Monday, September 29, 2014

Seven-Year Car Loans?

Bill Ford, Chairman of Ford Motor Company, recently made news by decrying seven-year car loans and other financial gimmicks.   Why is he against these, if they sell cars?

The real reason our economy had a meltdown in 2009 was because of funny money.  Banks were offering loans that didn't require any financial background checks, and some of these loans had "optional payments" which meant that the balance on the loan increased over time.  Other loans had low "teaser" rates that then skyrocketed after a few years.  The thinking was, the house would be worth so much more, the owner could "flip" it and make a huge profit - or refinance at a lower rate.

That didn't work out, obviously.

And the fault for all of this wasn't the banks or the government, but the undisciplined idiots who signed these loans.   And when I say "undisciplined" I am referring to financial discipline, although most of these folks were ill-mannered as well.

In that era, consumer loans were being offered at low rates and for long terms, for everything from Boats to RVs, to Jet Skis - and you-name-it.   Banks are still offering 20-year loans on Boats and RVs, which means you will be "upside-down" on a boat or RV for most of the term of the loan, as I noted before.

Car loans were less of a problem, but terms for those were rising in the 2000's, from the traditional 36 or 48 month loan, to 60 or even 72 month loans (five and six years).   Seven year loans are now being offered.   Again, this does not mean you have to take them!

Worse yet, many car dealers will "roll over" upside-down loans into a new car loan to make a new car sale.   I recently was at a campground where I met a loan officer for a bank, and he told me of a client who came in and borrowed $40,000 for a $30,000 car.   The additional $10,000 was to pay off the negative-equity on the trade-in.

I had a friend who did this same thing.  She was young and liked to party and wasn't very astute with money or about cars.  She bought an economy car and put it on a five-year loan.  She never cared for the car.  She never washed it, waxed it, or even cleaned the interior.  She never changed the oil.  She regularly forgot to put gas in it, and ran out by the side of the road, regularly.   She was a very irresponsible person.  Mental health and drug issues were part of the problem.  Laziness and stupidity were the other half.

When the car died of a seized engine, she rolled over the negative equity on the loan into a new car - and the car dealer was more than happy to do this.   She then repeated the process, and trashed another good car (a Japanese econobox that should have lasted 10 years with proper care) and repeated the process yet again.

But of course, you can only do this sort of thing so many times.   Eventually, there was more negative equity in the loan than the value of the car.  And the car dealer didn't help matters by charging her an exorbitant price for the car and tacking on a lot of junk fees (as did the loan company).  And the interest rates, well into the double-digits, were murder.  As the payments increased with each iteration, she could less and less afford the car, and was late on payments, which made her loan rates with each refinance even higher.  It was a death spiral.  Eventually, she ended up in bankruptcy.

Car dealers will sell bad deals like this.  You don't have to take them.  But people do, because they want a new car, they are not particularly smart, and maybe drugs, depression, or other mental health issues are involved.

Such deals are bad for the person involved.  They are also bad for society as a whole, as people who are dragged down by bad deals are a drag on society, and we all pay for their eventual bankruptcy, in terms of higher interest rates and costs, if we have to borrow.

It always amazed me that loan companies would even do deals like this.  After all, bankruptcy is a foregone conclusion - so why loan money when you know the loan will blow up?   You will lose money on the deal, no matter how high an interest rate you charge.  But then again, they collect so much in interest before bankruptcy, that they get all of their money back and then some.  And today, in bankruptcy, the balance may be "worked out" so they get more.  In the old days, when debts were wiped out in bankruptcy, lenders were more reluctant to loan money to insolvent people.  Hmmmm.... maybe we should go back to that standard.

But the answer is even more complex than that.   The persons originating the loans are paid to make loans, not make good loans.  So they offer bad deals, often knowing they are going to blow up, as no one at the loan company seems to care if the borrower is a bad credit risk - as they re-sell the loans as bundled investments.   They charge extra interest and fees to cover the "risk" of course, but how much do you have to charge in interest if the borrower is a guaranteed default?  To me, it makes no sense.  And it is why our economy collapsed in 2009, when all those bad loans, which were sold to investors as good loans, did the inevitable default.

Today, we risk going back to the same old problem.   Bill Ford is sounding the alarm about seven-year car loans.  Why is this?   Because while it might sell cars today, it means you are probably killing your market tomorrow.

Simply stated, a borrower who signs a seven-year loan may be upside-down on his loan for a significant period of the loan.  When he wants to trade-in his car after three years (which Ford would like you to do, but is probably a bad idea), he will still owe money on it, and the amount of equity in the car may be insufficient for a down payment on a new one - if in fact he is not upside-down.   So either he walks away from a new-car sale, or he ends up borrowing more in the next car (financed over an even longer term, to make the monthly payments smaller).

Granted, a car may last ten years or more.  But being in debt the whole time is a bad idea.  And in fact, you may be upside-down on the loan.   Let's use an example, a $25,000 car loan at 5% interest for seven years, commencing January 1, 2015.  The monthly Principle & Interest would be $253.35.  The total payments would be $29,681.21.  The total interest would be $4681.21

The amortization table would look as follows:

Date Interest Principal Balance
2015 $1,180.51 $3,059.66 $21,940.34
2016 $1,023.98 $3,216.20 $18,724.15
2017 $859.43 $3,380.74 $15,343.40
2018 $686.46 $3,553.71 $11,789.69
2019 $504.65 $3,735.52 $8,054.17
2020 $313.53 $3,926.64 $4,127.53
2021 $112.64 $4,127.53 $0.00

Now, your typical car depreciates in value by 50% every five years.  As I noted in another post, this is a pretty inflexible rate.  Cars with "low" depreciation may be about 40% and those with "high" depreciation about 60%.   So please, no arguments about how a Jetta TDI is going to "hold its value" because it isn't - it will depreciate down to nothing in short order, as will a BMW or a Honda or whatever.   Depreciation is the largest expense in owning a car, particularly a new one.

If we apply this 50% every five years rule, we see that the vehicle doesn't depreciate linearly.  At five years, it is worth $12,500.  At ten years, $7250.   Thus, depreciation is a decaying exponential type of curve.  The exception, of course, is the first year.   A car can depreciate by as much as 10% the moment you drive it off the lot, which is why in the past, lenders required at least 10% down, in order to get a loan.

Thus, after five years, it is possible our buyer actually has equity in the car, as the loan balance is $8054.17 and the car may be worth $12,500 (although if it is an American car, perhaps slightly less).   In the interim, however, the buyer maybe "upside-down" on the loan, particularly in the first three years.  The buyer cannot re-sell the car without paying to do so.

But of course, I am assuming that the borrower can get a loan at 5%.  Despite the "come on" loan rates being bandied about by the car makers, most folks, even with good credit, are going to pay about that much for a five-year loan.   A seven-year loan for someone with bad credit could cost more.  And even small increases in interest rates make big changes in the paydown rate.

Bill Ford wants to sell cars - and more often than every five years.  So you can see where he is coming from.

But what about your perspective?   As I have noted in the past, the best deal is to pay cash for a late-model secondhand car, and then driving it forever.   If you can keep a car for ten years, it pays off in lower monthly costs.   Even if you have to get a short-term loan, in later years, you can drive a car with no monthly payments - which comes in handy, as the incidence of repairs and maintenance will go up.

And there is another rub with these long loan terms.  Many folks are chagrined to discover that they've signed a five-year loan, and the warranty on their car is less than that.   Four years into the deal, they need to buy new tires, pay for a brake job, and other repairs - and still make car payments at the same time.   You see this a lot on BMW discussion groups - delayed buyer's remorse, is what I call it.

They bought a new BMW which had a four-year warranty, but paid for it on a five year note.   After four years, it needs $1500 worth of tires, and maybe a brake job and a host of other repairs, which if done at the dealer, could cost thousands of dollars.   And the owner realizes he is still making payments on the car, which is now worth less than half what they paid for it.  So they go on a BMW discussion group and bash BMWs as unreliable.

And this could even be worse for Ford, whose cars depreciate even faster and are far less reliable than BMW.  As a result, a buyer could find himself making payments on a car that is long out of warranty that also requires thousands in repairs.

In the olden days, car loans were paid off long before this situation occurred.

So I see where Bill Ford is coming from.   Seven year car loans are bad for business on a number of levels.  And bad for our country.   And needless to say, bad for the individual.

If you are looking at a seven-year car loan, chances are it means you really can't afford the car.   Look at a cheaper car and a shorter-term loan instead.  Or better yet, buy secondhand and pay cash.

Sunday, September 28, 2014

Skype lookalike site and Astromenda malware

When installing programs from the Internet, make doubly sure you are on the right page.

I am not a big fan of Skype.  The concept is neat - the idea of a video telephone.  But the problem with video telephones is what the Bell System (no relation) discovered back in the 1960's - people really didn't want a video phone, as it turns out.   Even today, with the technology available on the web and almost everyone with a computer (or smart phone or pad) having the hardware to connect online, very few people actually use video phone.   Kids today rather text than even talk!

But a friend of mine uses the service and I thought, "what the heck, I'll re-install Skype and call him!"

Yes, re-install.  I had removed it from my computer as it slows down most computers, and thus is a PITA to have loaded.   And the problem with Skype is that unless the other person is on their computer all the time, well, you aren't going to reach them.   You have to call or e-mail ahead of time to arrange a Skype call, and this takes all the spontaneity out of it.  So I gave up on using it.

I Googled "install Skype" or something of that nature and clicked on the first hit which appeared to be a Skype install page.

It wasn't.

I should have noticed a problem when it diverted me to instead of

How did this happen?  It is a mystery to me.  I have adblock plus on the computer, so Google advertised hits (which are often links to virus sites) are blocked.   When I tried again, later on, the real came up as the first hit.

(Conspiracy theorists would note that Skype was bought by Microsoft, a deadly and mortal enemy of Google in the O/S marketplace.   It would help Google if fewer people installed Skype and instead installed a Google alternative.  So, could this redirect to a rogue site be an accident, a happy accident, or by design?  Not hard to write code that redirects every 10th search to a malware site!).

Anyway, I started to become suspicious when the "installer" dialog started asking me if I wanted to install a lot of junkware (anti-virus programs, weatherbug, registry scanner, etc.) and I finally closed it out.

Too late.  On both Explorer and Firefox, the default search engine was set to "astromenda" and the home pages to astromenda.  In order to fix this, I had go into the tools section and reset both browsers.

Removing the programs proved more difficult.  The uninstall feature of windows didn't seem to work completely.  A malwarebytes scan showed a lot of registry entries, some stray files, and the like.  A search of the hard drive turned up an empty astromenda directory.   And on my desktop, a link to an astromenda game.  This thing really embeds itself!

What is all this nonsense?  Garbargeware.   They put ads on the pages you display and get paid for it.  And they re-direct your searches to other sites.

I've seen similar redirects on other folk's computers - along with junkware like weatherbug.   I can assume that they clicked on a similar link and fell into the rabbit hole.

Of course, people say, "Well, you should be more careful!" - which is classic blame-the-victim mentality.   But I was careful.  I run Microsoft Security Essentials, Malwarebytes, and Spybot.   None of them warned me (nor did Firefox) that I was being redirected to a rogue site.   And the search from Google somehow redirected me to this bogus site.   How?  Beats me.   I thought I could detect these things.  It is getting harder and harder to do!

Spectator America

In America, we no longer do things, but rather root for other people to do things.  We are spectators of life, not participants.  Today, Julia Child would never have been given a television show, unless she started throwing pots and screaming at people.

The camper has a little flip-down television which we use to watch DVDs.  The other day I turned it to tune off-the-air programming and was appalled at what was on the television.

Wow, was that a mistake!

One thing that struck me was all the food shows.  Well, not real food shows, but "reality" food shows, where "contestants" competed to make a cake or something, and then all got mad at each other and threw pots in the kitchen.   Just like the motorcycle show, only with kitchenware.  The point of the show is the competition and controversy (both manufactured) which we are supposed to be interested in.  It was Professional Wrestling in the Kitchen!

Apparently, the plebes love this shit - seeing people argue, but also seeing people compete.   We have all these reality shows today, and most of them are competitions of one sort or another - Dancing with the Stars, America's Idol, The Great Race - you name it.  We even have shows where people compete to clip coupons or pick through the trash.

And always there is some sort of "controversy" you are supposed to have a valuable opinion about.  And you have to have a favorite dancing star or trash-picker or whatever.  Which member of Duck Dynasty are you rooting for?

And of course, there is (and was) always sports.  You root for your team, as a spectator in the stands.  You don't actually play a sport, but you go to a "sports bar" and be a pretend-jock, washing down gallons of lite beer and screaming at the flat-screen television.  Sports Fandom has taken off since I was a kid, and has reached ridiculous proportions.  Back in 1968, people didn't paint their cars in their team colors.

What struck me as odd was how we have changed over the years.  We used to actually DO things in America, not just watch others do things.

For example, these food shows are not the old "how to" shows that taught you how to cook.   Network executives derisively refer to those "old school" shows as dump and stir as the cook would cut up food, dump it in a pot and stir.   It was not really exciting to watch, unless you wanted to learn how to make the item in question.  You know, learning and all that shit.

Today, it is all about food you would never make at home - often ludicrous foods made in crazy contests from arbitrary ingredients (a box of cracker jacks, a side of meat, and 100 ball bearings).  And I am not being facetious.  One of these cooking "shows" did just that (minus the ball bearings, of course).

If Julia Child were coming up today, she would never have gotten on the air.  Dump and stir just doesn't cut it, Julia!   Teaching people that they CAN make French cuisine, without having to attend the Cordon Bleu - that just won't do!  What she taught (and she taught) was empowerment - that you CAN do things that initially seem hard to do.   That we are all capable of so much more in our lives.

That sort of thing is no longer on television.   Today, the so-called "how to" programs generally advise you to "leave it to the experts!" - whether it is "This Old House" or "Car Talk".   Either they don't want the liability when someone's car slips off the jack and crushes them to death, or they'd rather steer the viewers to the advertisers (excuse me, SPONSORS, as PBS doesn't have ads, right?).

Now, some of you are going to say, "Well, what about Martha Stewart?"   Well, what about her?   First of all, her star has faded since she went to jail.  No one watches her anymore.  And back when they did, it was not to learn "how to" make things, but to learn only that making things was incredibly complicated and you cannot possibly "do it yourself" like she did.   She had an army of assistants making her 100 hand-made Christmas Ornaments (which took 10 hours each to make).   No one in their right mind would do that.  She taught helplessness, not self-empowerment.   So it was no wonder everyone was glad when she was arrested.

Empowerment is important.   If you are a spectator in life - a consumer as they want to call us - then your only power in life is in choosing what to purchase.   You cannot create, you cannot control.   You are at the mercy of merchants and retailers and service providers.

And increasingly, this is what our Corporate Overlords want us to do.  They want us to be passive, weak, and unempowered.  They want us to be ignorant as to how things work - even basic finances.    And since so many of us are unempowered, we end up believing that being "smart" about money involves clipping coupons or scoring cash-back bonuses.   We end up playing their game, because we don't know how the real game of life is played.

Being a spectator in life is not living.  Having a favorite team or a favorite television show is not the same as having a real personality.   You are more than a collection of "Likes!" on Facebook.   You have real talents and abilities.   And watching television isn't one of them

* * * 

Sighting of the day:   In Natchez, Mississippi, the "Family Check Cashing and Payday Loan Center" - as if putting "Family" in the name makes it all OK.   Here's a hint:  If you are supporting a family, the last place on Earth you should be going to, is a check cashing center or payday loan joint!

Friday, September 19, 2014

Live from the Grand Ole Opry! Parker Millsap!


We saw Parker Millsap at his Grand Ole Opry debut.

Keep an eye on this kid, he's going places!  Sort of a cross between a young Johnny Cash and Elvis!


That was his opening number, which blew the audience away.  21 years old.  Not bad on the eye, either!
Here is his new video on NPR, "Truckstop Gospel" which he also played.  Sort of confused the audience a bit, I think.

An interview by a clueless NPR reporter trying to be trendy:

Let's just hope he doesn't get fat like Elvis!

Thursday, September 18, 2014

The RV Industry's Dirty Little Secret: Quality

Many RVs are financed on loans as long as 10-20 years.  Many RVs don't last nearly that long.

UPDATE:  Read this article (in .pdf format) by a journalist who covered the RV business.  He became disillusioned after he actually bought an RV and realized how poorly they are put together and how the financing can bankrupt many owners.   He gives the industry 20 years, tops, before a massive reshuffling occurs.  Maybe a bit dramatic, but who knows?

UPDATE 2023: For some reason this posting is getting a lot of hits lately.  The pandemic fueled a lot of RV sales ("Covid Campers") and people rushed out to buy them, at premium prices, and manufacturers cranked them out in a hurry - never a good sign.  Now it is 2023 and the RV dealer lots are overflowing with inventory and the "Covid Campers" are finding out their three-year-old RV is leaking.  Maybe that's why this article is getting traction.

Our fiberglass RV (Escape 21) was sideswiped by a truck with minimal damage.  Had it been a "stick built" camper, it would have ripped the side off.  An Airstream?  Dented every panel!  We loved our Casita and sold it when it was 20 years old - for what we paid for it.  Fiberglass RVs are small, but they are durable!

Others are not so lucky and often get very upset when this expensive "thing" turns out to be less than they thought it would be.  Spending every vacation at the factory, trying to get your motorhome fixed, could lead to frustration - and jail time!

* * * 

After owning four five RVs over 30 years and looking at hundreds more, (as well as visiting various RV "factories" and seeing how they are screwed together)  I can say I have learned a lot about the RV business.  A lot of it is like touring a sausage factory - there are things you wish you hadn't seen.

The dirty little secret of the RV industry is Quality.   Very few RVs are quality made and very few outlast their payments.   (And payments today can last 10-20 years.  Even if they don't fall apart, most owners are "upside down" on their loans).   Let me explain.

To being with, all RVs are basically the same.  Higher-end coaches might have nicer amenities in terms of floor coverings, wall coverings, and gadgets, but the rest of the hardware, from the hot water heater to the refrigerator and water pump, are about the same across all levels of RV pricing.   The only exception to this rule are the ultra-high-end million-dollar "rock star" buses - but few can afford those (even the people who buy them).

Most RVs are hand built, one at a time.  This sounds great to the novice, until you realize that assembly-line machine made products are far more consistent and reliable to own.   RVs are not built on an assembly line per se, but rather built up in a warehouse by an army of young men (sometimes Amish) who use staple guns, screw guns, and sawzalls to cut, staple, nail and screw (and glue) each coach together.  

The cost of labor is high, and since each coach is built individually (and no two are alike, it seems) there is no savings in labor as in an assembly line.   On the assembly line, a worker has a specialized job and can get very good at it - and very efficient.   In the RV "factory" the coaches are built like houses - one stick at a time.

And since the labor costs are so high and the target prices fairly low, this means a lot of corners have to be cut in the assembly process, as well as the quality of the materials used.

Compounding this problem are the common design elements of the typical box trailer or motor home.  Rubber roofs and laminated walls sound sexy and all (and look cool in the showroom) but the reality is, these items wear out rapidly, causing leaks, which spell doom for a coach.

In the olden days, trailers were made of sticks and staples, and then skinned in aluminum, even the roof.   So long as the seams were kept caulked, the trailer would stay sound.   And maybe that is one reason you see a lot of those older trailers still on the road.   The "box" design of such trailers does provide a seam running around the entire trailer on the sides.   So long as the self-leveling caulk used to seal this seam remains intact, no leaks will occur.   However, sunlight and ozone, and acid rain, and heating and contracting with the seasons - not to mention flexing going down the road, tends to crack this caulk, causing water to ingress.

When water gets into a trailer, mildew forms, and rot is not far behind.  In a matter of a few months, floors can rot out, ceilings can collapse, and the trailer becomes essentially worthless.,

Modern trailers exasperate this issue due to the use of laminated fiberglass walls and rubber roofs.   When rubber roofs (EPDM) first came out, they were hailed as an advancement.  No more "rocks in a tin can" effect, every time it rained.  And they were less likely to leak and would last longer!   Sadly, their advertised advantages turned out to be untrue.

When going down the highway, the rubber roof can bubble up like a balloon.  This is very expensive to fix, often costing more than the trailer is worth!

EPDM rubber roofs seem to last 5-10 years, tops, in the harsh sunlight.   They get chalky and then when it rains, white powdery stuff runs off the roof.   You can try to treat the roof with a cleaner or a sealant, but this is a messy and expensive process and needs to be repeated over and over again.  Some folks try to use conventional roof sealant (tar) with disastrous effects (it dissolves the rubber).

EPDM rubber roofs have worked well in houses - why not in RVs?   Well, simply stated, houses don't drive down the road at 70 mph.   At at 70 mph, aerodynamic effects can cause a rubber roof to "bubble" up, as air traveling over the coach forms a vacuum.  Both our 27' 5th wheel trailer and our 21' Class-C Motorhome had this problem - with the front portion of each forming a 3' diameter bubble due to the vacuum caused by air flowing over the blunt front end.  Fixing this isn't easy.  A new rubber roof can cost thousands of dollars - often more than the coach is worth at that point.   If it starts leaking, well, the coach is toast.

Fiberglass laminated sidewalls make the problem even worse - or more apparent.  Again, when this technology premiered, it was hailed as a milestone.   Prior to that, RVs had aluminum siding on the walls, much like a house (but interlocking more tightly) and people tended to think it looked cheap.   On the other hand, aluminum never bubbled up or wore out.

A bad case of delamination.  In most cases, this cannot be fixed for less than the price of the coach.  Even a small amount of delamination is unsightly and costly to repair - and a sure sign of leakage.  It never gets better, either, only worse.

Fiberglass laminates use sheets of thin fiberglass (gel coated on the outside) which are glued to luan plywood which makes up the outside of the coach.   When new, it looks great and looks "high end" - with large, smooth walls, usually adorned with graphics.   But when water comes in - through the seams at each edge of the coach, the laminate starts to "bubble up" and it looks like hell.

Finding these leaks can be next to impossible.  Water can travel a long way from a leak to the spot where you notice it.   So bubbling at the bottom edge of a coach could be caused by water leaking at the top edge or from the roof.   People try to chase down these leaks with mounds of silicone caulk.  It rarely works, but it does make the coach look even worse - and more unsalable.

Why are leaks so bad?  Rot and mildew.  On our Class-C, the sides over the cab started to delaminate at the bottom (and had started when we bought it used).  One day while making the bed, I was concerned that the mattress was wet.  I pulled it away and realized the entire platform had rotted out, and was filled with water.  The luan plywood had the texture of a damp sponge - as did some of the 1" x 2" "structural" members.

Off to Lowes for new plywood and tons of caulk.  It was all fixed up, but the delamination remained and we never were sure the leaks were all found.   In addition to the problem of water traveling, water can literally be forced into the coach when you drive in the rain.  So a leak at the front of the coach might produce rot at the rear, by the time the water settles.

And once you have a leak, delamination, a sagging ceiling, a rotting floor, or a stain in the ceiling, well, the resale value of the coach plummets.   Fixing these problems is anything but cheap - often exceeding the cost of the coach itself.  So most folks try to live with it, while they can, like a slow-growing cancer that is spelling doom for the RV eventually.

The dealer next door to the campground here in Nashville has a lot of shiny new RVs for sale on the lot.  They look nice, but when you start to look at the details of construction, you see loose parts and corners cut, and shoddy workmanship.

And when you walk down to the end of the line, where the dealer has very used trailers and motorhomes for sale, you see what these shiny new units will look like in a few short years.   I call this row of sad trailers the "leakfest" as most have delamination, leaking, rotting, and mildew issues.  Open the door and you can smell it - it hits you like a wave.

And you see this all the time in fairly new trailers.   A dealer in Florida tries to unload these lemons on people from South Georgia, advertising them as "ideal hunting camps".   One trailer, less than three years old, has a huge leak at the front seam (where water is forced in at 70 mph).   The front edge is gobbed with a mound of caulk.  The fiberglass is delaminated on the side.  Inside is a mold stain on the wall and a 2' diameter HOLE IN THE FLOOR where the floor rotted through.   "You can fix that!" the dealer helpfully offers.   Yes you could, I guess.

But the sad thing is, here is a trailer that sold new for $10,000 and three years later is being sold for $2,000.   Things should last longer than that, right?  It is even more tragic when it occurs to higher-end trailers and coaches, which it does, with regularity.

A tire blowout on your car usually doesn't damage the car.  Not for an RV!

And then there are blowouts - another little secret.   Most RV wheel wells are just plywood boxes with a plastic "fender" screwgunned to the side.   When a tire blows out (when, not "if") it can tear the whole side of the trailer or coach apart.  The plastic "fender" is destroyed and often part of the siding of the trailer is torn off, leaving a large black rubber mark down the side.  This is hard to fix, as the fenders may not even be available.  Two of the campers in the leak-fest section showed signs of blowouts - that were unrepaired.   We had two issues with this - on our 5th wheel and the Class-C.  There was some damage (cracked fenders) that we had to live with - dealers were unable or unwilling to order replacements.

(Why do RV tires blow out?  Several reasons.  Some folks don't check tires pressures very often, and when a trailer tire goes low, it may be hard to detect from the tow vehicle while driving - which is why I have a trailer tire monitor on our new trailer.  Others think that 32 psi is the "standard pressure" for a trailer tire when it should be closer to 50 or more.   RVs sit for long periods of time, and tires for a motorcoach or trailer can dry-rot long before they are worn out.   Motor coaches are a particular problem as the tires can run close to $1000 apiece and folks are reluctant to replace older dry-rotted tires that have "perfectly good tread left" on them.   Blowouts just happen.  They shouldn't tear out the side of a coach or trailer!).

And let's not even talk about slide-outs!  They leak, they jam, they sag, the bottom part juts out.   A big hole in the side of a camper than flexes as it goes down the road - what could possibly go wrong?  How many times have you seen some hapless soul in the campground waiting for the "mobile RV repair" guy to arrive because the slides on his $250,000 motorhome won't slide in?

(Slideouts bear special mention because it seems every RV maker puts a "fuse" on the slideout motor, but not in the main fusebox, but hidden behind the sofa or some other weird location in the coach.  So you call the "Moble RV Repair" guy and he knows where the fuse is hidden.  A few coaches, such as my friend's Cardinal 5th Wheel, have a manual crank as a backup - many others, such as my bother-in-law's "Titanium" do not.  The motor breaks and you are stuck.  Funny story, the slideout motor on my friend's Cardinal burned out because they leaned back in their recliners and mashed the slideout switch.  "We kept hearing this funny noise every time we watched television!  After a few weeks, we smelled this burning smell!"   Fortunately, we were able to crank the slide in with the provided crank handle.  Others are not so fortunate).

OK, you say, that's a low-end unit.  Better-made RVs will last longer!   Yet in the park here is a fancy motorhome with four slides - and delamination on three of them.

RV makers know what sells RVs - glitz and gaudiness and as many flat-screen televisions as you can wedge into a rig.   People want shiny-shiny, and oftentimes these RVs are nicer than the houses their owners have (as they are pre-decorated to a theme and the furniture is all new and actually fits the space).

Quality is a hard selling point, as most folks can't recognize it, and it is hard to discern even to the trained eye.   Usually, you have to keep something for a few years to know if the quality is any good.  And if it is, then it develops a reputation for quality.

Ahhhhh!  But the other secret of the RV industry - the name change game.   There are hundreds, if not thousands of brand and model names for RVs.  Each company has several division names, product line names, and model names.  And these names are routinely retired and new names put in their place.  So you might think the "ACME WEEKENDER FUNTRAILER 25" is a good trailer, after owning it for five years.  But the problem is, ACME dropped the FUNTRAILER model three years ago and dumped the WEEKENDER line last year.  And this year, ACME was bought out by AJAX and now the ACME name is gone.

And maybe the name game is intentional.  If an RV develops an odious reputation, well, you don't have to worry about it for long.  Just change the name.  Heck, some airlines do this, after a major crash.  And if you wait, say, five years or so, you can bring the name back, as the buyers you pissed-off before are long gone by now or have moved on to a new brand.

One mistake we see some oldsters doing is to buy an RV in retirement, spending an awful lot of money, and then getting a "tow behind" to pull behind it.  For the first few years, everything is OK, but like any motorized vehicle it gets old and worn out.  Pretty soon, you staying in a delaminated, chaulky older-style motorhome, pulling a Saturn behind it, and wondering where all the fun went.

We think, sometimes, of maybe getting a larger RV.  But the heartbreak of RV quality prevents us from doing so.   Our old Casita, now 15 years old 20 years old (!!!) is made of two heavy pieces of fiberglass, joined in the middle in a horizontal seam.  Rain runs right off, so there are few opportunities for leaks.   And the trailer thus looks like new, after two decades.   Keeping it indoors when not being used, helps, of course.  And its small size makes that possible.

UPDATE:  After 15 years of ownership, we sold the Casita for nearly what we paid for it!  That's a quality camper - and a "cheap" one to buy, too!   Our new Escape 21 is made from ONE piece of fiberglass!

We keep looking at larger trailers, but quality - and layouts - often turn us off.  An "upgrade" should be an upgrade in every regard, right?  Why go to a larger trailer that has a smaller bathroom?  (many do, which I cannot figure out.  RV makers are not very space-efficient, and often waste valuable inches in their designs by using standardized cabinetry and furniture that encroaches on personal space).

Maybe someday, someone will build an affordable quality RV - on an assembly line, without staples and wood, and without seams and leaks - an RV that is durable and simple and easy to use and easy to maneuver, and lasts a decade or longer with minimal maintenance.

Well, maybe we already have it.

After 15 years nearly 20 years, the Casita looks like new.  The shell is as thick as a boat hull!  No laminated construction to delaminate.  No rubber roof to replace. No seams, other than the belt line, which is fiberglassed together.  Even the wheel wells are solid fiberglass, and survived a blowout with mere scratches.  And they don't change the name every five years, either!  The thing is a tank!

UPDATE October 2016:  For some reason, this posting is getting a LOT of hits lately, so it must be linked from some website or discussion group.  Since I wrote this posting, not much has changed.   My Brother-in-law just bought a 32-foot 5th wheel used, for about $6500.  It is about 10 years old and worth about 1/4 of its original price.   It is starting to leak to due pinhole leaks in the rubber roof.  And the slideout is, well, a mess.  The "seals" all needed to be replaced, and how they are attached is a travesty.  The slideout itself is starting to settle onto the frame.   These units are not quality built, to say the least.  The good news is, he paid hardly anything for it, so if he gets 2-3 years of service out of it, good for him.

The poor bastard who paid $40,000 for this thing new really lost his shirt.

In a way, my brother-in-law has the right idea.  You can find used trailers like this all day long for hardly anything.  Buy them, use them, throw them away, and buy another one.   Far cheaper than spending $50K or more on a new unit that will be a pile of delaminated fiberglass and rotted wood in a few short years.

P.S. - why, oh why, would anyone use CABLE ACTUATORS for their sewer and grey water valves?  What a fucking nightmare to try to repair!  The actuators on our Casita are exposed, but easy to work on and fix.

Our newest RV, an Escape 21 - all fiberglass, no leaks, no delamination, no rubber roof!  And yes, we paid cash for it, because they don't cost a fortune.

UPDATE:  A reader writes, "Well, what you say is true, but that is only cheaper RVs!  If you buy a more expensive coach, you won't have these problems!"   Maybe so, maybe not - I see a lot of "expensive" coaches also have delamination problems.  Also, I meet a lot of "high end" coach people who usually have a "punch list" of items to be repaired, again and again, over the years. "Going back to the factory" becomes a regular part of their yearly vacation routine - which sometimes goes horribly wrong.

Then there is the issue of financing.   They spend a half-million on a coach and find out that it is worth $100,000 less than the loan balance.   I hope they like it, because, like a friend of mine, they are stuck with it for a decade or more, unless they can find $100,000 under a mattress.

NOTE: The RV industry would rather you didn't read this.  For some reason, this posting is getting a LOT of hits today, and in discussion groups, shills for the RV industry as well as useful idiots are shouting down what I have to say.  The latter are people who just sold their primary residence and blew it all on a motorhome.  They say, "This isn't true!  It can't be true!  Oh, please God, say it isn't true!"

Sadly, it is, and like my friend who bought the "dream coach" only to later have to take out a home equity loan to help pay off the loan balance.   An RV can be a financial nightmare and bankrupt its owner.  I've seen it happen - more than once!   20-year loans on depreciating assets that last less than 20 years make no sense at all.

If you can't pay cash for a toy, then don't buy it.  And no, "full-timing" for a few years doesn't make it "make sense".   An RV is not a "home".

UPDATE:  This couple got so mad at the manufacturer of their RV that they rammed their motorhome into the repair bay.  I think they are in jail now.....  Not a recommended procedure!

UPDATE 2021:  Many people who rushed out to buy hastily-made RVs in 2020 (and paid top price, too!) may discover that they really don't like RVing, but what's worse, are upside-down on their loan.  Now that Disney and the cruise lines are open, the surge in RVing may dry up, and a lot of lightly used units (and re-po's) flooding the market as the "Covid Campers" go back to whatever it was they were doing before they decided they "had to have" an RV....

Happiest Man in the World....

I just met the happiest man in the world.  Listen....

While camping, I ran into a guy who is probably the happiest man in the world.  He is about 10 years older than me, served briefly in Vietnam, and was then discharged.  With his military pay, he bought some land in the Northeast and built a log cabin.  Living "off the grid" for 20 years, he got a job.

He retired a few years back.  He said he was surprised when the Social Security Administration told him he would get $1300 a month in Social Security.   Sweet!   Then, unexpectedly, a mutual fund firm informed him that he had a 401(k) with over $100,000 in it!   Double Sweet!  He didn't even realize he had a 401(k).

So he and his wife now travel in their VW Westfalia camper and are happier than pigs in shit.

Why can't the rest of us be this happy?

Good question.

He has a modest house (now on the grid) that is paid for.  He has an older car that is paid for.  He has few expenses and with his Wife's Social Security, more than enough money to pay them.

That's all it really takes.

Most of us are not as easily amused.   We want an income in the six figures, even in retirement.   We want a fancy new car, or a big motorhome or a vacation condo.   We want all-expenses-paid cruises or trips overseas.

We want, we want, and we want.   And does this wanting and having make us happy?   Perhaps not.

Most middle class Americans would snicker at the idea that $1300 a month is a good amount of money from Social Security.   Most middle-class Americas would laugh at the idea of a $100,000 nest egg.   You need 5-10 times that much, just to retire these days!   Right?

Maybe.  Maybe not.   What you need to retire is just a penny more than you spend.    So long as you can do this, you too can be the happiest man in the world.

Wednesday, September 17, 2014

Media goes Ga-Ga over Apple, Again

We are told that the Apple iWatch is going to change the marketplace!  Yet other wearable watch phones (such as the Samsung, shown above) have been on the market for years, and have yet to change anything.

The media is going nuts over Apple again.  Bloomberg seems to love Apple stories, talking about Apple with bated breath.  I think they want to date Apple and go "all the way" in the back seat of Dad's Fury III.  Sheesh.

The reality of Apple is still the same.  The stock price soared two years ago to nearly $100 a share.  Then in plummeted to about half that.   Now it soars again to over $100 a share.   This is a pretty volatile stock.   If you bought Apple two years ago at nearly $100 a share, you are just now breaking even.  There are better things to invest in.

Yes, Apple has a decent P/E ratio for a tech company (less than 20, which compared to others, in the hundreds, is favorable).   But on the other hand, we are still talking about a tech company - and tech companies live and die by their next product announcement.   People seem to forget how many tech companies that once seemed like industry leaders have fallen by the wayside, when a new product fails to turn out as expected, or worse - a competitor offers a better product at a lower price.  Silicon valley is littered with the bones of such companies (or their hollow shells).

Apple's market model is premised on each new product being a "home run" with each product release being treated like a rock concert.  The Apple faithful line up at the Apple stores, in sleeping bags, overnight, to get the newest and latest Apple product.  Well, that happened for a while anyway.  I am not sure anyone is lining up for the latest O/S release or a new Apple watch.

And will wearable computers really be the next big thing?   Like I said, the Samsung watch (of which there are now three generations) hasn't really taken off in a big way.  It is a neat technical trick, but no one seems to have bitten on it yet.   Will a generation that has never worn watches suddenly decide that they need something on their wrist?   Who knows?  Maybe haberdashery will come back as well.

And then there is the the backlash against wearable computers.   Maybe watches will be accepted.  Maybe not.   Google has run into a wall with "Glass" in that people feel creeped out that a person wearing "Glass" (who looks like a dork, BTW) is filming them.   They even have a name for it - "Glassholes".

About two decades ago, I was at a party, and a friend of mine showed up with a watch that was also a primitive digital camera.   It was a neat party gag, as he went around taking surreptitious candid photos of people.   It was funny for a bit, but then folks got a little weird.  They felt, well, violated a bit.   And the idea of someone with such a watch-camera standing next to you at the urinal, well, was creepy.  Bear in mind that was in the 1990's.   My friend put away the watch-camera and never took it out again, the reaction was that negative.   I wonder if a "Glassholes" effect will hit the iWatch as well.

But again, who wears watches these days?   No one.  Which is why the Samsung phone watch isn't on everyone's wrists already.  The iWatch, in addition to being a "me too!" product, just isn't going to be as popular as the phone and pad.

But the name of the game at Apple is to sell the sizzle.  And Apple's press conferences had the air of a revival meeting, particularly when Steve Jobs was still around (he is alive and well and living in Argentina, according to Twitter).   But the new guy?  Maybe not such a big deal.

So they try to prime the pump.   The latest gaffe was automatically downloading a new U2 album to everyone's Apple device, as part of a free giveaway.   This was a marketing fiasco akin to Oprah Winfrey's giving away Pontiac G6's to homeless people.  "Pontiac - the car of the homeless!" - that basically killed off the entire Pontiac Motor Division.   And people say Oprah has no power.  She bankrupted GM!

The same was true with the U2 giveaway.   Something forced onto people for free isn't appreciated.   And if it is free, people assume it is crap.   I was never a big U2/Bono fan, but let's face it, their "Sell by" date passed a long time ago.   And if they had a chance at a comeback, well, this promotion blew it.   A whole new generation of listeners has learned that U2 sucks and they can't even give away their albums (angry Apple users demanded that the material be deleted from their i-devices).   The promotion backfired, in a big way.

But that is not likely to sink Apple or even affect the stock price.   It is indicative of what is wrong with Apple, at a fundamental level.   Again, Apple's marketing plan is based on hitting home runs every time.  And not just home runs, but out-of-the-ballpark-bases-loaded-winning-the-world-series kind of plays.  Each product has to be a "must have" product, or otherwise, they can't make money on it, even at their inflated prices.

Apple products are OK, although many folks point out that their limited universe has its limitations.   There are certain things you can't do with Apple devices that you can do with more open architecture type devices.   And the marketplace likes open-architecture and has spoken loudly in this regard.

While the media TALKS about Apple a lot, the reality is, the smart phone industry is dominated by Android - with about 60% of the market.  Apple has only 30%, if that.   And the same is true for the computer business, only moreso.  Mac computers are horrifically expensive - thousands of dollars apiece.   PC-based computers cost hundreds, and not surprisingly have well over 90% of the computer market    For the price of one Mac computer, you can own five or more PCs.

And even those who were once Mac die-hards, are leaving the fold.   While the Mac had the initial advantage over the PC for graphics, music, and art applications, newer more powerful PCs have largely caught up in this regard.   In industry, the PC dominates.  In fact, the people who design components for Apple do so on PCs, not Macs.  That sort of says it all, doesn't it?

Apple stays in business by charging far more than its competitors for its products.   And so long as owning an Apple product is seen as stylish and trendy, they can continue to charge these sort of prices and get away with it.   But make no mistake about it, the company is a niche player in all of its markets.   And niche players can fall by the wayside in a real hurry.

The problem for Apple, long-term, is that they have no future "home run" products to generate the huge revenues needed to keep their huge infrastructure (now made huger by the new "flying saucer" campus, which will become a white elephant in short order).   The Apple iWatch is neat, sure.  But is it as groundbreaking as the iPhone was?   Are people going to line up around the block for one?   No.  That sort of buzz has faded, and perhaps folks are a little more jaded about electronic jewelry in this day and age.

And if you look at this history of Apple, you will see that this pattern has repeated itself.   Apple was wildly successful in the 1980s.  They bloated up, assuming that success would continue.  The PC then trounced the Mac in a big way, and Apple lost its way until they developed the iPod.   Apple was able to maintain a monopoly share of the iPod market by buying up the first two year's production of the new 1" hard drives.  By the time the competition could tool up, Apple had the accessories market tied to its proprietary interface.

And a funny thing, Microsoft failed miserably with its "music rental" model of the Zune.   But today, more young people stream music on their phones, than buy it.  And old farts like me are finding it easier to just load music onto a thumb drive (which will play on most car radios, computers, and other devices) than to dick around with the clunky iPod and iTunes interface.

And that is the nature of the beast.  Apple has to come up with a new revolutionary device, or fail.  They lost the personal computer and laptop market to the PC.  Maintaining the Mac, for such as small market share, at this point, has to be a loss-leader for them.   The iPod was a home run, but is largely irrelevant today.   And then there is the iPhone....

Smart phone penetration of the marketplace is pretty much complete at this point.   And the winner is.... not Apple.  The vast majority of smart phones out there are, and will continue to be, third party providers.

So, what is Apple's next big thing that they can charge 2-5 times market value for?   I'm not seeing it.  And with an aging demographic facing retirement, I'm not seeing masses of people flocking to lay down hundreds of dollars on the latest electronic toys.  Hardware is a commodity - the PC business taught us that.   Apple didn't get the memo, apparently.

UPDATE:  Apparently I am not the only one who thinks that Apple's high overhead isn't going to be maintained by Apple Pay or Apple watches or the latest O/S release.


You need to come up with something that is vastly better than the next best thing," he told CNN's Erin Burnett in an interview airing on OutFront at 7pm ET Tuesday.

Aye, there's the rub.   Out-of-the-ballpark products are not something that happen every day, or indeed something you can plan for.  And given the various media interests involved, I am not sure "Apple TV" would be a success.

The marketplace likes open-source products.   Would you watch television if all you could get was one channel?  Of course not.  That is sort of the premise of Apple TV.

Sadly, all the big firms (Apple, Microsoft, Google) are trying to "control" their customers and steer them into these insulated self-contained closed worlds.   Living in Googleworld is starting to feel a little stifling to me.   I expect to move my e-mail to a third-party provider in short order.   Google is way too creepy.   And Apple has the same problem.

Perhaps there won't be any "next big thing" products in the future - just "apps" which each have their 15 minutes of fame....

Tuesday, September 16, 2014

Obsessing About The Past

Obsessing about your upbringing or your family is a sure way to fritter away your life.

I had a recent interesting conversation with a reader via e-mail.   I am not sure what he wants from me.  I am not an advice columnist.  No freaking Dear Abby or Sooze "You're Approved!" Orman!   Advice is a dodgy business, as people tend to take it, cafeteria-style, and then blame you when it goes horribly wrong.

People also tend to seek advice they want to hear, and if you don't say what they want to hear, they hear what they want to hear, anyway.   Or, they tailor their fact situation so you end up giving the advice they wanted to hear in the first place.  They are not so much looking for advice as they are for validation of their pre-existing beliefs.

Want some advice?  Think for yourself.  The answers to all of life's little problems lie between your ears.   You just have to shut out the noise and distractions and listen to that inner voice.  Few people do this.  Most try to create as much noise as possible to drown out the deafening silence.

And one distraction for many people is their family and upbringing.   I don't know how many people I've met who feel somehow traumatized by their upbringing or their relationship with their parents or siblings.   They spend (waste) the rest of their lives trying to "figure out" their childhood, much as my late Sister did.   It is very sad.

It is a funny thing, but everyone has these issues, and again, it has to do with how our brains are constructed - as Neural Networks (more on that later).   If you join a cult or go to a Scientology "audit" or visit a psychiatrist or psychologist, the first thing all of them will ask you about is your relationship with your parents, particularly your Mother.   Cults will then try to sever those family ties, which results in a feeling of euphoria, as reported by many ex-cult members, as they are relieved of this burden.   Of course, in a cult, you are just trading one dysfunctional family for another one.

The Scientologists would call your obsession with your upbringing "engrams" and then charge you a lot of money to "remove" them.   If you can remove them all, you are deemed "clear".  This is an expensive process and few achieve it.

Oddly enough, psychologists and psychiatrists call these same issues, "complexes" and then charge you a lot of money to "remove" them.   If you can remove them all, you are deemed "cured".  This is an expensive process and few achieve it.

Now you understand why Scientology and Psychology are often butting heads with each other.  Neither likes the competition in the head-shrinking business.

Sadly, most folks never get beyond their childhood, and psychologists and marketers know this, and know how to use this fundamental aspect of everyone's makeup as a "hook" to rope them in.   Like I said, its the first thing a cult uses to snare their members.

My late Sister once went for a "reading" from some group (it may have been Scientology).   They hooked her up to two coffee-cans tied to a galvanometer (a primitive form of lie detector).  The first question they asked was, "tell me about your Mother".   The needle on the galvanometer went off the scale.  Oddly enough, when she went to visit a therapist, they asked the same question.  Funny how that works.

These examples illustrate how easy it is to manipulate people, simply by going after what is for most, a basic obsession or difficulty.   Everyone, it seems, spends an inordinate amount of time trying to relive the past and wondering whether, "if I had done things differently" how their lives would have turned out.  Norman Mailer, in The Naked and the Dead mentions this effect in passing - and dismisses it as being of no profit.    Yet, it is hard to get the brain to stop obsessing about the past.

And the reason for this is simple:  Your brain is a programmed Neural Network - the most complex on the planet.  Neural Networks are programmed by "training" - inputs are provided and outputs measured, and then the nodes of the network are "corrected" to provide the proper output.  It is a painful process, and the earliest training is the most important and the most significant - it provides the initial weighting factors for the nodes.   It can take years and years of un-training to reprogram a neural network that was improperly trained early on.

So your childhood and upbringing are the focus of your brain, simply because these experiences set the "initial conditions" of the neural network.   You leave home at age 18 and maybe 20-30 years later, you still wonder whether "if only I had asked Suzie to the Prom...."   It is a common thought.   And even though your post-childhood experiences now trump your childhood experiences, in terms of years and intensity, these experiences do not program the brain as strongly as those initial experiences.   It takes a long, long time to un-program a human brain.

Sadly, most folks end up reinforcing their childhood programming over and over again, much as my late Sister did, by obsessing about their childhood and upbringing and trying to "figure out" their upbringing.  This has the opposite of the intended effect.  Instead of moving on to a new life and new experiences, the victim ends up burning those early experiences into their brains, over and over again, essentially reinforcing those horrific lessons.

And many folks do this, spending a lot of time in dysfunctional family chat groups or support groups or whatnot.   And initially, this may seem like a way to find mutual support and "understand your childhood" but the net effect is to make yourself into a passive victim of circumstance and not an independent actor on the stage of your own life.

This was driven home to me at an ACOA (Adult Children of Alcoholics) meeting I attended back in 1985.   It was constructive to me, in that the meeting coordinator did give me some good advice.  Rather than try to control my Mother's alcohol consumption and behavior (as my Sister was trying to do with her planned "interventions") the best thing I could do was take control of my own life. 

One of the other participants at the meeting never "got" this.   A young woman in her late 20's, she had a good-paying job at the local hospital.   She lived at home with her parents, who were both drunks, and she was miserable and lonely.   "Why don't you move out and get an apartment of your own?" several of us suggested.    She looked at us as though we were speaking Chinese.   Move out?  Then she would no longer be a victim!

And I realized right there that it takes two to tango in these victim situations.   You have to choose to be a victim, in many cases, and many people think it is their only choice.

Obsessing about your childhood, upbringing, parents, siblings, school, and other things from 20-30 years ago is just a dead-end pursuit.   If you have a great relationship with your family, that is wonderful.  However few do (and most of them are lying).   Rather than obsess about that sort of nonsense, just move on with your life and figure out who YOU are - not as someone's child or someone's sibling, but what YOUR life encompasses.

Yes, it can be comforting sometimes to view your life as a series of unavoidable circumstances and to posit yourself as a passive victim of it all.   But comfort can also be smothering, and while wallowing in that warm insular comfort, you could be slowly suffocating.

It is OK to put your childhood behind you.  I give you permission.  And if your parents and siblings are abusive or even just annoying, there is no need to torture yourself by being around them, just "because they are family".   And for God's sake, you are not obligated to send them money - particularly when you have a spouse and your own family to support.

And you are not "destined" to re-live the lives of your parents, your ancestors, or whatever.   You do have choices in life, if you are brave enough to take them.

Is this easy to do?  Hell, no.   Like I said, your brain is a Neural Network, and early programming is the most powerful and hardest to ignore.  Maybe that is why many orphans are so successful in this world.  Their earliest programming isn't a lot of family baggage, but basic survival skills.

But it is worthwhile to program your own brain.  And sometimes this means cutting off old programs from the past.

Monday, September 15, 2014

Learning to Take Care of Yourself (Stupidty Tax)

Our society no longer trains people to take care of themselves.  Is this by accident or design?

In another posting, I lamented the passing of Home Economics classes, which are being cut (along with Art, Music, Language, Shop, Driver Ed, and anything else not on the "no child left behind" standardized tests).

As a result, more and more people have no clue about how to even feed themselves.   What's more, they don't know how to balance a checkbook, wash their own car (much less wax it or change the oil, or God forbid, change a flat tire), paint a house, or any one of the number of small duties that are required to live on Planet Earth these days in a technological society.

I know that by the time I graduated from High School, I could not balance a checkbook.  I did not know the difference between accounts receivable and accounts payable.  I didn't know the difference between an Invoice and a Statement.   And some of these terms would take another 20 years to learn.   Sad, but true.

And while I could cook a few items to feed myself, like most American boys, I could do little else.

But I did have shop class, and learned how to use basic machine tools and hand tools.  I could do small repairs around the house, and knew how to tune up a car (which back then, required tune-ups).  And I could change a flat tire, for chrissakes.

But today?  I think fewer and fewer people are equipped to deal with living in our modern society, other than as "consumers" who choose what products and services to buy.  Few people, it seems, cook their own food.  Few can fix their own cars (as evidenced by the number of folks I see on the side of the road, staring at flat tires in bewilderment).   And very few have any financial acumen.

Is this all by accident or design?

I was at an RV park the other day and two gentlemen in the adjacent camper told us (with a straight face) that it is "easier and cheaper" to eat at restaurants than to buy food and prepare it.   And I have heard this from many - that "for just two people" it isn't worth the hassle and it is cheaper to just buy fast food.   The two gentlemen were, of course, in bad health.   College graduates, and they basically could not cook or even feed themselves.

By accident or design?   Cutting home economics classes certainly helps the fast-food industry and the restaurant industry - as well as the pre-made frozen dinner people.   Getting people to pay 2-10 times as much for food than they should is a neat trick, when you think about it.   Sort of like those "cartridge" coffee makers ($179 at Wal-Mart!).   Pay 5 times as much for the machine as you would for a Mr. Coffee, and then pay about 4-5X the cost per cup, for the drink.   Same deal.

With cars, it is also convenient when people are ignorant.  When I was a kid, waxing your car was a big deal.   Spending a Saturaday afternoon with the hose and a bucket of suds, followed by a workout with the car wax and some old towels - buffing your "ride" shiny so that it looked like new - that was fun.

Today, most folks I know never wax their cars and rarely wash them.  Maybe once a year they have the car "detailed" and then let it go back to shit in short order.   I am told it is "too much work" and "too much hassle" and even told by some that they "don't know how to wax a car" (!!!).   I think the real reason is that we are so fat and worn out by the restaurant food that the intense workout in waxing a car (and it is a workout) is just too much for most of us.

So we take the car to the car wash.  And we take it to the lube place when it needs an oil change.  And don't bother trying to learn how to fix a car - "it's too complicated with all those computers!" - right?   Just pay extra for an extended warranty and "roadside assistance" so if the car breaks, you can play lawyer with the warranty company, and if you get a flat, just call AAA on the phone and wait an hour for them to change the tire.

Such a long way, we have come, from the nation of self-reliant pioneers.

And who does this benefit?  The car companies who sell leases, so you trade every three years, to avoid the "hassle" of breakdowns?  Why wax your car when you don't even own it?

By accident or by design?

In the financial sector the same is true.  I was a financial Bambi in the woods as a young man, bouncing checks, signing up for odious credit card offers, and generally running my finances into the ground - for decades, even.   It took a lot of hard and costly lessons to finally develop some financial discipline.   I learned things that I should have learned in High School.  Simple things that I have expounded upon in this blog.   Things that are shouted down by the vast majority.   After all, a "miles" credit card is a good deal, even if it has a 25% interest rate, right?   Wrong.

And it ain't hard to figure out who benefited from my financial ignorance - the banking industry, the credit card industry, the loan companies - everyone but me.  

By accident or by design?

There is a stiff penalty exacted upon ignorance in this country - a stupidity tax, if you will.  And most people pay it every day, when they get a payday loan, rent-to-own furniture, pull up at the drive-thru at a fast food joint, buy a lottery ticket, or lease a new car.   Most folks don't even realize they are paying this tax, they are that dense.   In fact, they will tell you what a great deal the stupidity tax is, as it allows you to be as stupid as you want to be.

Myself, I have been trying to go tax-free in the stupidity department, as much as possible.   Yea, I still fall down sometimes, like the other day when I stupidly signed up for XM radio and acted astonished when they bent me over.   I should have known better, but sometimes you need a refresher course in stupid to re-learn these things.

But again, you have to ask yourself, is this by accident or by design?   Because since I was a kid, Federal Income taxes have been slashed from the 50% rates we had back then.   But the stupidity tax has been doubled.  

We no longer protect people from their own stupidity.   Payday loans can charge 300% interest because we abolished usury laws in the 1970s.   People can gamble themselves broke because we decided to legalize gambling nearly everywhere (including the lotto machine at the local 7-11).   People can eat themselves sick at fast-food restaurants, which morphed from occasional treats to America's Kitchen.   And folks can get "upside down" in a car loan or a lease deal in a real hurry today, with loans as long as 7 years, sometimes more.

And let's not talk about student loans and the myriad other bear traps out there that young people can step into these days.   Today, we eat our young.  Mom and Dad are off in retirement village, living off the dividends of their bank stocks.   They want high rates of return to finance their retirement!  And they get them, because their sons and daughters signed up for 25% interest rate credit cards and onerous student loans.   We literally eat our young, often our very own.

There is another way, of course.  There always was and always will be.   When I was young, I could have been smarter - balanced my checkbook, established a savings plan, said "no" to E-Z money financing and other bad deals.

And I did eventually learn these things.  I took a night course in car repair, while still in high school.  I took a course at the local community college in accounting and Quickbooks, and learned how to monitor spending and manage my money.   And I learned how to cook (and better yet, married one) so I bought food (real food) and prepared it at home.

Today, more than ever, it is essential to know how to take care of yourself.   And oddly enough, today, more and more people posit themselves as some sort of "survivalist" who will withstand the end times or nuclear war.   People with a basement of canned food and ammo who can't balance their checkbook or figure out what the Check Engine light means.  I wonder if they really will survive.

And it is funny, in this dog-eat-dog world we have created over the last 40 years, more and more people defend poor financial practices.   "Yo, dude!  Ya gotta keep your finances flowin' by leasing!" one youngster explained to me.  I guess this is his way of dealing with Student Loan debt.   Just make the minimum payments on everything, and then lease your way to apparent wealth.   I wonder how that will play out in 20-30 years.

Be kind to yourself.  And by that, I don't mean "treating" yourself to consumer purchases that are financed by debt or paid for from savings you will need down the road.   Be kind to yourself by learning to take care of yourself.  It's isn't selfish, it is a matter of survival!