Looking Good: The Quarter Million Dollar Choice, Pt 2

Research suggests good-looking people can earn up to a quarter of a million dollars more in their lifetime than their not-so-good-looking counterparts. As I discussed previously, looking good is a choice. Physical fitness, good grooming and careful wardrobe selection can take a person from average looking to good-looking (or, at least, from unattractive to average). This means that investing in your wardrobe, in your personal style, and in your physical fitness literally pays out.

Physical fitness deserves some special attention. I’m sure most people think that it is the trim, muscular types that are the most attractive, and thus the highest paid. For women, that is mostly true. Two researchers find that thin women are better paid. Women who weigh 25 pounds less than the average earn more than $15k a year. The more a woman weighs, the more the pay tapers off. But what about men?

Unlike attractiveness (where ugly men are penalized more heavily than ugly women), heavier men actually do better. The same study found skinny men earned about $8k a year less. A man’s pay increases with his weight until it tops off at about 207 pounds, after which it starts to fall again. Is it because skinny guys just look like bad workers? Or is it that heavier guys look like they need more money to pay for hot dogs? Who knows!

For women: again, I do not have much advice. For men: bulk up. There are numerous diets out there designed specifically to put on pounds (one is called “GO MAD“, which consists of drinking a Gallon Of Milk A Day). Also, lifting weights instead of running would be a boon. I’ve had some success following the Stronglifts 5×5 program.

Being attractive is not all positive… for women. Attractive women have difficultly breaking into high-powered positions, a result of what the Economist calls “the bimbo effect”. Further, researchers found that attractive women who include a picture with their resume are less likely to get an interview than their unattractive counterparts. I know that sending a picture with a resume is an outdated tactic, but in our modern world, with Facebook and LinkedIn, a woman’s picture is bound to be seen by a recruiter. The best bulwark against this bias is to not include a picture with one’s resume… though in the case of social media sites, perhaps try to find a professional photograph.

So, for those readers that do not take the necessary steps to make themselves more attractive, remember that it is a $250,000 choice. And it penetrates deeper than just your paycheck. The research suggests the spouses of unattractive people (regardless of their own attractiveness) end up making less a year. So even if all you do is sit in front of a computer at work, and no one around you cares how you dress, remember that looking good means your wife will take home more in her paycheck!

Affordable Care Act Upheld

While I’ve not read the actual ruling, only breakdowns of it, I wanted to get down some brief thoughts before they slipped away.

The biggest piece being contended in the Affordable Care Act (ACA) was the “individual mandate”. This would require all Americans to have health care, and penalize those that do not. The Supreme Court (SCOTUS) critically found that it is within Congress’ power to tax people for not having coverage (though not mandate coverage under the commerce clause). This means that ACA now includes a TAX (or, tax break if you have health insurance) and not a MANDATE. Prepare for this to be THE talking point in the November elections… “Obamacare is a huge massive tax, Obama is pro-tax.” In fact, it’s already started:

It is true that the ACA costs more people more money, but by taxing individuals without health insurance that cost is not going to fall on the average person (average as in, middle class, working, insured). A lot of people have equated this mandate with car insurance. It is a useful comparison, but not wholly accurate. You do not have to buy car insurance if you do not drive a car, and, as such, the libertarian types would have us believe that we have a choice in the matter. Even if you buy into this argument, it does not fully work with the ACA. You cannot opt-out of health care like you can opt-out of driving.

We have decided, as a civilized society, that we want every person to receive health care. If you are struck by a car crossing the street, the ambulance is going to pick you up, the EMTs are going to treat you, the doctors are going to put you back together, whether you like it or not. Leaving you to die in the street, we have decided, is inhumane. So in this way people cannot say “no” to consuming health care. As such, why would a responsible government let them say “no” to health insurance?

Hospital bills without insurance are devastating. Most uninsured people I know will never be able to pay off the debt incurred by a hospital visit. As they do not pay the bill, the hospital has to recoup that lost revenue by raising prices for those that do pay (ie, the insured). The result is that uninsured people cost insured people money. If everyone is insured, everyone can pay, and the costs fall.

Further, as more people buy insurance, risk is spread among more people, resulting in rates dropping for everyone.

Even further, a bigger market means economies of scale. Companies can usually take on additional customers without increasing their operation costs. This means they can offer a product for cheaper. And, for the naysayers, keep in mind the ACA requires health insurance companies to spend the vast majority of their revenue on HEALTH CARE. If your insurance company cannot prove they are spending their income on health care (ie, they’re spending it on administration and overhead, or they’re taking it as profit) they’ll have to cut you a check and return some of your premium.

Overall, I see this as a major policy victory. Perhaps more importantly than ACA itself is the door this has opened. I don’t think ACA is perfect. I think we can do much better. But we have taken a huge step towards where we need to go, and I doubt we’ll see another US Senate supermajority in the near future to accomplish a similarly large step. Jared Bernstein, a prominent economists, summarizes my thoughts nicely: “I’m not thinking politics right now.  We’ve got to fix our health care system, and ACA, while not perfect, is a good way to start doing so.  Now that it’s the law of the land, it’s time to blow past the politics and implement it as quickly as possible.”

Looking Good: The Quarter Million Dollar Choice, Pt 1

At my work, there is no dress code. Every single day I can walk in wearing a t-shirt, jean shorts, and gym shoes. Some of my colleagues even do. But I do not. Now, don’t think it isn’t tempting. To be able to wake up in the morning, roll out of bed, grab any random piece of clothing and stumble into work would save me a lot of prep time. It would cut down on how often I have to wash clothes. Perhaps more importantly, it would cut down on how much money I spend on clothing. Imagine how much time and money I could save!

No, really. Imagine how much time and money could be saved. A few hundred dollars a month? A few thousand a year? Multiply that over a lifetime and you’d likely save $100,000. And perhaps lose up to $230,000.

A book released in 2011 by Daniel Hamermesh, titled Beauty Pays: Why Attractive People Are More Successful, calculates that attractive people are paid more, to the tune of $230k over a lifetime. It’s always been thought that pretty people have it easier in life, but now we have the data to back it up.

Now, it makes sense that beauty would be a heavy factor in jobs that require human interaction. Pretty salespeople make more sales. Beautiful customer service people have few customers yelling at them. But what about jobs that are more clearly about ones brains? Hamermesh finds the effect is pervasive through all facets of society. In almost every single job, pretty people make more. Pretty professors are paid 6% more. Unattractive quarterbacks make 12% less.

And what of the gender differences? There is such a huge push for women to wear make-up, to dress up, to look pretty all the time. Just go to your local gym and you’ll find girls putting on makeup BEFORE they exercise. Well, Hamermesh finds that it is actually men that feel this effect more. Unattractive men are paid 22% less than average looking men, compared to 3% for women.

For those of us that were not born ridiculously good-looking, this can be a bit depressing… but it shouldn’t be. Hamermesh points out that beauty is multifaceted. A sculpted jaw line, radiant eyes and a perfectly symmetrical face are not the only ways for a person to look good. Dressing well, practicing good hygiene, and being physically fit is a huge part of being attractive. Hamermesh measures the amount women spend on beauty products and sees an increase in their paycheck. The same applies to men.

Hamermesh does point out that this effect has diminishing returns, and he suggests women will spend more in beauty products than they will make up in pay. For those women, I do not have any great advice. But for men, who do not spend so much on disposables (like make-up), purchases are longer lasting and can bring far more value. A good pair of shoes or pants can last a long time, and wearing them over and over does not draw as much attention as a shirt. A good suit is also a sound investment for anyone… especially if you do not wear it too often. For a man who only wears his suit a few times a year, a well-fitting, well-made suit can really make those few times a year stand out.

There is also physical fitness. I will cover the topic in more depth in my next segment, but suffice to say, getting active and getting fit will make you more attractive, which will increase your net worth. It will also bring myriad benefits to your health and energy level.

Until my next segment I say looking good is a choice… a choice that could bring you a quarter of a million dollars.