Had some (planned) other things come up, so one from the vaults that many of you might not have seen . . .
After World War One, the phrase, “Happy as a Hapsburg in Serbia” fell out of favor, as did the “Hair Smile” style of mustache. Or is that Herr Smile?
I’ve already told the story about digging out of debt. In retrospect, it seems to me that all of those stories end up sounding the same: “I weighed six hundred pounds, my kitchen floor was covered in dirty dishes and cat food, and I had $3.7 million in debt until I found Wildernetics© and the First Church of PEZology™. Look at me now!”
Proof that I am a reincarnated World War One soldier (Part One). These are from a soldier’s joke newspaper, The Wiper’s (a mangling of Ypres) Times, produced for soldiers by soldiers that found an abandoned printing press.
I know my methods can solve everything, but today I had a crazy idea. How about spending some time talking about how I got into debt in the first place? I know that might cut into the revenue of the Wildernetics© End of the World Cult and Take-Out BarBeQue Restaurant®, but I figure you might come back for the brisket. It’s very tender.
I’ll quit teasing. How did I get into debt? First a little. Then all at once.
Let me rewind a whole marriage. As regular readers will know, The Mrs. was not the first, but she is the final spouse. My first marriage was an example of a series of escalating poor mutual decisions where each side seemed to lack a brief moment of sanity to back out before anyone got hurt, sort of like the run-up to World War I. Even before Archduke Franz Ferdinand proved that .380 ACP was a useful round against Hapsburgs and their notably gelatinous bones, World War I was inevitable. Before I said “I do” everything was in place for the trench warfare of future divorce.
Okay, I apologize for this joke. I think it violated the Geneva Convention.
But, rewinding. After graduating college I got married and got a starter job, which is to say I had a job that just barely paid the bills. Nearly exactly. In fact, after working at the job for a few months, we were exactly (most months) at zero. We weren’t saving any money yet, but we also weren’t in the red. Success. My credit card limit was 10,000 . . . Siberian Lira. This was equivalent to a whole bright and shiny quarter. This helped me stay debt-free.
Then came the table.
Proof that I am a reincarnated World War One soldier (Part Two), this one is for James.
We had a dining room table. It wasn’t great, and the chairs that came with it were a bit ratty – the vinyl arms had been slammed into the table often enough that it looked like a pack of rabid Chihuahuas had spent their lives sitting on the chair seats and gnawing on the arms. I imagine them growling and chewing in unison as they sat around the table, like Viking Chihuahua rowers. Most all of our furniture was second-hand or gifted, but the table really was the biggest eyesore.
Okay, this one isn’t mine, but I couldn’t resist.
At some point, discipline broke. I know how silly it sounds to say that now, but back then, month after month of not buying anything but actual necessities takes more discipline than Elizabeth Warren around a tribal gathering. Eventually, I gave in. We bought the table. Using debt. Back then, individual stores would give you amazing credit limits just to buy their crap. They gave us more than enough credit to buy that table, and with the money I saved from shipping the Chihuahuas back to Denmark, I figured we’d be money ahead.
Proof that I am a reincarnated World War One soldier (Part Three).
The table was only $500, but the difference between having no debt (outside of a mortgage) and having debt, even a small one, was a huge psychological hurdle for me. It’s like having a doughnut when you’re doing low carb. “I got weak had one doughnut, so I might as well have, say, 36. And do you have any whipped cream I could just guzzle straight from the can? I broke my diet, and don’t want to waste it.” Pretty soon other nice-to-have things showed up, very few of which I still own today. But I had crossed that mental barrier from peace (debt-free) to war (spend away!). Suddenly, the credit card companies realized I had debt, and immediately wanted to lend me more money. My credit limits tripled.
I hope that this doesn’t sound like I’m blaming The Ex. Like Adam in the Garden of Eden, I was fully complicit. Ultimately the debt grew faster than my wages. This led to the idea of grad school: I could get free tuition plus be a paid graduate assistant. Would it work?
Sure. There were also student loans. Free money! Oops.
Okay, let’s all admit that Nachos Bellgrande® is NOT a war crime.
Proof that I am a reincarnated World War One soldier (Part Four).
There were some places along the way that I could have gotten off the merry-go-round. When I sold that first house to move for a new, post-grad school job, we’d made a stunning 40% profit in three years. It would have more than paid off a good chunk of my student loans. Nope, that would have made too much sense. We did pay down a little debt and bought a new house, putting down the minimum down payment.
But most of the money was just spent. About this time I also had one of the worst ideas I’d ever had in my life. The Ex and I were always arguing about money, and about the thermostat – I knew that 50°F in winter and 90°F in summer were reasonable temperatures, but The Ex disagreed. Well, if she had to pay the bills, she would certainly understand how tight money was. Right?
No.
We had a different view of not only household temperature, but the idea that one should pay monthly bills, well, monthly. I didn’t figure this out for three years, by which time I owed enough money to qualify as a third-world country, but one of the nice, mainly atrocity-free ones. Mainly.
Taco Bell® inspired outfits?
Debt is like George Washington’s description of fire, it’s an amazing tool, but a fearful master. My advice is to pay all of your bills in full, monthly. I know that the people who own your debt disagree. Why? They want you to have debt, as much as you can pay.
I had a friend (since passed away in an accident) who I called Batman© on this blog (“I’m Batman,” – Batman, in Batman). He had one particular investment that was worth about $12 million – a series of apartments. He had paid the apartments off before they were even built by selling future property tax credits to other businesses. Yeah, that kind of friend.
But he viewed his tenants as slaves (his term), who went to work daily so they could send him money every week. I heard him use exactly that phrase to describe them. He liked his tenants and was a good landlord. However, he knew the score: when they went to work each day, they went to work so they could pay him.
And Batman was a good guy and he taught kids that debt was a form of slavery of ordinary people to wealthy guys just like him, not that they always listened.
My marriage to The Ex? That particular marriage is proof of the old Henny Youngman joke:
“Why are divorces expensive?”
“They’re worth it.”
Yeah, divorce just STARTS the argument.
The day she moved out was one of the happiest days for both of us.
I was still digging myself out of debt when I met The Mrs. As our relationship blossomed, I thought it was only fair to tell her of the debt that I had.
“The Soon To Be The Mrs., I have something to tell you. You might want to sit down.”
The Soon To Be The Mrs. looked shaken. She sat. I told her about my debt. She laughed.
“Is that all? I thought you were going to tell me you’d been in prison.”
No, not prison.
But I still owed reparations payments to France.
You also can’t overstate the impact of easy debt on inflation. Whether student loans, mortgages or cars, being able to borrow more and more money for longer and longer terms drives up costs. As costs go up, you are left with having to borrow money to buy what you want. The cycle repeats itself. Just for fun I priced a new F-250 right now, and a pretty basic 4×4 three quarter ton truck will set you back $43,000. A standard five year loan? $813 per month with zero down. That is a mortgage payment in a lot of places. Obviously very few people have $43,000 laying around to buy a truck so they finance it which only encourages prices to keep going up. The best example are student loans.
Also, it is impossible to imagine our current “economy” without massive amounts of debt being added daily, via lenders and the government. Our whole consumption economy is driven by debt and without it? The house of cards comes crashing down. We are in a bad place but so is the rest of the world.
Wow – on a truck. That’s more than a house payment in Modern Mayberry.
John – – You touched on the single most important reason why people get heavily into debt: inability to resist the lure of Instant Gratification.
It is also why most dieters fail to lose weight.
Instant Gratification has led to many unplanned pregnancies as well.
Gimme, gimmie, give me, are some of the first words toddlers learn.
Those who stoically resist the lure of Instant Gratification are the savers and are able to increase their wealth by investing their savings.
The old story keeps repeating……….the grasshopper and the ant……..
Loved the Wipers style of British “humour”. Well incorporated in this Homily.
Be well. Behave (or don’t get caught!)
Yup. And willpower. It takes tons – and for a long time.
Sigh. I too have a debt story I won’t go into, now long ago and thankfully well resolved. But I well remember how it all started. Back over 40 years ago I got a second credit card with a $500 limit because I JUST HAD TO BUY:
https://global.epson.com/company/corporate_history/milestone_products/11_mx80.html
I didn’t stop at a second credit card. Alas. A hard lesson learned.
I remember that printer. I had one for years in the office. I got an innovation award for figuring out that it can be hung on the wall and not take up desk space. Then someone figured out that the EMI from it could be picked up by the phone and read out what was being printing. They took my dear printer away, even though I promised them that I would rather stop using the phone ;>)
Is it time for Marvin again?
https://youtu.be/df0kZcZUZmA
The music of my childhood
Yup. Digging out changes you, though.
Probably the best decision my husband and I ever made was to get into Amway sales. We pretty much only broke even (thanks in part to my husband selling to his MANY friends at cost), but being surrounded by people whose advice to us was “pay cash” and “buy used” and “pay off all your debt” propelled us into solvency for the first time in our 25-year long marriage.
We still own a distributorship (mostly for the soap and vitamins for personal use), but we are, and have been free of consumer debt for many years. Our home mortgage could be paid out of our savings, if necessary (we’re on target to pay it in full in just under 8 years and are making extra payments each month to accelerate that).
The American public owns home that are too big, too expensive, and filled with crap bought on credit. Even a small change in their income will often precipitate a crisis.
Now, I realize that good sense says to buy a home in a decent neighborhood, in reasonable condition, and that won’t completely drain your bank account keeping it up. Outside of the major cities, it’s not that hard to do. So, for most people, the goal should be to detach from need to locate near major cities/population centers.
COVID restrictions made that possible for many people. Already in process, the trend accelerated. The switch to home schooling, reduction in women working, and sensible use of the COVID money (most people did NOT take on new debt, but paid down bills and socked money away during that time), all contributed to the American citizen’s newfound ability to tell Biden and the Left to stuff it.
I’m cautiously perched on my seat (a USED chair) just waiting to see how it all turns out.
I suspect that it won’t be quite how the Left anticipated.
Debt-free but still too big and too expensive. Though we thought thete would be more kids and ponies… Ah well.
Before Coronachan and the world going mad, we had plans to subdivide, so the elders and the grand-kids and family could live with us. It’s a beautiful place. The trees we planted a quarter of a century ago are just beginning to show glorious promise. Now… Ah well. D.V.
Getting used to less is the best. And it rarely impacts your life in significant ways.
Similar experience.
Q. How can someone with an MBA in finance screw the two of you into more debt than your combined annual salaries in a little under 8 years?
A. Because you didn’t dump her ass after the first time she started digging that hole.
“It doesn’t matter what they said when God, family, and the whole world was looking for half an hour one sunny day in June. Anybody who spends you into debt is not your friend, doesn’t have your best interests at heart, and should be shit-canned with extreme prejudice the first time they do it, without a second thought.
If they come crawling back on their hands and knees over broken glass, cut up their credit cards, hand over their paycheck without any quibble in perpetuity, and agree to let you handle the finances forever, and plead with you to reconsider, after they complete a 12-step program, you might reconsider, as long as they understand that so much as 25¢ of debt henceforth is grounds to lift the stay of execution, and drop the hammer permanently. And leave skidmarks.”
“Alex, what is Things My 35-Year-Old Self Would Have Beaten Into My 25-Year-Old Self with a crowbar?
Correct!
God, kids, money, and sex. Get it sorted before you become one flesh. Marriage certificate or not (Common law states will get you coming and going gents)
Yup. Ditto. Lessons learned, the hard way. Same ages, too.
I took the “optimism” quiz. I only failed on one question, but it was the first one: I am frequently cheerful. But, really, I think I have good reason for that, since I am a citizen of another kingdom and am merely a sojourner here. I’d go to Wipers to get that taken care of, but I hear that most service of that sort has been moved, currently to the Near East / Southwest Asia. I’m not going there. I think we’ll soon have plenty of optimism curing available right here in the shambling corpse of the former US of A.
Very well said. I can’t add anything to that one.
Answer to Aesop’s question on how an MBA can get you in immense debt: check this idiotic article from a stock adviser,
https://finance.yahoo.com/news/the-absolute-dumbest-thing-in-washington-122742928.html
Note article is written by Rick Newman, Senior Columnist, and should henceforth be ignored.
Unfortunately, the problems of personal debt are magnified when perpetrated by the government.
We never did believe much in debt. We spent some time in Mormon country and picked a bunch of practical habits. Be sure to visit their website. The best thing we ever did was find Dave Ramsey. Once out of debt, there is plenty of money.
Using debt means everything costs 2 to 3 times as much. The government, including state and local, needs to figure this one out. I have a friend that runs a construction company. He specified in the contract that payments after 90 days were charged at 18% per year interest payable monthly. The state said OK for monthly and has been making payments for 15 years now. This means they have paid him 6 times the actual job cost thus far. His one fear is they will one day pay him off ;>)
Nicely done! I’d buy a piece of that!
I own my home outright, no loan.
My home has two axles and wipers for the windshield, all essential to a home these days..
.
2003, my Very Significant Other got sick.
Naturally, we acquired a 1997 Ford CF8000 commercial truck to convert to our concept of an ExpeditionVehicle.
In less than a week — while selling everything — we completed our conversion and hit the road from Oregon with the vague goal of ‘south’.
Twenty-four months twenty-four thousand miles around South America.
Alaska Panama all over north and central America.
.
Summers up rough logger tracks to remote mountain lakes, winters on isolated Baja beaches.
.
During our house-sitting gigs, we feel ‘uneasy’… something about a stand-still house seems disconnected from the outside.
That, plus rarely visited rooms filled with potentially valuable stuff… the equivalent of a thirty-year loan for a storage-locker.
Not judging, just noticing different priorities.
That’s a funny way to put that – just a big storage locker. I like it.
My parents were all-cash fanatics who never financed anything but the modest saltbox home I grew up in. I attended State U. at a time when a summer working as a roofer’s assistant provided enough savings to pay for another year of college. I never even held a credit card in my hand, until…
Enter the wife. Her minimum wage income during our dating tenure was so small that visa, amex and all the biggies would not give her the time of day. But Sears? Macy’s? J.C. Penney? Yeah, they became fast friends.
Despite earning a bunch of degrees in STEM, I didn’t appreciate, fully, the sharp disconnect between the cost of nesting and our limited means. The result was years spent in credit hell, working so much overtime that I barely recall our children as infants or toddlers.
The straw that broke the camel’s back was taking it upon myself to purchase, on credit, a massive cherrywood entertainment center, which still occupies a corner of the living room just a few yards from where I am sitting. It was designed to hold a deep, 25″ diagonal tube TV, with a sliding rack for a VCR underneath, and therefore serves no other purpose today than as a reminder of our youthful recklessness. It is the last major purchase we ever made with a credit card. We refer to it as “the coffin” for obvious reasons.
I’ve dragged that b!tch with us from house to house in the teeth of my wife’s bitterest opposition, that I might never, ever forget that important lesson about living within our means. Who knows? Maybe she’ll bury me in it. It would probably serve me right.
Ha! I love it. I must say that I enjoyed (a decade later) cutting that table up and using it for firewood.
Reading the comments here, it makes me wonder if people get into trouble more because they learn bad lessons from their parents or because they don’t learn the good lessons that their parents try to teach them. I was lucky on two counts – my parents tried to teach me good financial habits and I paid attention.
Opie Odd
Most parents (like >90%) couldn’t find their butts with both hands, a mirror, a map, and a compass, where financial acumen is concerned, going back over 100 years.
The entire financial industry Ponzi pyramid is built on a recognition of that fact.
I had good parents, but they seemed to think I’d just understand it. Dunno. I’ve over communicated to my kids.
We all learn through trial and error. Being Gen-X/13er it’s pretty common for a reactive generation to have things turn on a dime and wipe out several years of hard work if even an understandable mistake is made, like believing the stock market is always a long-term moneymaker (1929, 2008 anyone?).
I haven’t bought a new car in well over a decade and ever since the GM bailout in 2009 I’ve consistently been able to find a perfectly acceptable used vehicle with 15-20K-ish miles on it for $12K/$13K if I look around enough–also plan on keeping every car I get for at least 5 years. I got in trouble a couple of times in my 20’s, but unfortunately I did it all by myself, no spouse -helped-. 🙂 Fortunately some good lessons were learned which stuck.
Yup, my last new car was in 1997.
Learned my lesson.
Similar story here. Some poor decisions and instant gratification (started with a small credit card to purchase a window air conditioner to make the bedroom in our poorly insulated rental liveable one hot summer) led to significant but manageable debt for two professionals making decent money. A couple kids, some medical issues and the loss of one of those salaries…combined with some denial about the need to make lifestyle changes…led to overwhelming, unmanageable debt for the better part of 10 years. We got the ship turned around and have *just about* eliminated all debt but it was touch and go for a while.
Never again.
The benefit of the experience is you always will remember what worked and what didn’t.
We just passed the 16th Anniversary of The Great Day Of Failure, in which I and my business partner fired ourselves because our business was not sustainable. Total losses leading up to, because of, and following the failure were in the hundreds of thousands of dollars over many years (and still going, if you count the money not making more money). Last year we essentially crawled out by a combination of hard work and dumb luck.
Now, everything that needs to get funded gets funded first, and all the bills are paid at the end of the month.
How people can see that this works for individuals but not apply the same rationale to the finances of a state is mind boggling. Eventually, your debt comes due.
I think it is because the dewberries running said state expect to be ling gone when the bill collectors turn up.
I love it. Credit cards are fine, if they’re always paid off.