Public Use Theory and Personal Finance

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I’m in a funk. I normally enjoy the financial podcasts that Mrs. Groovy and I listen to during our daily constitutional. But lately, all the “unpacking,” all the “inflection points,” and all the pithy axioms are boring me to tears. Could it be that I have descended into peak financial independence?

Just how long my FI-funk will last is difficult to say. I suppose my once beloved financial podcasts will remain background noise for several weeks, if not months. But that’s okay. I’m still exercising my brain during our constitutionals. Now, however, I think rather than listen. And this brings me to the point of this post. I’ve used my last two constitutionals to devise a new theory—something I call the public use theory. Here’s what it entails.

Public Use Theory

Public use theory begins with the premise that all institutions—because they’re created and run by man—are flawed. The second premise is that the more you engage with any particular institution, the more likely you’ll be exposed to its flaws. Finally, the third premise of my public use theory is that you should mitigate your contact with those institutions whose flaws pose the gravest threat to your well-being, particularly your financial well-being.

Let’s now look at my public use theory in action.

What Institutions to Avoid If You Want to Protect Your Wallet

While all institutions are flawed, not all institutions pose the same degree of risk to your well-being. The flaws of the financial services industry are infinitely more troublesome than the flaws of the pudding industry. Here are four institutions with wealth-destroying flaws that you would be wise to avoid.

The Criminal Justice System

I’m a big fan of the guys and gals employed in our criminal justice system. In general, I think they’re the most professional and trustworthy in the world. But I’m not naive. I know there are unscrupulous cops, prosecutors, judges, and prison guards. I also know that our cops, prosecutors, judges, and prison guards are fallible. They will make mistakes. So to be on the safe side, and make sure your life, limb, and wallet aren’t placed in jeopardy, you’ll want to have as little interaction with this institution as possible. Here are three groovy suggestions:

1. Obey the law. Don’t drive drunk or use illicit drugs. And don’t shoot, stab, rob, or assault your fellow man.
2. Don’t hang out with people who have a morally casual attitude toward obeying the law. No good can come from watching football or playing video games in the neighborhood crack house.
3. Don’t fight cops. If a cop stops you, just answer his or her questions and follow his or her instructions. Don’t act as if the cop’s behavior is the most abominable assault on civil liberties the world has ever seen. I got pulled over once for driving while white, and once I explained why I happened to be in a black neighborhood, the cop told me to carry on. He even cheerily commanded me to “have a nice day.”

The Car-Repair Industry

When it comes to cars, my ignorance is vast. I don’t know the difference between a tie rod and a johnson rod. And because of this, I know I am a prime candidate for repair shop chicanery or abuse. Here are four groovy suggestions to mitigate your exposure to the car-repair industry:

1. If at all possible, don’t own a car. But if you must own a car…
2. Don’t borrow money to buy a car. If these means driving a car that severely understates your rarefied socioeconomic status, so be it.
3. Be super meticulous when it comes to following the maintenance schedule of your car. Your car is a machine. If you want it to last and not breakdown, you must maintain it.
4. If a repair estimate is over $500, get a second opinion.

Higher Education

Here is the business model for the most sought after credential that the college-industrial complex has to offer, the vaunted bachelor’s degree:

• Make students take 40 courses but only 15 of those 40 courses will pertain to their majors.
• Supply all manner of bread and circuses to dazzle the studentry and justify outrageous tuition and fees.
• Offer no rebates or safeguards for those students who receive a BA but can’t repay their student loans or find a job in their field of study.

And this joke of a business model will not go “gently into the good night” because it serves the interests of the only people who count in higher education—administrators, tenured professors, coaches, bankers, and “pro-education” politicians.

The good news is that even though the higher-education business model isn’t going away anytime soon you can still mitigate your exposure to its wealth-destroying flaws. Here are seven groovy suggestions:

1. If you’re in the bottom half of your high school class, don’t even think of going to college. Go to trade school, start a business, or start working in an industry that allows you to advance without a piece of paper (e.g., the fast-food industry).
2. Unless you want to be a doctor, a lawyer, or some other professional that absolutely requires a BA, community college should be the extent of your exposure to the college-industrial complex. Its bread and circuses are minimal and it doesn’t require its students to take a ridiculous amount of superfluous courses.
3. If you must get a BA, choose an in-state public college over a private college. Tuition at an in-state public college is a third of the tuition at a private college.
4. Go to college locally. Living at home is a great hack to eliminate the cost of room and board.
5. Never major in something that is unlikely to lead to a job in that major. The vast majority of sociology majors don’t wind up being practicing sociologists. The vast majority of pharmacy majors, however, do wind up being practicing pharmacists.
6. Don’t borrow more than half the starting salary that graduates with your degree typically make. If you’re a nursing major and nurses in your area start at $40,000, don’t borrow more than $20,000.
7. Never go to a for-profit college. They are even a bigger joke than their non-profit counterparts.

The Healthcare System

Until we have price transparency, competition, and incentives for Americans to consume healthcare services and products mindfully, our healthcare system will be a major drag on our wallets and a major threat to our financial security. The son of my brother’s business partner got bit by a rabid fox bat recently and the rabies shots cost my brother’s business partner $15,000 $17,000. FIFTEEN THOUSAND DOLLARS! SEVENTEEN THOUSAND DOLLARS! The identical treatment would probably cost $1,500 $1,700 in Mexico.

9/9/2019 Update: I screwed up. Brother Groovy informed me that his business partner’s son got bit by a bat, not a fox. And the rabies shots cost $17,000, not $15,000. Sorry for the fake blogging. 

Here are six groovy suggestions to mitigate your contact with our healthcare system:

1. Avoid risky or dangerous hobbies or avocations. You’re much less likely to break a bone playing Scrabble than skiing down an icy mountain or riding a motorcycle at breakneck speed.
2. Exercise. Walk at least a mile every day. And don’t forget to lift some heavy things a few times a week. Our bodies were built to move, and our bone, muscle, and sinew thrive when they are subjected to moderate stress.
3. Drastically reduce your consumption of refined sugar and refined carbs. Refined sugar and refined carbs are the primary causes of obesity.
4. Don’t smoke or use illicit drugs. Our bodies and brains weren’t designed to safely metabolize these substances.
5. Use alcohol sparingly. Our bodies and brains can handle a small amount of alcohol. They can’t handle a large amount of alcohol.
6. Become familiar with medical tourism. While our healthcare system is designed to humble you financially, healthcare systems in other countries are designed to fix you at a reasonable cost. A perfect example of this was recently highlighted in The New York Times.

Final Thoughts

Okay, groovy freedomist, that’s all I got. What say you? Is my public use theory a worthwhile theory that will help people successfully navigate around the landmines of life? And I identified four institutions that have wealth-destroying flaws. Are these the primary institutions we should be wary of? Or did I miss something? Let me know what you think when you get a chance. Peace.