Thursday, February 2, 2012

Money

My knees and feet are in good shape. So says my ART guy. My shoulders suck, though. He worked on the top of the shoulder and the side of my neck in a firm but no-nonsense sort of way that was JUST SHORT of making me whimper. It felt good afterward though. I'm sure it's too much mouse use.

I'm in a strange place emotionally at the moment. Work is in transition. Vacation is soon. Swim and bike are doing well, but haven't been running seriously in a little while. I hope I get this balanced before race season arrives. Core is meh squared.

The great experiment on cutting down on coffee to see if I sleep better has hit a bit of a snag that I'm trying to work through. Part of the problem is that I love the smell and taste of most coffee. 'Bux and Timmies doesn't do much for me, but most other coffee does. That makes it harder.

Oh, and more temptation arrived.



Not sure when I'm going to get the time.

I was asked to talk a little bit about this " It's only money, and it's easily replaceable. Time with family and friends, irreplaceable. Time spent doing what you think is fun, irreplaceable." Especially the money part. This was from my 11 things blog tag a little while ago.

Most people get hung up about money in one way or another. Mostly they think they don't have enough. I have a buddy who went and did an expensive thing that did not work out at all the way it was hoped to. That person couldn't bear the thought of losing a chunk of that money by backing out of the trip, and subjected themselves to a horrible time. They didn't get that it was cheaper to let that money go and avoid the horrible time. It wouldn't have taken very long at all to "replace" the money that was "lost".

Let's begin at the beginning. Money is just a medium of exchange. By itself it is worthless. Can't eat or drink it. If there's nothing to buy it doesn't matter how much money you have. There is a certain minimum you need for the essentials of life. I am NOT talking about cable TV, Starbucks coffee, an iPhone, or other such toys. I'm talking about food and shelter. That number is not especially high. Beyond that are the important expenses to fit into society, clothing, hygiene, education, transportation, and other stuff. With care that number still isn't that high in the great scheme of things, or it need not be.

One of the articles I like to read in the Mope and Wail is a finance column about people wondering if they can retire. It is astonishing. Some people make the most amazingly stupid decisions and then wonder why they are in debt or can't retire. They have a high enough income, but an even higher stupid purchases habit.

It's the purchase side of things where people often get into trouble. I blame TV shows like "Lifestyles of the rich and famous". The problem is that everybody thinks they "deserve" a lifestyle like that. Their esteem is tied up in the kind of car they drive, or the school they are sending their kids to. Some people don't understand that credit cards are like fire, a dangerous tool, and that compound interest can get out of hand very quickly. They don't do the math to see if they can afford something. They don't say no to spending questions.

Somewhere during my life shopping changed from being something one did because it had to be done, and required planning to find the best value, (Note, NOT the cheapest prices, the best value. There's a difference.) and turned into a recreational activity. People went shopping for fun. Buying what are essentially toys or frivolous shit on credit. Which I think is demented, but that's just me. The malls started putting in "food courts" so there was no excuse to leave. Unless of course, you want real food.

Then there was Walmart. People stopped understanding value, and went only for the cheapest price. My parents and grandparents would fix up something before going and buying new. That can't be done much anymore. The Walmart world ruined fixing things. It was cheaper to go get more junk. They understood that it sometimes made sense to spend money and get a better product that would last longer, or serve several purposes. That sort of thinking is almost dead.

On the supply side, I firmly believe that making money is not terribly difficult to do. There are any number of routes to legally acquiring lots of money. Many of them involve a commission sales job. It doesn't matter what. You make the phone call or visit. You ask for the sale. Repeat as often as required to get to a yes. Most people can't do it. Or won't do it. You don't need to be terribly smart, just persistent.

Starting your own company is another route. The hours might be long, but the payoff can be huge and it can be fun if you enjoy what you're doing. Even a regular salary job can make you a lot of money if you don't spend it for a while. Forget that save 10% shit. If you want to make money you save 50% or more, and invest it carefully. You spend spend some of your waking hours figuring out where to put it so it will grow and make more money. Live modestly, build your nest egg, learn from your mistakes, and then spend, carefully.

Or another route, buy assets and rent them out. Houses are a great example. I worked with a guy that rented out several fourplexes. Some days he came to work (shift work) looking like crap because there was a tenant emergency. Some months he lost money. But by and large his tenants paid for those buildings. I haven't talked to him for a while, but if he sold at the right time he's set for life. It wasn't quick.

All of these things require work, but they aren't hard to do, particularly. Hard is figuring out the rules to make a rocket go up without exploding. Hard is figuring out how to make the iPhone the amazing thing that it is. Hard is trying to figure out how to prevent cancer from killing people. In contrast, making money is about applying a few well known rules, having the discipline to stick with it, being patient, saying no a lot, and being willing to go against the grain of what your family, friends, colleagues, and just about everybody else want you to do, which is go to the mall and spend money on junk because that's what validates their existence.

There was a book I read a while ago that talked about American millionaires. Everybody has this image of a millionaire living in a swanky house, driving an Italian sports car, dating the eye-candy half their age, traveling the world. The reality was quite different. On average they drove American made cars several years old. They'd been living in the same modest house for many years, married to the same spouse. They didn't wear fancy clothes, or dine out in swanky places, or at least not often. What seemed to be the most common trait among them was that they had no desire to show off how wealthy they were.




12 comments:

  1. "The Millionaire Next Door" - Great book! I read it several years ago. I know a couple of them and they would "fit" the book's description. Usually the people that flaunt money don't really have it - just credit.

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  2. Exactly! Now you say the name I remember it but for the life of me I couldn't last night.

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  3. This is an excellent post!!! And right on the money. ;) Mike and I live frugally -- we don't piss away our money and crap we don;t need. We don;t have a huge house. Our mortgage is paid, and we own our two vehicles. Mike is able to take months off work because of the choices we make.

    We were just talking about this the other day -- how status plays a part in all this too. People wasting their $$$ because they want to impress *other people.* Who all these people are a mystery...they are probably the same ones that are swept up in trying to impress each other.

    It takes a lot of saying no and braving reactions from friends and family when you forge ahead on your own path though...

    Great and insightful post Keith!

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  4. Frig I have typos in there. :(

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  5. I lol'd at Julies "...right on the money." quote.

    Great post Keith...I really like your insights on the topic.

    On another topic, when/where are we getting together with the gang next for dinner? Maybe we can schedule something next time Julie/Mike are in town.

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  6. Glad you liked it. I never cease to be amazed at the dumb decisions people make about money. TV is part of the problem. The other part is everybody wants everything now. Make that NOW!!!!!

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  7. Tying to pin Julie down on being in Calgary is very difficult. She is a free spirit, running wild. But we can try, right? How does early March look?

    Glad you liked the money post. There are even some follow up thoughts trickling around in the sludge I call a brain.

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  8. I loved this post! It very much speaks to the ridiculousness of American culture and trends. Your last sentence says it all. It's too bad that so few people actually subcribe to that modesty.

    This was my favorite: The malls started putting in "food courts" so there was no excuse to leave. Unless of course, you want real food.
    And also this: Core is meh squared

    Sorry about the lack of running. Nothing sucks worse than not being able to run. Trust me, I know. I'm carrying aorund 21 extra pounds and haven't run in 17 weeks. Can you say cranky?

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  9. Oh yeah, I'll be interested to see what you think of Boarwalk Empire. We gave season one a shot and were not impressed.

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  10. Getting back into the run, and it felt good. The meh squared line is a reference to Julie's blog. There may be a follow up on money. Stay tuned, though I realize you will have all consuming responsibilities soon.

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  11. Will do. I expect to like the scheming, and Linda can't wait to see the costumes.

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  12. Good post!! Every once and awhile we need a reminder that we don't need all this stuff!! It only takes up room, which then requires a bigger house and a bigger car to transport it. It drives me nuts that when stuff breaks I can't just fix it. Why can't stuff last any more? I just bought an ipod/computer/bike/camera etc. so why do I need another one? (All rhetorical questions- no need to answer!)

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