This is for warm days that drift away
While the sun sets and the ghetto plays
Long nights on a hot summer's block
When you sip your brew and never touch your Glock
Summer's nearly over and October always gets me going again.
There's financial armageddon going on, which has everyone worried. Including me, naturally. As of Monday the retirement fund had lost $40k, which is always a lot to swallow. As Peter Lynch said, the most important organ when investing is not the head, but the stomach.
But, as I rode into work today, I thought about money and what we're spending it on. The kid'll take up some dough. Retirement will take some up, so hopefully we aren't sitting in a nursing home somewhere. But right now, what exactly do I spend money on?
Today my big plan is, for lunch, to ride my bicycle over to the Austin Public Library and get a "TexShare" card. This lets me check out books from other libraries, including UT. Then I plan on riding over to UT to look for a book about Eugene Onegin for the upcoming nerd book club. It's a potent combination: exercise, knowledge, and zero dollars.
Michelle and I have talked about our spending before. When we look at the credit card bill, a significant part is going out to eat. We have tried to curtail that somewhat by going out "only" twice a week. Some of that cost then gets moved over to groceries, but I guess it's less overall.
Anyway, at the time of our discussion, I estimated that I personally spent most on food, books, and trips. I've since joined the library and have drastically reduced how much I spend on books. We still go on trips, and I still love to eat -- and of course I've currently gotta drink beer that's $10 a six pack rather than $5.
The context of the discussion was about general "stuff" that people buy. In particular, a college friend of hers who had just gotten divorced and the two of them declared bankruptcy. When we would visit them, up in Pflugerville, they had nice, but not extravagant, things. And there was a lot of empty room in their house. This was why their bankruptcy was puzzling to us - two newish cars, a new 2000 sq ft house in affordable Pfluger, a new TV, a new set of living room furniture, new I guess appliances, etc. No ridiculous things like, eh, collecting expensive gizmos or outrageous home automation. Just lots of middle class crap.
And the thing was... I don't think they even cared that much about it all. I mean, the new living room stuff from some chain store like Foley's. It was just, you know, a nice living room set. $2k or $3k down the drain for a sofa and matching chairs. The cars were, I think, a new Jeep and 1 year old Honda. Sensible bourgeois cars, but new. The TV was pretty big, but wasn't monstrously so. I don't think anything they owned was a purchase motivated by a feeling like, "you know, I've always wanted a Cadillac, let's buy one!" Nor were they at the mercy of a terrible outside circumstance, like a major illness or bailing out a loved one.
Just plain old, unloved stuff. And it bankrupted them.
One of the best object lessons I have ever had was Thomas More in a A Man For All Seasons. When seeing that his erstwhile protege has perjured himself in return for some sort of Welsh honors, More tells him, "Why Richard, it profits a man nothing to give his soul for the whole world... but for Wales?"
To be clear, they had other issues as well. It's hard to know if their money problems caused their marital problems, or vice versa, of (most likely) the two were intertwined and reinforcing.
That kind of thing scares the bejesus out of me, much more so than a market decline (JP Morgan, when asked what the stock market was going to do, famously replied "It will fluctuate"). Which when I look at it is a little strange. I'm more afraid of something I can control, i.e. the buying of useless crap, than I am of something I cannot control, i.e. market issues.
I don't know where exactly I got this attitude from, but I've felt it ever since I left my parents' house and went to college. I've always been suspicious of stuff. I've always distrusted debt. I've always been worried about being destitute.
That worry in itself is a conundrum. I was reading through old canceled checks recently, and I see that in undergrad I would often have a frightfully small sum in the bank. We're talking $20 here. Of course, Mom and Dad were there to back me up, but I never overdrew my account. I always managed to live within those means. So though I've been worried about going into debt, I've never (other than the house) actually gone into it.
Another facet of that is that when I was poor, I was actually very happy. I managed to go skiing the first year I was out of college, even though I only earned $7,000 that year. I remember sitting in my tiny little 300 sq ft apartment in the hood, listening to "Linger" by the Cranberries of all things, and thinking, "I am truly happy right now". Even back then, I was a good saver, and seeing my little UFCU account creep up month by month was a big thrill.
But as Jay Z says, more money more problems. As I've gotten older and wealthier, I find myself worried about it a lot more. I worry about being broke a lot more than I'm not poor than I did when I was poor. I used to talk to a co-worker about this, and he said he had the same issue. He had won the options lottery at another company and had plenty of dough in the bank. But he lived a nearly monastic lifestyle. He confessed to me that his sister, who was a public school teacher, challenged him by asking, "do you think this money has really made you happy? You worry about it all the time."
Yeah, yeah, "wish I had that problem", I know. I'm not complaining here. I'm curious about it, is all.
Michelle and I were talking about our ability to save recently (if you get the impression that we talk about money a lot, you'd be correct. I have always believed that we should be absolutely transparent about our finances). We've been lucky in that we both have good jobs. But, at the same time, we've made choices that are unusual. We share a single, 11 year old car. We live in a 1,000 square foot house. We don't have a ton of clothes (see: 1,000 square foot house). I think riding my bike to the library is something fun to do.
I haven't balanced my check book since about 1995, so I'm not exactly sure how much we spend each month (I just got in the habit of looking at the starting balance and the ending balance each month. If the latter was bigger, I was satisfied). But I'm pretty sure it's a lot less than most folks. We can't help but save money.
Back when we had the conversation above, that we spend money on books, food, and trips, Michelle said, "true, but those are the most awesome things".
Haha. I agree with it of course.
That is one of the threads of this post that I am trying to get back to. I mentioned the folks who bankrupted themselves on unloved stuff. I compare this to when Traci bought her first car, a Honda sedan. Traci had come up from nothing: moving to the US when she was 10, she and her mom leaving her dad with $20 between them in her teens, making it through undergrad and law school, and finally buying a car. Hell, she even had to take driving lessons before she bought the car.
At the same time she bought her Honda, I bought a little Nissan truck. I bought it because I needed a car, it was an automatic, and I could get zero percent financing.
I hated that truck. I hated every ding I got because it was a ding on my brand new truck. I hated paying the "new car" payment of $300/month after it was no longer new. I had substantial buyer's remorse.
When I talked to Traci, I had a revelation. She loved her car. She told me that she would go outside and just stare at her car because she loved it so much. I told her that when I looked at my truck I thought, "I love zero percent financing".
Spending money on something you love makes sense. Even if what you love is your car. After all, money is, at the end of the day, there to be spent.
I imagine that like many people, money represents complex and conflicting things to me. It represents freedom, because we're not tied to jobs we hate and because we can travel anywhere we want to (that was my dad's definition of being rich: being able to go the airport and buy a ticket for anywhere in the world). At the same time, it represents restriction, because now I am careful to shred statements, and I find myself worrying about it more. It represents both physical success and spiritual impoverishment - the suburbs where I grew up are excellent examples of both. It represents an ability to help out liberal causes, like our annual donations to Safe Place, as well as an obligation to consider fiscal facets of governance.
Dennis Kozlowski, the convicted felon who was CEO of Tyco, was asked at one point, why did you do all this crazy illegal crap to earn more money? You already had a shiat load of money. More money than folks could reasonably spend (he had what a coworker once called "stupid cash: enough cash that you can buy stupid stuff with it". See: $2,000,000 birthday party). Kozlowski said that he kept going further and further because money "was a way of keeping score." Which is breathtaking in both its honesty and its avarice.
Which is an aspect of money, and one I also wanted to get back to. It does feel like a measure of success, and more is always better, right? But why is that? Money in the bank doesn't "do" anything. I was thinking about it today, about riding up to UT on my bike. Here I'll be, the sweaty old guy in the library with the backpack. Is that a frugal guy with money, or is that a bum?
I guess it shouldn't matter, but it does.
I'm not looking for anyone's adulation, nor would I feel comfortable receiving it. But I do want to be generous in spirit and in deed. I read one time that Jerry Jones always picks up the check when he goes to lunch. As the article said, even if there were 1,000 people eating at that lunch, you'd have to shoot Jerry to get him to not pick up the check. My dad has the same habit: he always wants to pay, and I suppose that's where I got it from.
Anyone who's reading this has probably eaten with me, and knows that I usually pick up the check :)
That is what that money lets us do. Gives us the freedom to buy lunch for our friends. Which may be a minor matter, but I think it's pretty cool.
I occasionally think we should go buy a boat, or a second home somewhere where we can ski, or join some country club, or some other retarded thing. Maybe someday we'll be rich enough for that.
This post has gone a lot longer than I intended it to. I have mentioned several revelations I have had about money over the past twenty years. I'll tell you one more.
Probably the most influential money book I have ever read was "Your Money or Your Life". Among many great revelations (you've made more money than you think; wages are what you get in return for hours of your life, which are irreplacable; being poor will make you miserable, but being rich won't make you happy; et al) was one about the "happiness" curve. They draw a curve based off of how happy people are vs. how much money they make. The curve is, somewhat, surprisingly, a parabola. That is, the richest folks aren't the happiest. Instead, the peak of the curve is somewhere further behind.
The authors build up to it perfectly. They say that was you can see, there is a peak to this curve. And this peak has a name. Do you know what it is?
You turn the page, and there is the same curve, but this time there is a circle drawn around the top of the curve. Next to the circle is a name. And that name is, simply, "Enough".