is available for only 5 easy payments of $99.99 on your credit card... Frankly I will wait until I see the numbers. Writing N=50, saying there was a "significant savings" and including a bad graph does not a scientific study make. Although it makes for what the marketing people see as a hell of a presentation. There's proof! See the graph?
  • reported they would save twice as much as those who didn't

    What people say and what they do are like white knight to black bishop.

  • by billcopc (196330) <vrillco@yahoo.com> on Sunday March 27, 2011 @07:48PM (#35633496) Homepage

    I stopped reading when they stated that a sloppy investor might be eating ramen noodles later in life, while a good investor could be eating sushi. That is such a moronic, consumption-based bullshit example that works so well on mindless US tweens, who are bombarded with the idea that wealth = happiness. Fuck that shit, man, I like ramen noodles!

    If you're worried about being broke in your late years, lifestyle decisions will have a much more profound impact than any typical investment strategy some banker will shove down your throat. Want to live like a king ? Don't have kids, and don't spend money you don't have. Better yet: choose a career where you'll still be valuable in your old age and retirement becomes a non-issue. A skilled consultant with 45 years experience will beat your retirement fund, since he won't be competing with inflation, he rolls it into his hourly rate.

    Ultimately, we are very adaptive creatures. I'm not saving up for retirement, though once the wife is settled in her career, and her student debt is paid off, we'll be earning more than we can reasonably spend, since we already live quite indulgently on our sub-average income. If we set a goal to retire by a certain age, we'll make the lifestyle adjustments to attain that goal. Right now, we're living for today and life is grand.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      I eat ramen now. Know what I'll be eating later?

      My gun.

      That's my retirement plan.

  • trying to scare people into digging in their feet and becoming schizophrenic ?

    in a world where top 1% gets 52% of all wealth generated, top 5% including that 1% gets a whopping 72%, and bottom 85% - practically everyone - gets only 15%, there is a lot you need to do before you ever need to get to the point of trying to scare people into savings.
    http://sociology.ucsc.edu/whorulesamerica/power/wealth.html [ucsc.edu]

    and no - the top 5% had not come to grabbing that much of everything by 'saving'. you cant get 72%
  • Saving up money doesn't stop you from growing old or dying.

With all the fancy scientists in the world, why can't they just once build a nuclear balm?

Working...