Tuesday, March 1, 2011

Middle Class Poverty Friend

Many people in this country make really good money, but are still broke all the time.  They claim to be poor and victims of one sort of another.  But in reality, they are only victims of their own poor financial planning.

I was talking with a friend the other day.  He was telling me how lousy he had it - how poor he was and how he was "one paycheck away" from being broke.

And he was telling me this while we were riding in his leased new car.

He said to me, "You're lucky, you're rich!"

He thinks I'm rich because I drive a BMW.  But it is a decade old, with over 100,000 miles on the clock and nearly bald tires - worth maybe $10,000 on a good day.  And I'm running those tires to the cords before I replace them.    It will probably have to serve me for another 5-10 years, at least.  Meanwhile, my "poor" friend is already thinking of what brand new car he is going to buy - on payments, of course - once he turns in his leased car.

He thinks he is being financially responsible by buying a brand new car instead of leasing this time.  Sort of like switching from Heroin to Crack Cocaine.  I guess it is slightly better.  Sort of.  Still expensive, though, no?

I suggested to him that he buy a slightly used car, for about half the amount of leasing, and then pay cash.  But that only made him angry.  "I can't afford to pay cash for a car!  I'm not rich like you!" he said.

And yet when I tried to point out to him that the cost of the lease payments that he has been making over the last few years would buy a nice used Mercedes, he cut me off.  I was rich, and he was "poor" and that was all there was to it - and yet he is the guy driving all the brand-new cars!

And here's the kicker - he makes more money than I do.  And he's "poor" and I'm "rich" - in his mind.

I just didn't get it.  But then again, I do. 

Poor Financial Choices cause poverty, period.  And poverty-think leads to poverty, no matter how much money the government can throw at you.  If you think like a poor person - buying things on time and going for the worst sort of financial deals - you will remain poor a long, long time.

It is called the culture of poverty.  If you think poor, you are poor, as simple as that, even if you make a lot of money.  And today in America, there are people making $50,000 to $100,000 a year who think they are "poor" only because they buy into this idea that they are a put-upon group of victims, and because they squander their money.

And the descent of the middle-class into de-facto poverty - by squandering of money - is particularly pathetic and alarming.  And totally unnecessary.

I queried my friend some more about his finances, discretely of course, and what he said (and freely said) was shocking.

To begin with, he tithed 10% of his gross income to a church.  Again, people complain they are broke all the time, but cough up big bucks to the local church, so the minister can drive a Cadillac.  Here's a money-saving tip:  Become a Quaker.  If you are going to join a religion, pick the cheapest one.  Seriously, why not?  They all promise the same snake-oil anyway - salvation, etc.  Why not just get the best bargain you can?

The second thing was more disturbing.  He co-signed loans for his children, friends, and even neighbors, failing to realize that this meant he was liable for hundreds of thousands of dollars in debt - and that his credit rating was shot as a result.  So all the junk he financed over time was at the highest possible interest rates!

And everything he owned he financed.  To him, life was all about cash-flow - how much something cost "per month".  He never bothered to calculate how all this debt was affecting his overall net worth.

And of course, one of the things financed was his brand-new big-honkin' RV, which, like his car, got hardly 10 miles per gallon.  The payments on this nightmare - not to mention storage and upkeep, were costing him over $600 a month.

Worse than that, he was constantly meddling in his children's  and his grandchildren's lives - doling out money, bailing out kids "in trouble", paying off their credit card bills and car loans - and generally making them dependent on him more and more, to the point where they just stopped trying to succeed on their own.  Why bother trying, when Grandpa will bail you out?

And of course, while he was saying this, his new high-tech cell phone rang, and one of his kids (or grandkids, I forget which) was on the line, asking for a "favor" (i.e., money) to which he readily agreed.  "Nice cell phone" I said, and he told me he was spending over $100 a month on it, including the "texting" plan, so he could oversee his grandkids.

It was, to say the least, an interesting conversation and an illuminating one - for me.  But for him, he learned nothing.  I tried to suggest some helpful tips, such as buying a secondhand car and paying a lot less for transportation expenses.  But as you might imagine, he shouted down that idea on the grounds that a 1-3 year old car with 30,000 miles on the clock was "unreliable" and a new car was better (never mind the fact that his leased car already had that many miles on it and was, incidentally, far over the mileage limits of the lease!).

Similarly, my suggestions about tithing were met with disgust - how could you not give to God?  I tried to point out that donating money to a church - a man-created organization that benefits man - is not giving to God himself.  But he would have none of it.

And of course, not "helping out" your kids by co-signing their loans or meddling in their lives would just be plain selfish, according to him.  I pointed out to him that most successful people "make it on their own" and that conditioning your children to be dependent all their lives was the ultimate form of cruelty.

But all of that fell on deaf ears.  No, no, the reality of the world was this:

1.  I was "lucky" because I was "rich".

2.  It is "selfish" to look after yourself before attending to the needs of others.

3.  Used cars are "unreliable" so it makes sense to spend a ton of money leasing new ones.

4.  He was "poor" even though he made more money than me and had nicer shit than I did.

And so on and so on and so on.  People make the lamest excuses for the lamest sort of financial behavior - that debt is good and that chasing the almighty deduction is the best thing in life.  But they are all lies - lies told to ourselves.

And then it dawned upon me.  I wasn't going to "convert" him to my way of thinking.  Not even one little bit.  Not one iota.  Not even a hit or a suggestion.  He wanted to bitch about how rotten he had it and how "lucky" I was - even though he made more money than me, and I merely sacrificed more and spent more wisely.  And this was because the television told him he was a victim - and he watches 4-6 hours a day of that drivel.  And not surprisingly, he suffers from depression.

And suddenly, I didn't feel sorry for him anymore - or any of his sad-sack "oh woe is me" bullshit stories.  In fact, I felt a revulsion and repulsiveness toward him.  It was hard to still like him.

And I started to realize that I don't feel "sorry" for most of the middle-class poor in America, who squander what little opportunity they have on stupid things like payday loans, $5 ATM fees, and financed furniture.

"They don't know any better" my Liberal friends tell me.  But I have to wonder, do they?  Or are they merely maximizing the enjoyment of their lives with new cars, beer and cigarettes, at the expense of their future lives - and everyone else, when we have to pay their bills when they come due.

Fuck the poor.  If you want to be a stupid  dumb-ass and squander all your money, fine.  But don't come whining to me, trying to tell me your stupid financial choices were, in fact, smart ones.  And don't accuse me of being "rich" merely because I keep to a budget and you choose to squander.

And you know why I say this?  Because when I was younger, I used to do the same stupid things, and no one ever felt sorry for me.  So today, we are supposed to get all boo-hoo over some idiot who can't make his jet-ski payments or spends $100 a week on cigarettes?

Sorry, but no sale.  And I'm starting to get more than a little annoyed at all the folks in this country who are not "truly needy" but nevertheless want us all to think they are "victims" of one sort or another - and demand and deserve our sympathy and money.

We should not reward poor choices.  We should not reward stupidity.  Reality should be a harsh slap in the face to such folks - to teach them to wake up and act responsibly.   But alas, today, it rarely is.