The Search for Meaning Might Drain Your Bank Account

“They haven’t said much about the meaning of life yet.” – Monty Python’s The Meaning of Life

20150624_193844-001

So, is the meaning of life having a super sweet car like this?  If so, would having a Bat Cave be like double extra meaning?  If so, count me in!

One tragedy of our current culture is lower amounts of social interaction leading to meaning.

So what do I mean by meaning?

Meaning is significance.  Meaning is working on something important.  Meaning implies actions that change the world for the better, or at least change someone’s life for the better.  Ideally, this work is something that you are uniquely suited to do and that you’re good at, but those things aren’t absolutely necessary.  The idea is that you have some way that you can actively change the world for the better.  And you don’t have to paint the world to make it better, because the world is really big, and it would take a very long time to paint it, kind of like my house exterior, which, at last count, has taken me 10 years to paint, mainly because I haven’t started yet.

But meaning takes time.  And it takes persistence.  And sometimes it takes money.

Those things can be difficult, especially if you’re lazy like me.

So where can you get meaning?

  • Your job. A job is a good and admirable place to find meaning, and ideally yours is such a place.  But it probably isn’t.  Some people, like those at the IRS, actually have a job that implies they will make others angry with no real discernible benefit to society.  How about being a prison guard?  Tough duty.  And how many jobs are, well, just plain BS?  If you have one of those or aspire to one of those, you’re in luck!  There’s an entire web page dedicated to generating job titles for you!  (LINK)  Chances are better than even that your job is just that – a job.  It’s a job that people pay you to keep doing rather than a saintly crusade to save the planet.  Hey, at least you get paid, right?
  • Your family. This is a great place to get meaning.  But if you’re a dad like me, your main job is to produce independent and tough children who view the world as a challenge that they want to beat.  It’s like you light a bottle rocket and then . . . off it goes.  After you’ve done lit the fuse, well, it’s gone.  And it doesn’t need you anymore – it has a purpose and a path.  I apologize to anyone who really desires to make dependent children who are needy basket cases, but that’s not the way we roll at Casa Wilder.  So, by definition, my children need me less each and every day.

What are the alternatives if you don’t get meaning at work, and need more than family can provide?

meaning

In the United States we used to take part in civic organizations to do meaningful work, or at least drink and smoke cigarettes, pipes and cigars while we pretended to do meaningful work.  Or smoke and talk drunkenly about the meaningful work that we really, really intended to do.  But those civic organizations really did accomplish a lot – from scholarships to the foundation of hospitals and clinics to funding zoos and draining swamps to get rid of disease-carrying mosquitoes.  And our forefathers accomplished all of that with a hacking cough and a buzz on.

Sadly, one last civic organization I attended spent more effort complaining about other members of the organization that weren’t there than it did changing the world.  And they didn’t even drink.  I don’t go to meetings anymore, though I did suggest beer would be good at the meetings.  If we’re not going to do something to help humanity, at least we should drink, right?  I don’t smoke, but I’d be willing to learn, if it helped.  Alas, this sober and smoke-free organization does little to change the world.

As a nation, our civic participation is down overall – the book Bowling Alone recounts how membership in groups that meaningfully participate at the local level of communities is . . . down.  Rotary.  Lions.  Boy Scouts.  Knights of Columbus.

It even reaches from structured clubs to bowling leagues.  Bowling leagues?  Well, the author used that data to show that social interaction was down across the board.  The overall number of bowlers is up, but the number of participants in bowling leagues is down.  We’re bowling, but we’re only bowling with people we already know.  We’re not using any sort of social energy to meet other people and forge new friendships and relationships that strengthen the civic core.  But at least you can drink and bowl.

If I was a cynic, I’d say the system was designed to do decrease civic participation – if we’re not actively making our community better ourselves, well, we can leave it for government to do.  Government likes this a whole lot.  Things that used to done by ordinary citizens in the community, say, being on the volunteer fire department, can now be replaced by professional firefighters who get paid.  Government wins both ways – the fire department employees like to get paid and vote for the people that pay them, and government has assumed another duty that it must tax for.  A win-win!

Unless you’re the guy paying taxes.

Regardless of why civic participation is down, it is down.  The reasons might form a future post.  And that removes a very significant opportunity to be, well, significant.  Thankfully there are other outlets.  Me?  I write this blog.  I know it’s seen by nearly every person on the planet right now.  Okay, okay, it’s not.  But traffic is heading that way.  At current growth trends in the year 2371 everyone on Earth will be doing nothing but reading my blog six hours a day.  Which is as it should be.  Then I will be officially meaningful.

However, there are other outlets besides writing that are preferred by other people:

Gaming.  I think I’ve told this story before on the blog, but keep in mind, when I originally wrote it I was getting about 1/10th the traffic I’m getting now.  So, if you’ve heard this story before, pretend you haven’t, because I’m going to tell it even better this time:

In the 1990’s, I remember watching the HBO™ series Dream On.  In this series, a newly single guy in New York had numerous adventures.  Since it was on HBO®, many of the adventures involved scantily clad females.  Or completely naked females.  But I turned away from the set and read my Bible during those naughty, naughty scenes.  Thank heavens the VCR was recording.

The main character had an office job in New York.  He also had a secretary, Toby.  She was written as a nearly worthless secretary with an attitude.  In one particular episode, she does nothing but play a video game on her work computer.  You could do that before the Internet and the IT department tracked every keystroke.

The game involved a supermarket.  Toby started the episode as a stock boy in the game.  Then she worked her way up to bag boy a few scenes later.  Then, cashier.  Then a few scenes later?  Produce manager.

Finally, at the very end of the episode, she yelled:

“I DID IT!”

“I’m the MANAGER!”

“Of a supermarket . . . that doesn’t exist . . . .”

With each phrase, her emotions changed.  At first, joy in achievement!  Secondly, a questioning voice . . . a manager.  Finally, her voice got very small.  She realized her accomplishment was really no accomplishment.  It lacked meaning.

If you like games, if you like escaping in them, that’s fine, more power to you.  But remember, they’re not really a substitute for actual achievement.  Plus, this is Wealthy Wednesday – how much money do you want to spend on games, anyway?  And how much time do you want to spend on them?  Yeah, I know, I spent two hours today.  But . . . umm, I’m sure I had a good reason.

Consumption.  Yes, this is Wealthy Wednesday, and as such we finally have to get around to this.

Consumption is used as a replacement for actual significance and achievement.  It’s even encouraged.  Why does it work?

Where else can you go, hunt for something, find it, and then get it.  It’s certain to work, every time.  You can’t fail.  Yet you get the opportunity to experience the flush of success, the dopamine rush from having found and purchased what you were looking for.  And if you bought it off the Internet, you get a second rush when the little brown box from Amazon shows up*.

That purchase gives the same feeling as accomplishing something that has actual meaning, and there’s none of the work and none of the uncertainty.  It almost doesn’t matter what the thing is.  It could be shoes.  It could be books.  It could be lightbulbs.  It could be PEZ® dispensers.  As long as it’s something that you can actually do, your brain can take this stimulus and turn it into a replacement for actual achievement.

And it has been culturally jammed into our heads – we’re not who we are, we are the sum total of what we own.  We are our car.  We are our house.  We are our slacks.  We are our PEZ® dispensers.  This consumption has replaced civic virtue.  It has replaced the Lions Club.  It has replaced the Rotary, the Kiwanis, and the Knights of Columbus, but unlike those groups, you can do it alone, at night, downstairs in your underwear, after a few beers.  At 2AM, feeling like you haven’t lived up to your potential in life?  If you’re tired of being the manager of a supermarket that doesn’t exist, well, perhaps you can check in at Amazon.com® to see what you can buy to fill the achievement and meaning-sized hole in your heart?

This post is about wealth – and the first requirement of being wealthy is that you don’t spend thousands of dollars on useless crap to replace meaning in your life.  Especially if you don’t have the cash to spend.  If you don’t have the cash to buy that new truck and you buy it anyway?  Now you have debt.  And the debt removes your peace of mind and you go in search of more meaning, so you buy the boat.  And you and your wife have to work for years of your life to pay for it all.

That’s okay, it’s not like you can become a slave to your own consumption based on your search of meaning, is it?

Nah.  I’m sure that doesn’t happen.

*I refuse to say how I learned this.

Computers and Privacy: Pick One.

“Ma’am, please calm down.  Your CD tray is not a cup holder.  I cannot help you clear your browser cache.  No, I’m not in India.” –Strongbad

privacy

You’d think they’d have learned about incognito browsing back in the Middle Ages.

I have no illusions of having any privacy when it comes to computers.  None.  The only computer that’s safe is one that has never been connected to the Internet.  And if that were the case, how would you then get all the cat pictures on the computer?

privacy2

Be true to your cat.  It will wait until you’re dead before eating you.  But it won’t wait too long.

The only safe computer is one that’s not connected to . . . anything.

Sound paranoid?

Check out this article on Bloomberg (THE BIG HACK).  I’m probably not paranoid enough.  And I’m certain you’re not paranoid enough.

That article is really long, but it shows, step by step, how the Chinese managed to put hardware on computers that specifically bypasses all of the security protocols.  If this hardware is on your computer?  The only reason that they haven’t blackmailed you is that you’re not worth it to them to have their technology exposed.  It’s amazing – the chip that they put on that allows this to happen is smaller than your Mom’s patience on a hot day when the air conditioner is out.  And they made it small enough so it doesn’t even show up on the board – they put it in between layers of fiber on the printed circuit board.

This chip allows them to have access to whatever they want to on the system or reprogram it on the fly.

So, no.  The Chinese won’t blackmail you because they’d rather keep listening to everything.  And I mean everything.  How many motherboards in the Pentagon were made in China?  Yeah.  It’s big.

privacy5

It could be worse.  It could be your wife.

But it’s not just the Chinese.  We’re doing it to ourselves, as well.  The National Security Agency has built a data center.  This data center has over 1.5 million square feet of storage, and will use 65 megawatts of electricity, and will use 1.7 million gallons of water a day for cooling.  It’s estimated that it will have storage of over a dozen exabytes (according to ZME Science, five exabytes is equivalent to all of the words spoken by human beings – ever) of storage.  If this sounds like Bill Gates’ guest house, well, you’re right.

But in this case this storage will be on real-time internet surveillance.  And as we’ve seen in the past, the NSA and the other three-letter agencies don’t really care about pesky things like the laws that prevent them from putting Americans under surveillance.  Nah.  That’s for amateurs.

This data center requires massive numbers of servers.  How many of them were made in China?

There is no privacy.  Our government might not even be able to keep its secrets . . . secret.  What chance do you have?

None.

The implications?

Imagine a Supreme Court nominee in the year 2050.  The nominee is 50 – and has spent almost their entire life online.  Imagine further . . . the browser history from when they were 14 showing up?  Sound silly?  It certainly isn’t – not after the last month’s bit of nonsense in the Senate.  I’m surprised they didn’t discuss fart jokes the nominee made in 1982.  Oh, wait, THEY DID.

Back to 2050:

“I see, Mr. Nominee, that in the year 2014, at the age of, what, 14?  At that age you seemed particularly fascinated with oil-covered girls wearing bikinis.  How can you defend that in light of our desperate oil shortage and the man-made global cooling?  And bikinis were outlawed several years ago as hate clothing, I must remind you.  Did 14 year old you have NO IDEA of the pain you would cause the future?  I respectfully ask the committee chair to put some more coal in the stove?  We have to get more precious CO2 into the air to hopefully warm our atmosphere.”

And there’s a further rumor (I have no idea if it’s true or not) that one particular Supreme Court Justice changed his vote on the constitutionality of Obamacare due to blackmail obtained from his electronic records.  A rumor, I must stress.  But not something I made up (Link) like that story of how Bret Kavanaugh and I broke into that ancient Egyptian site and found the Ark of the Covenant®.  Yeah, it was really the Arc of the Covenant™, which contained the geometry homework of Moses.privacy4

So, if you’re true to yourself, you’ll never go on a daytime talk show.

I became convinced that computers were fundamentally insecure due to Ben Franklin’s old adage:  “Three can keep a secret, if two are dead.”

Computers give their greatest value to us when we link them together.  The Internet is just that – linked computers, talking to each other, and sharing information.  And most of it is super important, too!  Like what the Kardashians did this week.  Or where Ben Affleck is at this current moment (and if he’s sober).  And how Russians have a campaign against Star Wars™.  Not the space-based missile defense.  The movie.

But all kidding aside, the networking of information systems has allowed amazing amounts of information to be shared across the world, allowing us to be more well informed.  Or, if you spend actual Internet time on the Kardashians, more entertained.  This communication has made our systems more efficient, and has allowed us to negotiate better, to learn new skills taught by people thousands of miles away.  But connectivity and value creation comes at a price.

The ways that computers can be compromised is amazingly large:

  • Hardware Exploits – As described above. This is fairly new.  Makes you wonder about how our fighter jets would perform if we ever went up against China?  Might just fall out of the sky?
  • Viruses – These won’t stop, and will get cleverer as time goes on, and more systematically destructive.
  • Day One Vulnerabilities – These are errors in the operating system that allow bad guys to get in to the system. They’re everywhere.
  • Backdoors – These are pre-programmed into operating systems so that folks like the (cough) NSA (cough) can get in anytime they want. They could likely watch me type this in real time.  But they can come on over and chat with me while I do it.  If they bring the beer.

I may be the last person who doesn’t pay bills online.  I also don’t bank online.  When my identity got compromised (The Lighter Side of Identity Theft) I actually signed up for Lifelock®.  The folks at Lifelock™, when I got compromised again, noted it was good.  Online banking was the source of a lot of tragedy that they’d seen.

So in a world where everything is offensive to someone, and everyone’s secrets aren’t really secret, how can we have a civil society?

Have no shame.  It seems to work for the Kardashians.

Opportunity – Like The Truth, It’s Out There

“This technology has been falling to Earth for centuries.  All it took was the right mind to use it properly.  Oh, the advances I’ve made from alien junk.  You have no idea, Doctor.  Broadband?  Roswell.” – Doctor Who

roswell

Business Cat is ready for another adventure . . .

As I’ve made clear in previous posts, (Rome, Britain, and Money: Why You Can’t Find Fine China after the Apocalypse, More Budget Doom, The Rolling Stones, an End Date, and an Unlikely Version of Thunderstruck, Early Retirement: Things to Consider (cough Health Care cough)) I think that our financial system is in trouble due to debt, currency debasement, and structural benefit issues with things like Medicare®.  In fact, I think that it’s mathematically certain that we’re going to have at least one more catastrophic dislocation (fast or slow), and my bet is that it occurs between 2024 and 2040.  Could it come sooner?  Sure, you stunning optimist!

However, none of that means that you can’t give yourself the means to be comfortable despite the decline.  And if I’m wrong about the decline – which I really hope is the case – then you’ll be in better shape.  I mean, round is a shape, right?

So, how do you make a bunch of cash so you can snort Cuban cigars, or do whatever it is the kids are doing with Tide® Pods™ while being flanked by surgically enhanced Instagram models?

Start by doing something.

Action leads to opportunity.  Inaction might help your video game scores and Cheeto® consumption, but to really create a situation where you’re going to have opportunity, you’re going to have to do something.

Living in a big city is great for creating opportunity.  But living in a big city also involves living in a big city.  And the last time I lived in a big city, it was Houston.  Houston was great – I met a guy who gave me baseball tickets.  Baseball tickets that were right behind President Bush’s (the first one) seats.

DSC02888

Yeah, I took this picture.  How cool is that?

H.W. and Barb were there that night.  Then President Bush took us to his house and showed me the actual documents from Roswell while The Mrs. and Barb arm wrestled in the kitchen and then played some drinking/fighting game from Mexico that involved tequila, a bandana, and knives.  H.W. shared the big secret with me in his study over snifters of brandy:  turns out what they found at Roswell wasn’t aliens, it was just dolphins with spaceships off on a drunken joyride.  No biggie.

uforoswell

The real cover up?  They had actually found Eleanor Roosevelt’s underthings.

Okay, the Roswell stuff I made up.  But I did get those tickets and President Bush was there that night.  And nobody in Podunk, East Midwestia is going to have tickets like that.  Big cities breed opportunity to build connections based upon the sheer concentration of people.  If you’re young and looking for opportunity?  Big cities are it.  Although my brother, who is also named John Wilder, did meet Bob Denver when he stopped for gas in a town of 1,500 people.  My brother was working at the station that day.  Said he was the nicest guy you’d ever meet, so, yeah, random meetings will happen.  But they’re the exception, not the rule.

If I were fixated on opportunity, yeah, I’d move to a big city.  But it’s not my cup of tea.

bobdenver

Okay, this might be fake trivia . . .

When doing something:

Don’t quit your job, unless you already have a lot of money, or are certain your crazy scheme will work.  Or unless you have nothing to lose.  When Jeff Bezos quit to start Amazon.com, he had enough money and enough connections that he knew he could restart if Amazon failed.  But for every Bezos, there are tons of people like Davos Riggins.  Who is Davos Riggins?  I don’t know.  He didn’t do anything.

A minor bragging point – I found a name that returns zero hits on Google® on the second try.  Ha!  And apologies to Davos Riggins if you really exist.  But you have to admit you’ve squandered your potential.

Don’t borrow zillions of dollars to put your idea into practice, unless bankruptcy can’t hurt you.  And even if you win?  The debt will make your company less profitable.

What can you do to create opportunity in life?

Depends on you.  One of the things (not the only thing) I do is write.  Before this post, I’d written 229 posts comprising 316,000 words in the last 18 months.  Why?  I enjoy it.  Also why?  It’s doing something – it’s using the Internet to create possibilities that didn’t exist before.  And after 229 posts?  I still have dozens of sticky notes with topics that I want to write about – I have more topics than time.

But that’s my thing.

What about you?

  • Build something cool. Sell it at a flea market.  Or on EBay™ or Etsy®.
  • Start a company that to help people find PEZ® dispensers. Oh, that was how EBay© got its start.  This is a lie.  A sweet, beautiful lie (see comment below), but a lie nonetheless.  And now I owe doughnuts!
  • Start a social network that only allows communication via cat emoji – suggested name? Snapcat©.
  • Write a list of 100 things you’re good at.
  • Write a list of 100 things you like to do.
  • See how the lists overlap? I bet there’s opportunity there.
  • Go to conferences and meet new people.
  • Meet their friends, too. They know someone that can help you.
  • Learn from your losses.
  • Start again.

Regardless of the way the world is going, you can thrive.  You really can.  If you imagine the US economy as a swimming pool, each gallon of water in the 40,000 gallon pool would be worth $5 million dollars.  And that’s every year.  And it’s not counting all the pee in the pool from when you had your nephew over.

Would you miss one gallon out of 40,000?  No.  Nobody would.  And just like the pool, the economy doesn’t care.  Not even about the pee.

There’s room for you to be as successful as you want to be, if you’re willing to sacrifice your time and location and fail again and again.  And even when you win, you won’t be satisfied.  That’s the biggest gift yet – the quest.  If you’re good at it, if you like doing it, if you can make money at it, and if it changes the world?

That’s a start.

A good one.

Seven Deadly (Financial) Sins, Together For The FIRST TIME!

“Deserves got nothing to do with it.” – Unforgiven

deserve

Actually not my favorite Clint Eastwood movie.  That would be Outlaw Josey Wales, or ANYTHING he did in the 1970’s.  But I do know my limitations . . . .

When it comes to my life, I’ve made mistakes, like convincing George W. Bush to attack Iraq.  I should have remembered – never get involved in a land war in Asia.  But those mistakes aren’t the ones we’re discussing today.  Today . . . we’re discussing the Seven Deadly Financial Sins, at least after I put on some spooky music to scare you into never sinning.  Oh, I did discuss the Actual Seven Deadly Sins, and you can read that post here (The seven deadly sins and society. How do they fit together?).

We’ll start with the worst sin:

Debt

Is debt a sin or the result of sinning?  I’m not going to sit and argue it – these aren’t really sins you go to Actual Hell for anyway.  You just go to Financial Hell.  So, I’m calling Debt a sin.  And I’m calling it a result of sin.  It’s the “Y” of Sin – sometimes a vowel, sometimes not.

Debt is really, really bad for individuals.

Why?

With debt, you get what you want, now.  Like a brand new Corvette®, or a rare 1621 A.D. PEZ® dispenser originally whittled by Galileo while he was in prison for stealing cable television.   I’m sure that was the best deal I’ve ever made, only had to pay $500 for it!

But now you have the object of your desire.  And you have to pay for it.  That’s not a problem.  You only borrowed $50,000 for the Corvette™, right.  You’ll pay (for a seven year loan) about $680 a month at 4% interest.  Not bad!

But of that, your first payment will contain around $170 in interest, money that you’re paying the bank, every month.  $1,800 in interest in the first year.  The total interest you’d pay in this situation is $7,400 over the life of the loan.

Now let’s say you buy a house for the average price in the country, $200,000.  Your payment on a 30 year loan would be a little more than $1000 for principle and interest, with a whopping $750 of that being interest in the first month.  In the first year?  About $8,800 in interest payments alone.

Sure, you have a house and a car, but you’re paying nearly $1000 a MONTH just to borrow the money in the early parts of the loan.

How much income would be required to fund this?  Your tax rates will vary, but I’ll assume your tax rate leaves you with about 70% of your money after you’ve paid all of your taxes.

$17,000 in pre-tax income would be required . . . just for your interest payments.  Toss in the principle, the taxes and insurance?

$50,000 in pre-tax income to pay for taxes, insurance, and the full payments.  Some people work a whole week and don’t make that much money!

If you make the median family income of $59,000, you have the princely sum of $9,000 before taxes ($6,300 after taxes) a year to buy absolutely everything else in your life.

“Sovereign ingredient for a happy marriage:   Pay cash or do without.  Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity.” – Robert A. Heinlein

Is there a place for debt?  Sure.  Businesses use it to expand.  Families use it to create a reason to divorce.  Or buy a really cool PEZ® dispenser.

The least bad debt?  Mortgage debt.

Worse?  Credit cards.

Worst?  Student loan debt or money you owe to mobsters.  But I repeat myself.

Have I sinned?  Yes, I have.  But that day in January of 2001 when I paid off my last non-mortgage debt except for student loans?

Priceless.  And marriage harmony went up 41.7% that day.

Fear

Had I continually invested all of my spare cash into the market, say in a nice S&P 500 fund?  The cash that’s sitting in the bank, gathering only a little interest?

I’d be retired today.  Smoking nice cigars and drinking good scotch.  With an airplane.  A cheap one, but an airplane.

Dang.

I’ve successfully predicted 11 of the last three recessions.  That may not be the most useful talent I have.  I will note that I at least come by it honestly.  One set of great-great-grandparents decided that they wanted to get out of Germany because they saw the increasing militarism in society and figured that war was coming, so they’d get out before it got bad.

They left Germany in 1880, 34 years before World War I and assimilated the heck out of themselves – one of them was Eisenhower’s grade school teacher – how American was that?

I’ve said before that being right too early is the same as being wrong, but in this case?  I have all of my cash.  And my great-great-grandparents avoided the mess that was post World War I Germany, where, I hear, the Internet was horrible.

Greed

Okay, I did play with some great stocks during the teens.  Several of them doubled within a month of me buying them.  And I kept riding some of them right into the ground.  I turned $20,000 into $40,000 into $5,000.  Which will be a great tax write off, when I finally sell it.  Will someone please cue the sound of a forehead repeatedly hitting a desk?

Waste

In a recent post, I mentioned that the most expensive food is the food you don’t eat.  I’ve done the math:  when we go out to eat at Taco Bell®, we spend around $40.  How much steak does $40 buy?  A lot.  How much steak gets wasted around the Casa Wilder?

Zero.

And we can’t eat steak every day.  I mean we could, but we can’t.  But when we have to throw out food, I feel horrible.  Maybe it was the way that Great Grandma McWilder would talk about how fortunate we were to NOT BE STARVING when I wasn’t finishing lunch.

And Great Grandma McWilder came through the Depression on the “nearly having to eat your shoes” side, so she knew how to put a guilt on you.  And waste was the sin that she preached against daily.  In her house, it if had any use?  She’d save it and use it.  Thankfully she didn’t die in her sleep and eat me (Sleep Deprivation, Health, Zombies, and B-Movies).

That would have been one big waste of an amazing blogger . . . .

Lust

I think the most evil word in the English language is “deserve.”

  • “You deserve a nice car.”
  • “You deserve health care that someone else pays for.”
  • “You deserve that stereo – you work so hard.”

When raising my kids, I wouldn’t allow them to use that word.  When you do, you create a foundation for your desire for an item, which in Actual Sin terms would be Lust.

Needs

Modern life has increased the level of needs that we have in an amazing fashion.  If you look at the following list:

  • Electricity
  • Internet
  • Phone Service
  • Mobile Phones
  • Natural Gas
  • Multiple Cars for a House
  • Cars
  • PEZ®
  • Air Conditioning
  • Netflix©
  • Facebook™
  • Faster Than Light Travel
  • Wireless Keyboards

None of those things were invented before last Thursday.

Okay, they were here last Thursday.  But how many on them didn’t exist before 1990?  Before 1950?  Before 1900?

These things aren’t needs.  They’re nice – some of them amazingly nice.  You can live amazingly well without them, as humanity did forever before 1900.

Reassess your needs** – not only of the services above, but of anything that doesn’t make your life better.  Half the games that are available on the smart phone are designed to sell you or sell something to you.  Either way?  You lose.  Except for Candy Crush®.  That’s just fun*.

*I have never played Candy Crush™.

**If you don’t want to have electricity and your wife disagrees, it would amuse me if you used me as a source.  It would NOT amuse me if she came to my house to complain.

Sloth

I’d write more about this . . . but I’m just not feeling it.

Just kidding.

Don’t ignore your money or financial situation if you’re lazy, like me.  I put in place systems so I wouldn’t forget to pay bills monthly.

It’s a secret, but I’ll tell you because, you know, we’re cool, right?

It’s a calendar.

Pay your bills on time.

Otherwise?

You get what you deserve, which will be penalties, fees, and interest.  You can use deserve in this case.  Because you deserve it.

Sinner.

Readers Write: Early Retirement, Health Care, Canada, and Averting A Ben Affleck Marathon

Ricky:  Boys, what is up with me getting shot with three darts, and it didn’t even affect me?  I must be like a superhero or something.

Julian:  Maybe you’ve got so much dope in your system, you’re immune, Rick.

– Trailer Park Boys

DSC00043

See, your health care dollars are being spent on useless signs!  An outrage!

It’s always nice to get feedback about the column in a letter that doesn’t begin with an anatomical impossibility.  I mean, how would my head even have gotten in there in the first place?  And what does my mother have to do with anything?  But, I thought this would be a great chance to take a few excerpts from the letter and mix with other communications I’ve had to revisit the topics of early retirement and health care from last week (Early Retirement: Things to Consider (cough Health Care cough)).

Comments in quotes are from my friend.  Comments in [brackets] are from me.  Comments in purple are a figment of your imagination.  You should talk to someone or cut back on the recreational stuff.

“So, I laughed when I read this post yesterday.  I’ve been spinning off after reading the NY Times article on the FIRE movement and Mr. Money Mustache and others – and wondered if you knew about them… of course you did!”

Yes.  John Wilder knows everything that a mortal man can know, with the exception of how to properly mud and tape drywall.  That’s magician/wizard-level skill.

“Since I’m new to MMM [Mr. Money Mustache – link to him here-JW] and others in the FIRE [Financially Independent, Retiring Early] community I was curious and excited, and then realized that I’ve known versions of people like this since my youth [but] they just seemed like weirdos at my parent’s church who recycled aluminum foil from pot luck dinners, rode tandem bikes to church, the husband hired himself out as a handyman outside his day job, and rode his bike to job site with his old timey tool box, etc.  They seemed cheap, not enlightened, but it looks like they were on to something!”

If you’re going to be rich, a good thing to be is . . . invisibly rich.  No private plane.  No flashy cars.  Just the satisfaction of knowing that you actually own the ’04 Ford™ Taurus© in the driveway of the nice but modest house.  And this avoidance of spectacle also tends to reinforce the concept of not being a slave to your desires or needs for consumer products.  Except for drones – you need a drone – life is not worth living without a drone.

I recall living in Houston and sitting at the stoplight in my three year old Ford® that I got for $12,000 (cash) next to a $180,000 Mercedes® SLWhateverX, and thinking . . . mine is paid for.  I don’t know if theirs was (my bet is that it wasn’t) but I knew that mine was.  And that I got to live with the lack of stress associated with no payments on a car.  I felt this way when I was driving $2000 Chevy™ Lumina©, too.

“While many [Early Retirement folks] got their start in higher paying professions like software engineering or investment banking, and then consciously live on 30-40% or less of their income, it does seem like a movement geared to minimalist millennials with few obligations.  I can live on 60% of my pay without dipping into savings, but much less isn’t possible with obligations of a relatively cheap [Expensive Home Area] mortgage, frequent trips to [Home Area], living in a 65 year old house, and maxing out 401K contributions.”

Yes.  Agreed – at various stages of my life I’ve been down to my last $50 in the checking account – with a pretty hefty negative net worth.  And, yes, obligations cost money.  But almost all of the obligations we take on are (outside of death, child support, alimony, and taxes – but I repeat myself) voluntary servitude.  And it’s okay, as long as you realize that the servitude was entered into . . . voluntarily.  Unless there was tequila involved and she looked pretty after enough of it.  Thankfully, since 2005 or so, I’ve been on the other end of it (wealth, not tequila goggles), but in large part that was due to severing that voluntary servitude, either through paying down debt (student loans) or not getting into debt (new cars).

“[Specific Investment Stuff] Plus, I like what I do and where I live.  [More Specific Investment Stuff].”

This is the most important line in the letter.  If you love what you do, and like where you live, why would you even consider retiring early?  Financial independence is nice, but if you’re gonna keep working because you want to and can save a nice chunk of cash while fully funding a 401K, why bother hurrying it?

“[More Specific Investment Stuff and Personal Stuff] So how to build wealth when you still have obligations and don’t feel confident on putting your money to work in the market, or buying real estate in distant locations, etc.?”

Cash is a long term loser – but it sounds like you’re funding your 401K to nearly the max.  I’m not going to get into specific investment advice on the post (okay, ammunition, PEZ® and panty hose are always winners) but the first part of wealth is reduction in need.  Just like the most expensive food in the fridge is the food you throw out, the biggest wealth destroyer is stuff you don’t ever use.  Like that stupid drone.

And, as for wealth?  [Spoiler Alert] If we don’t fix health care, our financial system will implode (more below).  Oops.  Does that make me a Debbie Downer?  If so, do I have expanded restroom options?

“And then you hit the big nail on the head . . . “

Naturally.

“Health care.  Our system is a mess and many 30-somethings are choosing to go without coverage in order to save more.  That’s not an option at my age either, and I wonder how the FIRE folks living on the extreme cheap lifestyle will cope when they hit their 40’s and beyond as insurance rises beyond affordability.”

He ended with a note that certain countries seemed to like government-run health care.

To be as clear as I can be using the English language:  Like a Bush/Stalin lovechild, our hybridized system of health care combines the worst parts of rent-seeking crony capitalism and nanny-state big government socialism.

Let’s take the parts everyone likes:  Everyone must be treated at an emergency room regardless of ability to pay, government subsidies, and no pre-existing conditions.

Sure, everyone likes this!  Sounds compassionate (with other people’s money)!  Heck, if I were irresponsible, I’d like it, too.

But it sets up the system where emergency rooms are clogged with people with minor conditions because they can get free treatment.  It’s okay.  The people who actually pay bills to the hospitals can pay for them, too, right?  So, they pay for their care and the care of others.  But then they’re taxed so that they can pay for insurance for others.  And if there are no pre-existing conditions on health insurance, heck, don’t sign up until you get really sick or old, thus making insurance for people (like me) who have had it their entire lives amazingly expensive.  But it’s okay, the CIGNA health insurance company went from a high $20’s stock when Obamacare passed to a stock that is worth $200 today, a 600% to 700% increase.  Obamacare really stuck it to insurance companies.

No.  Insurance companies wrote Obamacare.  And don’t get me started on hospitals or prescription drug manufacturers.  While pretending to be a portion of the capitalist system, they really aren’t – they make use of government power to make rules that would be blatantly illegal for any other business.  Imagine a taking your car into the auto mechanic and getting a bill of $500 for a $5 belt.  Or a bill from a consulting mechanic who just walked by and asked if the car was doing okay.  And then drive off with the original problem not solved, and then bill your for your Taurus® giving birth to a Kia™, when everyone knows that a Taurus© identifies as male.

I don’t like socialism, but it appears we’ve socialized the responsibility while making the responsible pay with little to no benefit while corporate profits explode.

How does Canada do it?

In my YouTube® feed a video popped up about Canadian healthcare.  In it, a video pundit named Steven Crowder went to Canada and tried to obtain treatment (with his Canadian friend) for a variety of minor ailments.  No dice.  Hours waiting, and nada.  This is a similar story that I’d heard from others, so I thought I’d ask a friend who is Actually Canadian and eats nothing but back bacon while drinking Molson® and Moosehead™.

She loves their system.  Her mom had cancer, and got prompt treatments.  They even picked her mom up and dropped her off from her chemotherapy sessions.  And I hear if you’ve had a heart attack the system works very well.  And the care is good.

breakingcanada

This explains why the only good television from Canada is Trailer Park Boys.

But my friend also talked through the darker side that Crowder talked about – long waits – months for minor surgery like fixing a bum knee.  A full day to get a prescription for an ear infection.  Every system has a mechanism for rationing.  In a true capitalist system, it’s money.  In a socialist system, it’s something else.  In Canada?  Minor pain and time.  But like a year of minor pain – sort of like being forced to watch nothing but Ben Affleck movies for a solid year.

Are taxes higher?  Sure.  It isn’t a pure socialist system, and I haven’t dug into the darkest side, but socialized medicine eventually (as resources dwindle) becomes a game where resources are rationed more aggressively.  Except for the leaders – they still exempt for themselves the best of everything.

Canada’s system does have a safety valve – you can go to private clinics, too.  And pay cash to avoid the Affleckathon.

All of the above still sucks.  But it’s still better than the thing we have today.

But is there a capitalist solution?  Yeah.

I won’t go through the details, but Karl Denninger (LINK) has put together the “most” free-market alternative to our current system.  It doesn’t do like I would (letting folks die in the street is a big incentive to get insurance and drive costs down, plus it would mean much shorter lines at the checkout at WalMart®) but, would manage to save the financial system of the United States if implemented.  What would we lose?  High profits for insurance companies.  Huge numbers of bureaucrats.  High drug costs.  High insurance costs.

Do you lose exemptions for pre-existing conditions?  Yup.  But if you have insurance and have less than a 60 day lapse, those pre-existing conditions remain covered like they were in 2004.

It’s a good system, and necessary.  Because if we don’t fix healthcare?  It’s not gonna kill us.

It’s going to wreck the entire financial system of the United States, as I write about here (More Budget Doom, The Rolling Stones, an End Date, and an Unlikely Version of Thunderstruck).

So, no biggie.

Early Retirement: Things to Consider (cough Health Care cough)

“But they make wonderful patients:  they have excellent health insurance and they never get better.” – Frasier

DSC00042

Fairbanks Memorial – they didn’t charge extra for ice.

Although I’ve discussed Early Retirement before here (Frugality, Financial Samurai, Mr. Money Mustache, and Early Retirement Extreme) I thought that it would be good to revisit the topic, primarily because I have a spreadsheet.

What kind of spreadsheet?  A crystal ball spreadsheet, one that predicts the future, all the way until 2081 when the ice sheets have melted and the dinosaurs have returned.  I’ve maintained this spreadsheet since 2014 or so, and it’s been very accurate for predicting my net worth over the course of four years.  I used it to decide (once upon a time) whether or not to quit one job and move to another.  Spoiler:  I didn’t move jobs.

The real reason I didn’t change jobs was fairly simple:  the spreadsheet told me that within three years I would have enough money that if I decided to chuck it all and get a job as say, a school teacher for a few years, I could continue to live the dissolute lifestyle awash in PEZ®, long essays, and regret to which I had become accustomed with no changes.  But there is a faction that sees a more radical idea:  just retire early.  They even have an acronym for it:  FIRE – Financially Independent, Retiring Early.

One of the biggest advocates of that is still Mr. Money Mustache.  MMM as he is affectionately known to his “Mustachians” retired several years ago, and has been blogging about it since.  His blog is exceptionally popular (LINK).  One secret of MMM is that he, by choice, has created a lifestyle of voluntary low-spending, i.e., he’s cheap.  By cheap?  His family has only one car, which they rarely use.  Mainly he uses a bicycle to go where he needs to go.

This is a fascinating idea.  You gain financial independence not by having the biggest pile of cash, but by having the smallest pile of needs.

For example:

I have a stack of books that is literally over 12 feet (143 meters) tall of books that I’m planning to read.  They’re stacked up by my bedside.  They’re stacked up on a bookcase near the bathroom.  They’re stacked up on my dresser.  And I get several new ones every month to replace the ones I finish reading.  And this doesn’t account for my library, which houses a collection of thousands of titles on every subject from tanning a hide to hiding a tan.  When we moved from Alaska to Texas, the movers set a company record for number of boxes packed in one day AND amount of weight packed in one day.  Reason?  Books.

Mr. Money Mustache would (probably) say:  “Why are you spending money on books?  There’s a library not two miles from your house that has a decent collection, and if they don’t have the book you want they can get it through interlibrary loan.  You could even get your fat butt on your bike and go down there to get a book and lose some weight in the process.”

He’s just that kind of party-pooper, but that would also impact my love of gadgets and gizmos that, ultimately, aren’t worth the time and money that I spend on them . . . except the drone, which is really, really cool.  Everyone needs a drone, right?

But let’s look at the major categories of spending and consider them through the soup-stained Mustachian paradigm.  Each of these topics could be a blog post by itself (and some have) but we’ll skim them today:

Mortgage: 

Don’t have one.  You probably have more house than you need, which causes you to spend more on heating and cooling than you would need to if you had a house of human proportion.  Pay it off so you’re not paying interest to a bank and can keep the money yourself.  But you still have to pay taxes and I’d still suggest you have insurance on the place, since it protects you in several different ways, especially from certain lawsuits that could dig deeply into your cash.

Home Location: 

Why live in an area that causes you to have to spend a lot of money?  Why live in an area (if you’re still working) that causes you to drive lots of miles to a job, which eats up both money in commuting cost and your life in drive time?  I know!  Location!

DSC01318

This was an awesome location.  Wonder why we sold it?  Oh, yeah, piles of money.

Cell Phones: 

Why have a big data “full everything” when you can have a phone that costs less than $40 a month that gives you some data as well as more talking than anyone actually does on a cell phone?  And the need for the newest iPhone©?  Probably not so much.

Satellite/Cable Television: 

We have satellite television, along with a DVR box that records television shows so we don’t have to spend time watching them.  But let’s look at television . . . do we need a subscription to DirecTV® and Netflix™?  The number of things that I watch on satellite is dwindling – Silicon Valley™, Game of Thrones©, Better Call Saul™, The Last Ship®, sure I watch those when they’re on.  But most of the year, they’re not on.  And I can get most things on Netflix™ or Amazon®.  Do I even need satellite or cable anymore?

Landline: 

When I was a kid and the phone rang, I’d jump off the couch, and run to the receiver to pick it up.  It was an event!  Now, in a day where communication follows you to every crevice of your life, when the phone rings, we rarely even pick it up unless the phone announces that it’s Grandma.  Wondering why we even have one . . . oh, yeah.  Grandma.  And the phone is free with the Internet.

Food: 

Food is big business.  And an even bigger scandal.  How much food do we buy that we end up never eating?  Since we have teenage boys in the house, the answer is “very little.”  It’s been my saying (for forever) that the most expensive food that you buy is food that you don’t eat.

The second-most expensive?  Restaurant food, especially fast food.  I can buy three pounds of delicious ribeye steak for about $30.  Dinner for our family at Taco Bell™ (remember that we have teenagers) costs about $40.  Full disclosure, I account for a chunk of that $40 myself, but steak is so much better than a Nachos Bell Grande®.  And I can buy six pounds of ribeye for $60.  And we can eat for several meals on that, versus one trip to a nice restaurant, which would cost about $120-$180, including tip.  I maintain that I can eat better food more cheaply if I prepare it at home myself.  And by myself, I mean (except for grilling) The Mrs.  And as for high-priced Internet meal kits?  Wal-Mart® is our meal kit.

Cars:  

Mr. Money Mustache suggests having one or zero of these.  And he has a huge financial point.  Cars depreciate, so they’re crappy investments.  Cars require taxes and licensing and insurance cost annually, so even if you own one, keeping it around so you can drive it costs you annually.  And my family has an “N+1” philosophy about cars, where “N” is the number of licensed drivers.  Why?  We drive used cars, and they need maintenance at a higher rate than brand-new cars.  So we have a spare.  If we were retired?  One car would probably be enough (assuming we didn’t have the teenage boys in the house).  And, yes, a car is required for the rural area that we live in – you really couldn’t bike your  ten year old kid to a wrestling tournament (in winter) that’s 100 miles away . . . so we’d need at least one car.

DSC02117

I’m hoping this one is paid for.

Home Maintenance:

If you own a home, something will break.  At my house, that seems to happen weekly, and it’s more than me having my 19th nervous breakdown.  Some things get fixed when I get around to it, like when one Wilder child broke the bannister.  It sounds like I’m blaming the kid, but I’m really not – if the bannister had been put together correctly in the first place (or fixed better than I did when last I fixed it) then it wouldn’t have broken in the first place.  This bannister got broken, oh, six years ago.  It still swings loosely.  I’ve never even been close to being motivated enough to fix it.  But when the air conditioner pan rusted out and started leaking condensed water onto the bathroom carpet?  Yeah.  Fixed in 12 hours.

And I estimate that immediate repairs (not fixing the place up) that are required to make the place habitable are probably about 1% of the home value each year.  If you’re handy and can do it yourself?  So much the better.  When the hot tub “brain board” fried?  I consulted with a hot tub repair guy and swapped it out myself – saving about $200 in the process.  When the flame rollout sensor on the furnace went out in winter?

I paid to have that done, since the consequences of screwing that up involved mortality via explosion or asphyxiation if I screwed it up.  $25 part, $50 in labor, and fixed that afternoon.  My rule is:  if it doesn’t require real expertise and can’t kill anyone?  Sure, I’ll try that.  I’ve saved thousands by doing that – but I think (after putting two complete roofs on and fixing two others), I’m done roofing.  Enough roofing.

Medical Insurance:

Medical insurance is the biggest variable to deal with for anyone attempting to retire early.  I will say this gently:  the health care system in the United States is the most unholy mixture of the worst parts of socialism and near-monopoly capitalism on the planet Earth, and that’s the planet that has the Department of Motor Vehicles AND school cafeteria lunches.  How is it messed up?  On the socialist side:  A hospital is forced to treat anyone who shows up.  Anyone.  By definition, if you don’t have any money, all the hospital can do is send you bills and not take the money you don’t have.  So, your incentive?  To go to the emergency room whenever you get a sniffle, so everybody who has insurance can pay for you.

On the evil capitalist side?  Hospitals don’t have to let you know what they’re billing you, or why.  Your ability to even remotely influence your bill is nearly zero.  From Karl Denninger’s post on how to fix healthcare – emphasis in original (LINK):  “. . .  the practice of charging someone $100,000 for scorpion antivenom in Arizona when the same drug from the same company is $200 for the same quantity 40 miles to the south and across the Mexican border.”  Denninger’s post has a list of similar issues – and common sense solutions that we’ll never undertake.  Why?  Look at the stock prices of the drug companies and the insurance companies.  Who would want to mess that party up?

MMM discusses his vexation with insurance in a pretty good post here (LINK).  Since I’m working at a job and have crappy insurance from them, I’ve not scouted the market too much – but my last look at the market mirrors MMM’s.  But in addition to the horrible composition

But up until you are ready for Medicare (and until your spouse is, too, which is a consideration for me, having married a younger – but still legal in most states! – woman) you’ll have this risk.  Medical insurance costs are estimated to rise between 15% and 30% next year.  And 7% thereafter.  Said simply, medical costs can’t continue to increase at that rate.  And when something can’t continue?  It won’t.  The system will break.  Insurance companies will go bankrupt, as every body . . . walks away.  When people can’t pay for insurance, they won’t.

But if you’re retired, have insurance while you can until the system breaks.  After that?  The rules will change again.  This will happen even if you are working.

So what does it all mean?

Retiring early has risks, but, so does life.  One thing I’ve seen is we certainly don’t know what’s around the corner.  If you could retire early and found out later you had a terminal disease, wouldn’t it be great if you retired early?  No.  You’d still be dead.  Seriously.  Dead is dead.

Retire early only if you don’t find what you’re doing fun.  If you’re having a blast at work and it has meaning to you, keep doing it until you die.  Why retire from a dream job?

I mean, who else would watch Johnny Depp’s finances for him?  By the way, what’s the best way to clean the money after having a money bath?

Asking for a friend.

Scams and Cons at Any Age, Part II: The Canadian Menace

“Blame Canada.” – The South Park Movie

canadianscam

Please help stop the senseless slaughter of Canadians that voluntarily give their lives so your pancakes can be tasty!  I sent them $20 real dollars, not those Canadian ones.  Or . . . could this be a scam?

Last Wednesday we discussed scams that you’ll run into at different ages.  We made it from birth to age 22 and listed some of the scams that you’ll be exposed to (Scams and Cons at Any Age, Part I, as told by Admiral Ackbar).  Today we’ll keep going, and if you don’t find the information useful, I promise a full refund of all money that you’ve paid directly to me to read this blog (note to self:  when I edit this stuff into a book remember to edit that last sentence out).

Early Career:

You’ve graduated from college, or have opened a small but successful business, or you’re pursuing a trade like welding and you’re 24.  Life is wide open!  You’ve successfully avoided college debt through one way or another, or maybe you have a modest debt that you can repay without too much difficulty every month.

Let’s go get scammed!

The easiest way to get legally scammed is your choice of partner.  If you’re with a bad one, you’re going to end up paying for it for (potentially) decades.  If your spouse is particularly unemployable and you are really employable, some states (the Internet in 2018 says Connecticut, Florida, New Jersey, North Carolina, Oregon, and West Virginia) allow for lifetime alimony.  So, if you have the bad sense to marry a gold digger?  It will outlive the cat and could last as long as that herpes he or she brought home.

canadabirth

How birth works in Canada.  Since all children are socialist and owned by the government, it’s okay if you pick up several that aren’t yours to raise if you live in Canada.

Another way (men only) you can get scammed is through paternity.  Yes, you can be found legally liable to raise Some Other Dude’s Kid (SODK) if your blushing bride is a wanderin’ if you’re married when she gives birth and you claim the kid, or don’t object within some arbitrarily short period of time.  And lets’ face it, babies all sort of look the same, so the chances of you missing that deadline are pretty significant.  In the worst case scenario, you end up paying child support and alimony when your wife starts shacking up with the Some Other Dude.  Yeah, I don’t personally know anyone this happened to, but I’ve read about several cases.  And this is perfectly legal in every state.

Thank heaven you’re not French – they explicitly have outlawed paternity testing so it is illegal to check to make sure your mademoiselle hasn’t taken to the boudoir with some other Pierre.   But that’s okay, being a father is just a social construct, right?

canadianstowork

The easy way to get to work in Canada isn’t by mass transit, it’s by moose transit.

The next big scam is car purchasing.  I’ve written at length about my philosophy on car purchasing.  You can find some representative posts here plus results of my bad experiences.  Give them a read – they will save you thousands of dollars . . .

Repeat After Me: Never Buy a New Car (and other lessons for young adults)

“Wreck. Big wreck.” – Long, Sixteen Candles

Will you buy a Tesla™ 3?  You already have.

I’m gonna tell you about an accident, and I don’t wanna hear “act of God.” – Jack Burton, Big Trouble in Little China

Outside of bad relationships, I think new cars are the biggest scam that a young early career person faces.  What kind of a bargain is a vehicle that you drive off the lot that immediately becomes less valuable?

And if you’re reading this blog, the chances of you falling for a Nigerian-Prince level scam are nearly zero.  The writers of those scams specifically put misspellings into the emails so that smart people ignore them – the laughable quality and easy verification that the scam is a lie the point of the scam in the first place.  The last thing the scammers want is a smart person to deal with – the email itself is an IQ test.  Only the scammable need apply.

As it is, the “Nigerian-Prince” scam accounts for 48% of Nigeria’s gross domestic product.  And I hope you didn’t fall for that fact that I just made up on the spot – ha, I bet you believe that there’s an actual Nigeria now.  Ha!  But THEREZ GOOD newS, I have SUM OF $48 MILLION USD that UNKLE BRADLEE left in trust for me and YOU ONLIE NEED TO PROVIDEE your bank account routing information for me to wire it 2 u.

Middle to Late Career:

You’ve reached your peak earning potential.  You’ve been scammed a few times, like me, most of them completely legal versions.  For the most part, you’re either broke or you’ve grown wary of anything that sounds too good to be true, like Social Security or that George R. R. Martin will ever finish the Game of Thrones™ series (Actual Book Series Title:  An Infinitely Long Story Consisting of People Talking in Rooms Because I Can’t Figure Out How to End It Song of Fire and Ice®) before his heart finishes him or that there’s a new version of The Gong Show™.  There is, in fact, a new version of The Gong Show® and it is fabulous.  George R.R. Martin, however, appears to be doing absolutely anything but writing.  Maybe he could be a judge on The Gong Show©?

canadadictator

It seems as if Dr. Phil has been busy?  I like the new Canadian flag, a LOT!

Dating scams seem to hit this group a lot.  Why?  After being married, and now being single, scammers can target the richest age group with a pretty significant emotion:  love and longing.  I’ve read on the Internets about folks spending tens to hundreds of thousands of dollars on their never met in person Internet lovers.  While some of these folks do get prosecuted, it’s pretty hard to convict them unless they’re fraudulent in a pretty flagrant manner, especially since the victim willingly sends the money, and, in some cases, tries to keep the relationship going even after the scam is exposed.  I guess true love can’t be stopped, even by borderline abusive behavior and financial fraud.  Now if the scammers are ugly . . . ?

Investment scams are also a big deal, but instead of love, they focus on greed.  A great example of this was Bernie Madoff, whose name alone shows that God has a sense of humor.  Really, you invested with a guy whose name sounds like “made off”?  Guess that explains why you dated Gina Cheatintramp in high school . . . .

But investment scams don’t have to be out and out lies and fraud – they can be more insidious.  Is your broker really working for you, or are they working to maximize their commissions?

I’d write a lot more here, but this post is already nearly at length.  Perhaps this will be a future post.  Or not.  It depends on if I think I can makes something SO BORING as fees and taxes on investment funds humorous.  Dunno.  Maybe if we represent the investment funds with swimsuit models?

Retired:

Fear is the major leverage point of scammers for older folks.  And I’ve seen it in person.  Pop Wilder became (as he grew older) grew correspondingly more fearful.

Why?  My opinion is that older folks have fewer options.  It’s not like they can decide:

“You know what?  Being old and retired sucks.  I’m going to leave it all and become an 89 year old lumberjack in Saskatchewan and start a Canadian rock band called Mötley Canüe and chase 19 year old Canadian girls.”

groupies

Pictured:  Canada.  Not Pictured:  Groupies.  I guess the concert would have gone better if we actually had instruments.  Or could sing.

So, Pop Wilder was complaining about expenses – that was his biggest complaint about retirement – his expenses went up and his income didn’t.  I was helping out financially (a little bit) and he explained that his prescription drug costs were astonishingly high.  At the time, the Internet bubble still hadn’t popped, so places like superprescriptions.com (I made this domain name up, so if you go there and are bombarded with advertisements for cheap, dodgy Chinese Viagra®, well, this is a post about getting scammed) were offering his prescription drugs for about 20% of the price as his local pharmacy.  I put together a list – his prescription bill would drop from $700 to about $150 a month.

He wouldn’t do it.  He was more afraid of changing (“what if they don’t talk to the medicine in a soothing voice each night like the local pharmacist does?”) than he was of losing $550 a month.

canda a eh

Imagine an alternate universe where everything is exactly the same, but Canada is spelled Cunudu.  I’d pay to live there.

But older people have another vulnerability:  the world has changed so much that their effective ignorance goes up daily – who can keep up with all of the change in the world?  And it’s started to hit me, too.  When I have a technical issue I just hand my laptop (or whatever gadget) off to The Boy or, increasingly, Pugsley, and they fix it, generally at lightning speed and with competence.  As an example of my reluctance to change technology, my phone is four years old, which might as well be a dinosaur (not a cool one, but one of the lumpy ones that lives in a swamp) compared to the newer phones on the market today.  So, I guess I’ve got a bit of that technophobic bug myself.  I even use my mobile phone for phone calls on occasion, which makes me super rare.

The only time I ever heard Pop Wilder drop the F-bomb was in conjunction with his computer:  “It doesn’t work.  It’s all f***ed up.”  The sheer frustration combined with the unexpected profanity has made this a go-to phrase for The Mrs. and I whenever some complicated thing in our house just refuses to work.

This was a regular occurrence for Pop Wilder.  I think he would (nearly monthly) take the huge, hulking tower (that the local PC people told him was the minimum system he needed to hook up to the Internet) back to their store.  They’d make some minor software changes to the Windows® settings that Pop Wilder had inadvertently messed up, and charge him $150 for dry cleaning his hard drive or lubricating his computer chip.  Every four months they’d change out some larger part for giggles.  After the computer worked again, they’d phone up Pop Wilder and he’d drive thirty miles to go and get it.  They both walked away happy.  Kinda.  Again, a scam, but a completely legal one.

Over all, I think the best advice is still this:  Be honest with yourself.  Be honest with the world.  It’s not a bullet proof way to avoid being cheated, but it’s pretty good.  But someone, somewhere, sometime is still gonna cheat you.  Legally.

I blame the Canadians.  It’s not like they’re really at fault, but they’ll still apologize.

Oh, still not a financial planner or investment dude or anything.  MAKE YOUR DECISIONS AT YOUR OWN RISK.  Really.

Scams and Cons at Any Age, Part I, as told by Admiral Ackbar

“It’s a trap!” – Return of the Jedi

admiralscam

Admiral Ackbar knows the score . . .

Con games are as old as lying, which is to say as old as people.  The “con” in con game stands for “confidence.”  The entire point of a con game is to gain the confidence of your victim or “mark” so that they don’t suspect that something is wrong.  True story:  I was at the State Fair here in Upper Lowermidwestia some years back and one of the carnival workers would try to lure people to play the carnival games by saying to passersby . . . “Hey, Mark.”  I assumed he meant Mark Twain, who had been travelling with us:

mark twain

But in reality he meant me, which was good because Mark Twain is only imaginary, and I would feel pretty bad if other people saw him, too.  He was open and outgoing that I was just a mark to play his game and lose money.  I fooled him!  I played that stupid basketball game until I won the medium-sized stuffed animal.  Only cost me $75 in tickets to finally win it!

And there are plenty of other names con men call the mark (thanks to Wikipedia for a nice list):  sucker, stooge, rube, or gull (for gullible).  There are lots of other names for the con game as well, but con game or scam will work for our purposes.

The perfect con game (we’ll just use “con” as a noun from here on out) should just look like another event in the mark’s life.  Heck, it might even be something that the mark brags about.  The idea is that the mark willingly gives the con man (or grifter) his money, and then, for whatever reason, doesn’t realize he’s been cheated, or, if he does realize he’s been cheated, won’t talk to anyone about it.  In many cases the actual con game sounded much more difficult than working, and a good grifter might make even more money as a politician or salesman with poor scruples (I crossed the one out because I didn’t want to be redundant).

admwin

How do you avoid being cheated?  It’s hard.  The first concept is “you can’t cheat an honest man.”  Ideally, if you were to avoid everything you were to run across where the deal seemed too good to be true, you’d probably be able to avoid 90% plus of the scams that are out there.  The other thing is being properly skeptical of claims and looking for unbiased verification.  However, the very best scams attempt to provide you with unbiased verification in the form of biased websites, biased experts, and situations that apply pressure to make a decision . . . now.

As a rule, if I have only three hours or some other arbitrarily fixed and short timeframe to make almost any decision, the answer is “no.”  I’ve never felt bad about that . . . rule, except for the experience that made me set that rule . . . which you can read about below.

But different scams are appropriate for different ages.  I can swindle a three year old all day long, but the big problem (and the reason I don’t spend my day swindling three year olds) is that three year olds have inherently bad credit and a very limited access to large amounts of cash.  They’re certainly gullible, but they’re crappy victims.  Rule number one:  never spend time swindling the broke.  I learned that lesson only after accumulating about 5,000 drool covered Happy Meal® toys.  Stupid toddlers.

starwarsscam

Sometimes it’s not a scam . . . 

Also, despite the jokes I might make, this is a how to NOT get swindled post.  Knowledge is power.  Or something.  Anyway . . .

Teenagers:

Teenagers are only slightly more difficult to swindle than toddlers.  They simply don’t know much.  But unlike toddlers, they think they know everything, which makes them easier to swindle.  But also like toddlers, teenagers don’t have all that much that’s worth taking.  I’d avoid cheating them – it’s really not sporting.

Here’s my story of getting grifted as a teen, from my blog post on cars (Repeat After Me: Never Buy a New Car (and other lessons for young adults)):

(Backstory:  my car was rear-ended by a drunk teen.)  The car, literally owned by me for less than two months needed a lot of repair.  I went in to find out when my car would be done.  The manager (the father of a girl that had graduated a year before me) invited me into his office.  He had a fairly long speech that he shared, indicating that he had found some cheaper parts than he had originally quoted the insurance company, and, well, my $200 deductible could go down to $40 if I only paid him in cash, right then.

I’m not sure how he knew that I had exactly (and only) $40 on me at the time, but his cash radar was perfect.  I pulled out my wallet (brown nylon with a Velcro® strip that kept it closed) and pulled out my $40 and handed it over.

I felt vaguely dirty afterward, like I’d done something wrong.  Honestly, I still fill icky about it writing this down.  The reality is that he probably just needed money his wife couldn’t track for booze or lunch and saw an 18 year old coming . . . and decided to separate me from all the cash that I had.

Yeah, not very sporting, right?  But, again, all it cost me was $40.  Much better to scam are . . .

College Age/Young Adults:

The biggest scam for many kids is college.  And it looks so legitimate.  But college is the perfect scam because it involves big money.  Tuition isn’t cheap, and is rising far faster than inflation says it should.  Beyond that, the current average grade at Harvard is an A minus.  Let that sink in.  Nothing says scam like a diploma mill, and if Harvard is a diploma mill, what chance does Lame Duck County Community College have to enforce anything resembling an academic standard?

admwife

Additionally, college has entered into the realm of “being the new high school” since employers are looking for smart employees.  College at least weeds half of the students out even with the high average grades, so it’s at least some sort of test.  It would be far cheaper for businesses and the economy as a whole if we just allowed IQ or intelligence testing of employee candidates which correlates well with not only intelligence but also with diligence.  Alas, for some reason it seems to be some sort of allowable bypass to only hire from colleges that only accept kids with great ACT or SAT scores (which are great proxies for IQ).  So, instead of an IQ test that takes half an hour or so and costs a few hundred dollars, kids now have to shell out tens of thousands to hundreds of thousands of dollars to make them candidates for top positions.  And don’t even TRY to pass the bar (outside of California) without a law degree approved by the American Bar Association . . . .

Additionally, college has the advantage of generally not being paid for by the person getting the service.  Often, it’s paid for by parents.  When it’s not, it’s often paid for by student loans.  Buy, you say:  “John Wilder, the student has to pay back the student loans.  Aren’t they responsible?”

“Nice hat,” I respond, “it must keep the sunlight off your pointy head.”  Seriously, have you ever met an 18 year old that could intellectually conceive of paying off a debt of tens of thousands of dollars over the course of a decade or more?  NO!  We don’t allow these people to drink because they’re far too stupid.  But, yet, we allow them to make decisions that essentially grind them into servitude for the Academic-Industrial Complex.  Ohh, I need to trademark that phrase.

Another way that scams get you is similar to what happened to my friend Joe – I discussed this in a blog last year (Scams, Your Momma, and Cheap Speakers)

“So, guys, the most incredible thing happened to me,” said Joe.  “I was at a Burger King® and I had just finished eating.  I was walking back out to my car, and this guy in a van stopped me.”

I think I jumped in with something to the effect that very few good things happen when a guy from a van approaches you in a Burger King™ parking lot.  Joe ignored me and continued, “He had these speakers in the back of his van.  He had dropped them off at a rental, and he had mistakenly signed two extra out.  If he took them back to the shop, they would have fired him for checking the extras out.  These are $1000 speakers! Each!

“I got them for $300 for the pair!  They sound totally awesome with my stereo!  I had to run to the bank to get the cash, but I got them!”

I smiled.

I had just read in the local newspaper that there was a scammer group operating around the metropolitan area of Moderatelylargecity, East Westeria near where we lived.  They were selling speakers worth about $50 a pair out of the back of trucks at fast food restaurants.  Cash only.

I thought to myself – “Hey, Joe likes the speakers.  He really likes them.  And if you tell him it was all a scam, he’ll hate the speakers and feel stupid.  Is it hurting anyone to let him think he got a deal?”  Joe was a nice guy, and I successfully held back my inner jerk (on that far distant morning).

So, college age kids are just coming into their prime for scams.  I’ve heard that they’ve updated the old “speakers from a van” to include websites touting the brand of speaker that they’re “selling.”  In the information age, have to be ready for the 22 year old with a smart phone.

Amazingly, I’ve only gotten 22 years into my 78 year survey of how you will be cheated during your life.  I’ll continue this topic next Wednesday.

What is Wealth? Is it More Than Money?

“Aristotle was not Belgian, the principle of Buddhism is not “every man for himself”, and the London Underground is not a political movement. Those are all mistakes, Otto. I looked them up.” – A Fish Called Wanda

hallinoates

This may be the most important philosophical question of our lifetime, especially if you’re haulin’ oats.

The other day I was listening to the radio and the hosts (Walton and Johnson) were discussing wealth.  Since actual radio around Casa Wilder consists of a single AM station broadcasting crop reports and lean cattle futures and an FM station that is “All Hall and Mostly Oates, All the Time!”  Therefore?  We listen to radio stations on the Internet.  Walton and Johnson are out of Houston, but we also lived in Alaska, so we also often listen to a station we like out of Fairbanks.  Obviously, when the radio in the bedroom says it’s -40°F and the kitchen radio says it’s 85°F, there’s likely to be wind and a rainstorm down the hallway.

anteater

Maybe I misheard that lyric?

Anyhow, Walton and Johnson were discussing wealth.  They mentioned that a recent study showed that, in Houston, a survey said that to be considered “wealthy” you had to have $2.5 million dollars in net worth.  To be considered “well off” you only needed to have $1.4 million dollars – which is quite a bargain – many people work a whole year and don’t make that much money!

After a bit of research, I found the source of the story:  Charles Schwab®, the investment firm.  You can read the study here (LINK).  In San Francisco (according to Schwab©), it’s even more money than Houston to be considered wealthy:  $4.1 million.

Looking at the best numbers I could find, the median household net worth is about $100,000.  To be in the paltry $2.5 million Houston-wealthy club (versus the expensive San Francisco $4.1 million club), means that your household is in better financial shape than 96% of American households.

But that’s the problem with this survey – since, at most, 4% of the people taking the survey would be considered “wealthy,” most of the people taking it have about as much idea about how much money it requires to be wealthy as a monkey trying to understand Nietzsche.  I mean, apes read philosophy, but they just don’t understand it, Otto.  And I imagine people who aren’t wealthy don’t understand that, either.  The answer is just a bit more complicated . . . .

I’ve done about 70 posts on wealth, but I need to step back and ask that question:  what is wealth?  To say it’s purely a number is to show that you don’t understand wealth.  Money represents not a fixed number, but a possibility.

kissonlist

If you measure wealth in love . . .   

What is wealth?

Wealth is time.  In fact, if you go to the basic equation – your life is made entirely out of time – nothing else.  Your life literally is the sum of the things that you do with your time.  So wealth is doing what you want to do with your time, which means doing what you want to do with your life.  It’s entirely probable that a Wall Street investment banker with $10,000,000 in the bank from a job he hates and shrill wife with more implanted silicon than actual original equipment is less wealthy than a hunting guide who lives in a log cabin in Alaska who has less than $5000 in the bank.

In my case, I’ve traded a LOT of time for money in the past.  My theory was to work hard while I was young so that I could build my career so I could save enough money so that my family would be secure in the future.  You would say that working all the time is not a very wealthy (or in some cases healthy) thing to do, except . . . I loved the job I was doing!  In many cases it was stressful.  Difficult.  Uncertain.  Long hours.  And when I did an awesome job?  Yeah, it was like winning the World Junior Baking Championship.  Not that I can bake, or even that there is a World Junior Baking Championship, but I think you know exactly what I mean.

I watched the documentary Lynyrd Skynyrd:  If I Leave Here Tomorrow this weekend, and those guys simply loved playing music.  They’d do it all day long, even when they weren’t getting paid.  Being a rock star was awesome, sure, but it wasn’t the point.  They were wealthy as soon as they could get paid for playing small clubs.  Arenas were just the gravy.

And, yes, I’ve said in the past (and still maintain) that to support yourself, support your family you might really have to suck it up, buttercup, and work jobs you don’t like because an Alaskan hunting guide has really crappy health insurance and his spouse has neurohemoblastaphobia which can only be cured by a mouse egg (before the baby mice hatch) extract that’s been strained through bigfoot hair and breathed on by an honest politician.  Yes, it’s as expensive as it sounds.  Then you have to work the job you have rather than a job where you play guitar all day.

Wealth is freedom.  Could you quit your job tomorrow without having a new one and still meet all of your obligations?  For most people, the answer is no, either because the obligations are too high or the amount of cash they have is too low – 60% of people in the country live paycheck to paycheck.  However, sometimes it’s self-inflicted.

Some people trade their freedom for a car payment.  I’ve seen people who purchase a $60,000 pickup, and then have to pay $1,200 a month in car payments.  I don’t know about you, but my 4,000 square foot house has a payment of less than $1,000, so it’s not making me freer to be tied to a depreciating asset that I have to pay $14,400 a year for.  Plus insurance.  Plus whatever taxes the state would extract for a $60,000 vehicle.

I have a pickup.  It cost $6,000.  I paid with cash.  It didn’t cost very much because the car dealership was having a hard time selling a stick shift.  The truck runs fine.  Engine is a bit small, but 95% of the time it’s just being driven by a teenager to school and back.

But if your idea of wealth is a $60,000 pickup, I’ll never be wealthy in your eyes.

But I can be free without a $60,000 pickup.

And, no, I’m not a radical get rid of stuff and never buy anything sort of person – I’ve probably got more books on some topics than any library in my state.  And, I’ve bought more than my share of crap in my life, but very little of it has made me happy, and very little of it has made me a better person.  Except for the PEZ®, of course.  And I’ve been on some incredible vacations.

Wealth is time.  Wealth is freedom.  And your wealth is determined by things you “need.”

The less you need?  The wealthier you are, and the more choices you have.

oatsplan

College Funding, Value and Grade Inflation: Should Your Kid Go? Should You Pay?

“You had rich parents. You got to go to that expensive community college.” – South Park

DSC00157

If you do college right, you end up being able to travel to cool places.  Literally cool, like Alaska.  Do it wrong?  You’re stuck on some hot beach in Florida during spring break.

I’ve posted several times about college here, but mainly from the perspective of the student.  The other major perspective to catch is that of the parent – whether their child is asking only for advice (in a dream world – 18 year olds know everything so why would they ask an old person for advice?) or you are paying full tuition for them to attend Harvard®, you’re involved.  What questions should you be thinking about when they come looking for money advice?

I think the first and most important question is if your kid should go to college at all.  In 1960, it wasn’t a given that kids would go off to college.  Only one kid out of twenty would go to college and graduate with a bachelor’s degree or more.

collegepercentage

The line goes up and to the right.  So, everyone is getting smarter because here in America EVERYONE is above average!

And, possibly, some folks weren’t going to college because they had been inappropriately excluded.  But now?  70% of high school graduates start college.  70%!

By definition, AT LEAST 20% of the people who go to college are below average in high school.  And 84% of kids now graduate from high school.  Assume the dumbest drop out (not really a good assumption, but we’ll go with it).  Let’s assume that the dumbest of the high school graduates don’t start college (again, not a good assumption, but we’ll go with it).  Still, 20% of the people starting college would then have an IQ of less than 100.

The overall college graduation rate is now 60%.  Which is ludicrous.  Even more ludicrous?  At Harvard©, more than half of the students have a GPA of 3.67 or more, meaning even at Harvard™ the challenge isn’t surviving Harvard©, it’s getting accepted.  Admittedly at Harvard the average IQ is 125 (decent), but it sounds like the grade fairy visits there often.

So, if your kid can get into Harvard™ (or Yale©) (or Stanford®) (etc.) they should go there.  If they’ve got decent study skills they’ll pass.  The reason you go to Harvard™ to learn, really, you can get just as good of an education at Iowa State© for much less money.  No, the reason you go to Harvard™ is to hang around with really, really wealthy people and make connections so that you’re hanging out with Mark Zuckerberg’s kid in 2032 or whatever.  If you’re besties with a Zuckerberg because you had a car and Daddy Mark wouldn’t buy him one so you drove him to strip clubs?  You’re set for life.  They will make sure you have an awesome career, even if it just involves hanging around with their kid driving him to strip clubs for a ludicrous salary.

zuckersippycup

Think what Mark Zuckerberg might have accomplished if only he had finished college at Harvard!

The second reason that your kid should go to college is that they’re studying some sort of real science (not a fake one like sociology or anthropology) or engineering.  You have to go to college, and since these degrees have (at least in the past) weeded out the intellectually inferior, well, they will generally lead to much higher wages.  Ditto being a doctor or nurse.  Now, as soon as we start asking how the bridge feels?  Yeah, engineering will be done for.  If we haven’t done that already.

replace bridge

See, this is an example of creative engineering.  I’d pay to watch people drive this . . .

But a lot of college degrees are worthless – college becomes a four (or five, or six) year day-care for those unwilling to head to real life.  And it costs and amazing amount of money for day-care.  I’d just as soon give the kid enough money and send them to France for six months, not because I like my kid, but I think that France should be inundated with mouthy self-entitled 18 year olds.  It’s my gift to them.

I used to think that all bright kids with good character should go to college.  I don’t think that anymore.  I had one kid I worked with (in a volunteer position).  I asked him what he wanted to do after he graduated high school.  He described a career option, where, as a journeyman, he could live in rural North Midwestia and still make at least $80,000 a year after five years, and probably more like $100,000 after the all the overtime that you can generally pick up is figured into this.  When he started his apprenticeship he already had competing job offers for when he graduated.

My knee-jerk reaction (programming wears off only slowly) was to tell him, “No!  Go to college!  You’re so smart!”  And if I had given that advice and he had taken it, well, when he graduated he’d have $60,000 in debt and (if he was lucky) would have to fight to get a $40,000 a year job.  His idea was way better.

So, consider, should your kid even go to college?

Let’s say that you decide it’s worth it.  College won’t be a four-year boondoggle filled with lattes and climbing walls and easy A’s – it will actually mean something.

How do you pay for it?  Do you pay for it?  Should you pay for it?

wonka-free-college

This is why I’m against government paid college.  Then you’d have to get two doctorates and dress in an outfit made of bigfoot hair and unicorn sweat to get noticed in a job interview.

Part of the reason that college becomes a long-duration fun-fest is the problem of skin in the game.  Kids are having fun at college – why would they want to end it?  The colleges are making great profit off the kids.  Why would they want to end it?  The only people who want to end it . . . are the people paying for it.

Incentives are very bad, indeed, especially if you’re the parent footing the bill for it.

I guess I have to leave it up to the parent, but there are other options (for many people) outside of paying for it or saddling your kid with a massive debt.  They could be a great athlete, and get a full scholarship.  And don’t kid yourself – some engineering and technical schools have sports teams and need people that can play reasonably well.  Not NFL® talent.  Not University of Alabama™ talent.  Just well enough to not get hurt against the smaller NCAA Division II schools they play against.

ROTC is another one.  ROTC is the Reserve Officer Training Corps.  It depends on the service, but in some cases they’ll pay for your kid’s college, train them to be a military officer, and then guarantee them a job.  The Army will be happy to take them as an active duty officer, or will offer them a slot in the Reserves.  For the Air Force?  If you’re Air Force ROTC, you’re going active duty.  The nice thing about the Army?  For one weekend a month and two weeks a year, you get your school paid for in just a few years of reserve duty.  Assume it’s four years, and that’s over a thousand dollars a day they’re paying you, and some people don’t even make that kind of money during a summer job!

Both The Boy and Pugsley are reviewing this option.  It would probably work well for both of them.

Of course, there are loans.  But these can backfire amazingly.  I was reading a few years ago about a guy who borrowed enough money to become a medical doctor.  Downside?  He owed upwards of $500,000, and wouldn’t be able to pay the loans off.

That doctor is gonna die in debt, because that’s just about the only way to avoid repaying a student loan.  Or maybe he could make friends with Warren Buffet’s kid?  Know where the strip clubs are?

Hmmm.