When it comes to personal finance, most of us are our own worst enemies. We save too little and spend too much. Our priorities are royally screwed-up.
A big reason why we spend ourselves into debt-slavery is because we want to have what the cool people say we should have. In other words, we’re very susceptible to hype. The cool people say we need Air Jordans to play pick-up basketball and we believe it. Never mind that Michael Jordan’s greatness on the basketball court had nothing to do with his sneakers. We need those $150 sneakers. The $25 sneakers are for losers.
Here, then, are five things that aren’t nearly as important as the cool people say they are. If you can resist the pressure to spend rabidly on them, your odds of becoming a financial stud (or stud-ette) will be greatly improved.
When you get down to it, when you strip away all the marketing, all the media attention, and all orgasmic-leaden froth spilling from the mouths of overwrought announcers, sports are nothing more than grown people running around in costumes, chasing a ball. But to many, many people, sports are the most consequential endeavors of the human race. Get a load of Yankee announcer John Sterling telling his viewers/listeners that the Yankees had just won a baseball game.
Really, John? All that for winning one meaningless game in a 162-meaningless-game season? What would you do if the Yankees cured cancer?
My point here is not to ridicule John Sterling or any other announcer. I get why they carry on like jackasses. They’re getting paid very handsomely to act like sports are critical to life on earth. But what’s the excuse of the typical fan? I guarantee you that the typical fan’s quality of life would be infinitely worse if his garbage men went on strike rather than the players of his favorite sport. But would the typical fan ever consider giving his garbage men a standing ovation? Or pay for a premium cable channel so he can watch his garbage being hauled away?
I can almost understand becoming emotionally attached to a team if the players and owners really cared about the fans. But in so many ways—from ticket and concession prices to television rights, free agency, and the demand for taxpayer-funded stadiums—players and owners show nothing but contempt for the fans. When I was growing up in the 70s, I could watch the Mets or Yankees on regular, over-the-air TV for free. I didn’t need a cable subscription. And if I went to a game, nose-bleed seats cost $1.50. Seats by the field cost $4.00. Today, the cheapest nose-bleed seats at Citi Field (home of the Mets) cost $11. The most expense seats, those behind home plate, go as high as $486. It could literally cost a family of four over two grand to attend a baseball game. Insanity.
Here’s a novel idea. If you like a sport, play it. If you need to watch others play a sport, check out your local high school. It’s free. Shortchanging your retirement savings to increase the wealth of millionaires and billionaires is breathtakingly stupid.
Cars are a curse. On the one hand, they’re great for transporting people and stuff from point A to point B. On the other hand, they’re expensive as hell to operate. I own my 2004 Camry outright and I work from home. And, yet, Lucy will still cost me over $2,200 this year (not including depreciation).
But what really kills me about cars is the asymmetrical information that exists between owners and mechanics. Car owners typically have little understanding of how a car works, and mechanics typically have a lot. And what happens when ignorance meets unethical expertise? FINANCIAL ABUSE!
A few years ago, my 1997 Jeep was coming to the end of its useful life. It was up for inspection and the only thing that wasn’t working on it was its horn. The mechanic told me it would cost $1,000 to fix. I, of course, said screw it. The car had over 160,000 miles. I would rather sell it for parts. And, then, miraculously, as I was leaving the shop, the mechanic told me that a used version of the part needed for the repair was suddenly available. I didn’t need to pay for a shiny new johnson rod, after all. The job now would only cost me $200.
Now what would have happened if I really needed that Jeep? I would have been screwed. But because I had Lucy and didn’t need the Jeep at all, I left the mechanic’s shop $200 poorer rather than $1,000 poorer.
Do yourself a favor, especially if you’ve secured a mate and no longer need a car to signal your worthiness to potential lovers. Start slumming it with your car. Never buy new, only buy used (with cash), and learn to say no to your mechanic. Revel in your crappy wheels. That will keep the costs and ripoffs invariably linked to car ownership to a minimum. Your future financial self will be supremely grateful.
The best wedding I ever went to was in a VFW hall. Food for this affair was an all-you-can-eat buffet, highlighted by baked ziti and Swedish meatballs. Drink was a keg of beer sitting in a tub of ice. Entertainment was a high-school kid spinning vinyl records.
One of the worst weddings I ever went to featured a wedding ceremony accompanied by a harpist. Another one low on my list took place on a small cruise ship that circled Manhattan.
Now don’t get me wrong. I’ve never been to a bad wedding. The harpist wedding and Manhattan-skyline wedding were actually very nice. They just weren’t as memorable as the wedding in a dinky little VFW hall in a dinky little town in upstate New York.
Think about what a wedding really is. It’s a four-hour party to celebrate the marriage of two people. You eat, drink, and dance. As long as you get the basics right—good food, sufficient booze, and fun music—everyone will have a blast. All the other stuff we associate with a wedding is superfluous. I’ve been to a couple dozen weddings in my lifetime and I don’t remember a single wedding dress. Nor do I remember a single invitation, party favor, table setting, flower arrangement, or wedding cake.
The average cost of a wedding in America today is $26,444. In New York City, the average cost is $40,358. I can’t think of anything more applicable to the less-is-more insight than the American wedding. Ditch the Princess Di hoopla. Nobody really cares about that nonsense anyway. If the parents of the bride and groom are determined to spend $26k on a wedding, fine. Have the best four-hour party $6k can buy, and give the newlyweds $20k to help them buy a house or pay off their student loans.
To fulfill a science requirement at the University of Buffalo, I took two classes. One was called Great Mysteries of the Earth. It dealt with such vexing conundrums as Bigfoot, Stonehenge, and the Bermuda Triangle. The second class was called the Geology of Dinosaurs. It dealt with dinosaurs (surprise, surprise). And to this day, I still remember the definition of a dinosaur:
An archosaurian diapsid reptile with a perforated acetabulum.
Pretty impressed, huh?
These classes were a joke. Not only were they irrelevant to my then desired major (accounting), they did little to sharpen my cognitive abilities. And they were hardly the last bullsh*t classes I would have to endure during my college career. To get a bachelor’s degree, one has to slog through many irrelevant and intellectually dubious classes.
Higher education, or, more aptly, the college-industrial complex (CIC), likes to fancy itself as something more than a glorified trade school. And that’s fine, as long as it can pull it off. But the CIC can’t. It sucks at being more than a glorified trade school. It’s expensive. It’s inconsiderate of its students’ time. And it’s increasingly promoting ideas and values that are hostile to the core tenets of freedom. Here, for example, is a take on the First Amendment from the Vice President of the University of Missouri Student Association.
Here’s the bottom line. Americans need skills. They don’t need fancy pieces of paper (i.e., diplomas) from accredited colleges and universities, especially if getting those fancy pieces of paper requires massive debt, substantial opportunity costs, and unremitting exposure to PC indoctrination.
My advice to young people is to just use college for its trade school qualities. In other words, forget the degree and focus on the skills. Become a radical “unbundler” and create your own DIY credential. And don’t borrow a dime. Borrowing only encourages the CIC to keep its sham business model.
Young people interested in computers are prime candidates for a DIY credential. Here’s a suggested game plan.
The DIY Credential Game Plan
- Nail the SAT.
- Get accepted to the best state college or university you can commute to.
- Take the 10 hardest computer classes you can. (If your college won’t let you take higher-level computer classes because you haven’t accumulated sufficient credits, and you still need a class or two to reach 10 classes, take a MOOC at a big-name university.)
- While in school, blog about a particular area of computing (web design, network security, no-SQL databases, etc.).
- If possible, get a certification (MSCD, Mongo DB, Citrix Virtualization, etc.).
- Include your SAT scores, college grades, blog, and certification on any resume you attach to a job application.
- Explain in interviews that you went the DIY credential route because you couldn’t afford the cost of a computer credential offered by the CIC.
- Enjoy beginning your professional career two or three years before your peers, and debt-free to boot.
Color me unromantic, but a house to me is just a wooden box. The current box I live in is 2,000 square feet. That’s more than enough for two people. In fact, it’s too much. Mrs. Groovy and I have three rooms we never use: the sun room, the dinning room, and the first-floor powder room. Take away those three rooms and our box, at 1,700 square feet, would be just as comfortable.
Here’s a dirty little secret: modest homes are not synonymous with material deprivation. By world and historical standards, a 1,200 square foot American home with three bedrooms, indoor plumbing, hot water, modern appliances, central air, and internet service is unfathomable opulence. More than two billion people in the world today don’t have access to a toilet. American historian C. Warren Hollister described the condition of man during the Middle Ages—the period after Rome’s fall—as “a thousand years without a bath.”
So just buy what you need, not what you can afford. Every dollar that goes to furnish and maintain a house is one less dollar for your Roth or 401(k). Buying more home than you need sabotages your ability to retire early. Would you rather have a glorious McMansion box and retire at 65 or older? Or would you rather have a very modest box and retire at 45? Would you rather spend your money on heating and cooling and furnishing space you don’t need? Or would you rather spend your money socializing with friends and family and traveling the world?
So, how do you live? Are you a financial stud or stud-ette? Or are you much better at advancing the fortunes of developers, caterers, and college professors? Do you paint your face to show your devotion to your favorite team? Do you invest more in tickets and licensed merchandise than you do in your retirement?
I would love to hear about your battles against hype. Have you in the words of Mr. Money Mustache been “face-punched” by hype? Or have you learned to resist its siren call?