Thursday, June 28, 2012

Vanity Tags? Uh, No.

What sort of slave polishes their shackles and is proud of them?

Vanity tags were a real novelty in 1970 - very few States offered them, and few folks bothered to get them.  However, in the last two or three decades, the use of vanity tags has taken off, as even ordinary middle-class people have started to order them.

States love them, because they generate a lot of revenue for the State.   And in addition to vanity tags, you can get promotional tags promoting everything from the pledge of allegiance, to your college football team, to "right to life", or save the dolphins.

And the cost?  Usually just a low, low $50 to $100 or so.   It sounds appealing - an amount small enough to put on a credit card, but not enough to worry about.   Except, of course, that every $100 you add to your credit card is $100 less you own - and $100 more you owe.

And every year, when you renew the tag, an additional $25 to $50 is added to your registration fee.  So, like any other recurring subscription expense over time it adds up to a lot of money. Cutting recurring expenses in your life is utterly important - they seem trivial and small, but added up, over time, they compound into a ton of dough that is subtracted from your net worth.  Taken alone, they seem small, so why not indulge?  But that is just the point - a small expense, repeated and compounded over time, adds up to a lot.

For example, if you decide that you just have to have a "DUM ASS" on your license plate, and pay $100 for the plate and an extra $50 a year, over a 45-year working life, that would compound, at 7% to $17,387.83

Yes, that's right.  Using the MoneyChimp Compound Interest Calculator is a real insight into your personal expenses.  $50 a year can add up to seventeen thousand dollars, over a lifetime, thanks to the miracle of compound interest.

Is it really worth it?   And let me guess, you have these on two cars, right?  That's enough money, over time, to buy a nice car.  Thirty grand so you and the missus can be "unique" like everyone else.   Again, I'll bet you didn't see that one coming, did you?

But what about saving the whales?  What about these great programs my license plate "sponsors"?  What about it?   Of the money donated through the plate, the DMV usually gets a cut.  And let's face it, if you want to give the endangered whales $50 every year, why not just cut them a check?

Oh, right, you want everyone to know how concerned you are about the whales.  In other words, it is a classic "I'm better than you!" status-seeking behavior.   Those other people out there, probably whale-haters, right?  They aren't as sophisticated and caring as you are - particularly that asshole tailgating you in that SUV with the vanity tags labeled "ISHMAEL".   Arrrrrrg!

So to me, vanity tags are a stupid waste of money.  They are just pure status-seeking behavior, and since everyone has them, they don't convey much status anymore.  In fact, you are more likely to see them at the trailer park than on millionaire's row.

And they don't exactly make you anonymous, either, do they?  Not that you are planning on robbing a bank or anything.  But the same people who whine and moan about "privacy rights" on the Internet, or how Google Street View caught a pix of them entering the porno, are the same ones who basically label their cars with a giant "LOOK AT ME!" sign.  You either want privacy or you don't.  Vanity tags is one way of don't.

Cutting expenses in life isn't easy.   And you have to examine each expense - no matter how trivial - and see how they add up.  There is no simple or easy way to economize - despite what politicians want to tell you.  Rather, you have to make many small painful cuts in your budget, that overall, add up to huge reductions, particularly, over time.

Unnecessary expenses are the easiest to cut - no matter how small.   Vanity tags are unnecessary.

Note:  The above image is courtesy of Acme License Plate Maker - go online and create your own vanity tags!