People hate you if you are mean. They despise you if you are nice.
I started writing this blog two years ago in an effort to understand my own financial behavior over the years, as well as how our financial system is structured. I never expected anyone to actually read it. But over the last two years, I have learned a lot - often painfully hard lessons. And a few hardy souls have actually read my ramblings.
Some of my postings - most of them, in fact - may come across as mean-spirited or hard-hearted. I am sorry for that, as it is not my intention to hurt anyone's feelings. But if I say you are an idiot for leasing a car, and you have a leased car in your driveway, well, what should I say? Should I say you are a nice idiot? Or should I qualify things and waffle, and say, "well, maybe leasing isn't so bad after all!" and end up like Sooze Orman - just telling you what you want to hear and validating your bad choices?
And in the examples I use, if you self-identify with the hypothetical, am I really being mean, or are you merely projecting your own life into the fact scenario? I can't help it if I say that Joe Blow is a fool for getting a payday loan, and you happen to think you are a lot like Joe Blow.
I would like to be "nice" - but going down that road only serves to take the edges off of ideas until they are watered down into bland platitudes. Pretty soon, saying things like "Frequent Flyer Miles SUCK!" turns into, "Well, I guess they aren't all THAT bad, if you get lucky and all."
Pretty soon, you aren't saying anything at all - just mumbling to yourself and hoping not to offend anyone.
And that is the problem with the media today. They don't want to offend. They don't want to get sued. They don't want to piss off advertisers or even NPR or PBS "sponsors". In a recent piece on NPR about "Buy Here, Pay Here" leasing (the subject of my next post), the commentator and the guest discuss the situation in such oblique and bland terms as to lead you believe that this is not such a bad deal.
Me, on the other hand, would think that they should be screaming into the microphone what a horribly lousy rotten deal these things are, how they target the poor and minorities, and how the scumbags who offer these deals should be tarred and feathered and run out of town on a rail. But instead, the radio drones on about "unattractive interest rates" of 35% or more.
Where is the outrage? They are screwing the poor and you act nonplussed.
That is the problem with our society. No one wants to say anything out loud anymore, for fear of offending. Whether it is political correctness, fear of lawsuits, or fear of making enemies - everyone holds back and says nothing. We avoid discussing politics with anyone, because no one can have a civil discussion anymore. So we say nothing - or worse, remain quiet when some crackpot drones on, at a cocktail party about how Obama is a Socialist or how Bush is plotting to take over America.
And as I have noted before, silence is the greatest friend the con artist has. So long as you are silent about your own embarrassing credit card fiascoes, the credit card industry has an ally in you. So long as you are silent about the rip-offs and bad bargains you have fallen for, the people selling these things will continue to prosper. So long as you remain quiet, the noisy people can take over. And the noisy people do not have your best interests at heart.
The noisy people - the advertisers blaring their bad-deals on the TeeVee at twice the volume of the programming. The shouting guy on the investment channel, telling you to BUY and SELL stocks, when in fact, his picks are worse than a monkey with a dartboard. The political hacks who scream in attack ads about what a rotten guy the other fellow is, as if his moral character were the only credential to office, and his political views secondary, if that.
And the screamers say all sorts of outlandish things - they make claims about financial instruments in their ads that just aren't true. They make claims in their political ads that are easily debunked as lies.
But we don't even have the balls to call them lies because the legal department said that would be slander. No, instead we say they are "inaccurate" or "not entirely true" which already takes the edge off what was once a sharp blade. The lie still stands, slightly tarnished, but not discredited.
And while we hate people for being mean, we often despise folks for being too nice. No one likes the fellow who tries to mediate and make kissy-face between opposing parties. No one heaps accolades on the fellow who is wishy-washy and waters down his own vitriol until it is utterly lacking in strength and power.
If anyone reads this blog, I think it is because I don't hold back. I don't say, "Well, maybe both sides have a point. Let's all get along!" Because there is nothing to be learned there, I think. There is no value in wishy-washy platitudes.
So if I say that leasing a car is idiotic, and only a fool would go for a high-interest rate "rewards" card, I really mean it. And if that offends you, well, too bad. These bad financial deals hurt people, day in and day out, and it is irresponsible to argue that "sometimes" they make sense - not when there are other deals out there that "all the time" make sense, anyway.
Because bad financial deals are bad financial deals. You can't "spin" numbers like political positions.
But the industries that thrive off your financial weaknesses surely would like to!
So, sorry if I hurt anyone's feelings. If you don't like it - don't read it!
10 comments:
Love your post!! And yes I'm one of your fans with a leas junk in the drive way ( to more years of shame )
Gus.
It's funny, but I just went over to "rich people's island" to look at a table for sale on Craig's List.
They all have the "look at me" homes that are impressive looking from the street, but up close, you can see the Dri-Vit peeling off and the cheapness of the construction. Large houses, though - expensive to heat and cool. They have lots of bills, but not lots of equity.
What struck me, was, after visiting the CL listing and two nearby garage sales, was how crappy the furniture these folks had - big houses, very little furniture, no artwork at all. And the furniture was all recliners and sectional sofas in micro-fiber. Ugh.
OK, so I'm a snob - I'm more of a quarter-sawn oak and leather kind of guy. But that shit lasts forever, and the microfiber crap goes to the curb in five years, if that. Which is a better value, over 30 years?
I was also shocked to see what crappy cars these folks drove - mostly American cars, and not upper-end ones at that. Trucks and mini-suvs, all no more than a few years old. No Mercedes, No Lexus, No BMWs. The houses were all upscale, but the owners and contents were not. Very odd.
My guess is, they prefer to lease a new car every few years, rather than actually own one. And I suspect their lifestyle is one of continual payments - with a monthly cash-flow requirement that must be staggering.
I'll keep my 10-year old BMW, thanks. It may be worn, but it is a much nicer ride than a brand-new Dodge Journey, any day.....
Funny thing, too, the folks on rich people island would look down on us folks on Jekyll. After all, we don't have "look at me!" houses filled with cheap furniture.
Different values, I guess!
I think humans are by nature illogical and thus easily conned. Cognitive bias is behind it all.
Keep on doing what you are doing. I appreciate your advice and thoughts on all things. I don't agree with you 100% but it doesn't mean I have to hate things. We're all different. As a copyright attorney, what is your take on the Megaupload event?
We all would like to be able to make free copies of music, movies, and the like. It would be nice. And all of us commit some forms of infringement now and then. Most of these forms of infringement, however, are de minimis and hard to detect. You rip a copy of a CD to your hard drive and load it to your iPod, that is one copy.
Uploading it to Napster is making 1,000,000 copies. Different beast.
But wholesale copying of movies over the Internet would basically eliminate the market for those films, particularly DVD sales, streaming, pay-per-view, etc.
Clearly the people behind these uploading sites are making an enormous amount of money - and the fellow in charge is wallowing in gross excess. It is not like he is some 15-year-old girl who made one illegal copy of her favorite boy-band CD.
No, the mega-upload thing was a major criminal enterprise.
See:
http://robertplattbell.blogspot.com/2007/10/copyright-on-internet.html
One of the aspects of Copyright enforcement and "fair use" is the economic damage caused by the infringement.
If you could legally set up a site that distributed pirate copies of all the Hollywood movies, then it would quickly eliminate the legitimate market for such movies. It would destroy that market, in fact.
Why would anyone pay to see a movie, pay to buy the DVD, pay for pay-per-view, pay for cable TV, or even pay for Netflix, if you could get it for free?
And why would any Hollywood studio make a hundred-million-dollar movie, if the potential return on investment was zero?
Some young folks make the argument that "Gee, those Hollywood folks are rich! They can afford it!"
But that is not a logical argument at all, just wishful thinking - weak thinking - at its worst.
One way to avoid paying for content is to avoid desiring content. I have no wild desire to illegally download explosion movies, as I have no desire to watch them in the first place.
Also, if you are willing to wait a few months, you can download most of these films on Netflix for a nominal sum per month. I mean, come on, $10?
I am a songwriter but I remember in 1998 I downloaded my first (legal and free)MP3 - it took 20 minutes but I realized then huge changes were coming to the industry. I like Spotify's model - most music online is over-priced. Few people want to pay 10$ for an mp3 album they can probably get for free. My album is 2$. In a way I wish copyright for media were enforceable so I could make money but I don't think it ever will be again. Technology moves too fast.
Well, that's exactly the point. The Internet makes it possible for PEOPLE to sell their works directly online for a lot less than companies do. So Amanda Hocking, a convenience store clerk in Minnesota, can sell her fantasy stories on Amazon for 99 cents or 1.99 or whatever, and before you know it, she has a movie deal and a "real" book publisher.
Or an indie rock band can record its own album on a Mac, upload it, and sell it for $1.99, which is $1.99 cents more than they would get from a record company.
The record companies and publishers made the majority of the money in the old print and physical media model - but they took most of the risks in printing books and making CDs. $15 to $20 for a CD or $15.99 to $29.99 for a hardcover book were just ridiculous prices.
The Internet can change all that - and at modest prices, no one has any incentive to violate copyright laws. It is a new paradigm.
See:
http://livingstingy.blogspot.com/2011/07/how-internet-is-changing-our-lives-for.html
Movies, however, remain expensive to make - at least for the time being. Who knows, though. In 10 years, you could make a Hollywood blockbuster explosion movie on your laptop using a $39.99 CGI download program. Won't even have to hire actors.
But in the meantime, movie-making is an expensive proposition, which is why they charge $7-$10 a ticket, or $20 to $30 for DVDs.
We always have the option of not-consuming, of course. You'd be surprised how many people think that simply is not an option!
Hi - I just found your blog and your posts are so true that it's depressing. I've been highly influenced by my mother who is a real maverick and atypical consumer so she's been telling me much of what you write about, for years, and I believe it.
But I'd like to look at bit more at the rewards card issue - I have a couple credit cards, one with USAA and one with Chase - and I keep meaning to get rid of the Chase one just out of protest against big banks, but haven't gotten around to it yet. The point is I pay both of them off as soon as I charge anything. I use credit cards as convenience and as consumer protection. To my surprise, a little while ago I found out I had accrued "points" at Amazon.com with my Chase card. Oh well, some "free" cd's. But I don't pay a fee or interest.
I ask about this though, because our daughter is in college and is going to be studying abroad - twice, one summer in Edinburgh and a semester in Japan - and I'm trying to budget for that. I was thinking of getting the Citi miles card which lets you use any airline and the points never expire, and just buying EVERYTHING including paying every bill that doesn't charge extra for it, with that card - paying it off every month - and maybe defraying a big chunk of her travel costs by the time she goes, in her junior year most likely. (already saving every dime for other stuff...like our retirement) Do you still think that's unwise, in those circumstances?
Rewards cards are just bait. They are bait to get you to sign on to a high-interest-rate credit card.
These cards are like having a loaded gun aimed at your head all the time. So long as it never goes off, you are fine. But if it does....was it worth the $99 trip to Duluth?
The restrictions, fees, rules and games with credit cards are such that you rarely, if ever get a "free flight."
Just to get a domestic flight - restricted - you need at least 20,000 to 25,000 miles. This often means charging $20K on your card. For many people that is their entire disposable income, if not more.
For an overseas flight? To Scotland? You'd need 50,000 points or more.
What I found was that we ended up getting maybe one flight - and that was only because I was flying coast-to-coast and accumulating miles that way. I got a lot of upgrades, too.
But I also paid over $500 a year in interest. All it takes is one late payment.
Sorry, but no sale to these gimmicks. They are not the path to true wealth, but a distraction - trying to get you to ignore the real goings on in our society, while they have you chasing down coupons, credits, reward cards, cash-back bonuses, and airline miles.
Everyone has a credit card crises at least once in their life, it seems. 70% of us carry a balance REGULARLY.
Credit card companies are not idiots giving away money because they are stupid. They have crafted these traps with precision and care, and baited them with emotional hooks, designed to get you to step into them.
Maybe a few people make out on these. I suspect if you can afford to send your child to school overseas, these aren't an issue. But for most Americans, who struggle with bills, these things can be deadly. And even many of us who "make good money" step in the Credit Card Doggie-Doo from time to time.
All I can say is, treat a credit card like a loaded handgun. And a high-interest rate card like a loaded handgun with the safety off, aimed at your head, with a hair trigger.
22.5%-30% interest can never be paid back, in many cases.....It is a waterpark slide to bankruptcy. You can't climb back up it, once you start sliding down...
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