Tuesday, December 23, 2014

Smart Idiots

Who falls for these cons?  Many smart people do - and we all do, on occasion.

The fake cruise line people are at it again, robo-calling and saying "you've won a free cruise!"   And since robo-calling is illegal, that should tell you right up front that the people you are dealing with are criminals, have no fear of breaking the law, and don't mind breaking the law, if it means making money off of you.

So, no, there is no "free cruise!"   They tell you that you have to pay "port fees and taxes" and attend a time-share seminar.  And the cruise - if there even is one, is on an old car ferry that puts out into the water where you play bingo.   Some fun!

But it got me to thinking - who is dumb enough anymore to fall for this sort of thing?   And the answer I came up with is, well, any of us.

First, there are the truly dumb.  You know the type - dumb as a doornail.   Just not smart.   Nice folks, perhaps, but the elevator doesn't go all the way to the top.   Sad, too, that we don't protect innocent, but not very smart, people from cutthroats and thieves anymore.

But beyond the really stupid, are people who should know better, but refuse to.  These are the "weak thinkers" of the world, who think that everyone else is making out like a bandit and that hard work and sacrifice is for chumps.   They believe the only way to get ahead is to cut corners.   So you tell them they don't have to pay taxes, and they will buy your books and seminars.   You tell them nothing in their life is their fault, but immigrants, and they vote Republican.   You tell them they've won a free cruise - and they tend to believe it.

And I am not talking someone living in a trailer, watching television all day long and swilling lite beer.   Smart, educated people tend  to fall for this sort of thing.  I had an employee fall for a "You don't have to pay taxes" scam - and he had an Engineering and Law degree.   Chelsea Clinton's father-in-law fell for a Nigerian scam, stole $10M from his clients, and ended up in jail.   He was a smart, educated man as well.

You can go to all the schools in the world and get all the degrees you want and still be a blithering idiot.

And I know this from experience.

How can we be so smart and so dumb at the same time?  

Well, I can tell you from my own experience that it was a combination of weak thinking, and poor normative cues reinforced five hours a day by the television.

Before I started this blog, I used to engage in a lot of weak thinking.   I still do, on occasion, but I try to avoid it - when I can detect it.   Weak thinking is assuming that everything will - and should - go your way all the time.   Some folks call it the "heads I win, tails you lose" mentality.
And you see this everyday in your life.   Weak thinkers are the kind of people who harass customer service people, hoping to get a "freebie" out of something, because a service was bad or a product no good.   Strong thinking is to take your business elsewhere, rather than to try to "fix" a bad deal.

For example, a local restaurant used to be really good.   But lately, the quality of the food - and the service - has really slipped.   A shame, too, because I've met the owners and they are nice people.   The food arrives cold, undercooked, and takes nearly an hour.   After a few times, well, I stopped going.   And judging by the parking lot, a lot of others have stopped going as well.

But I have a friend who goes all the time, and when the service and food are bad, she harangues the staff for a "comp'ed" meal or a discount or whatever.   This uses up a lot of emotional energy and doesn't make the service or food any better.   A better approach is to find a new restaurant and let that one go out of business (or realize their sales are in the toilet and change things).  But she keeps trying to make a bad deal into a good one, on the premise that "the customer is always right!" - which is the battle-cry of weak thinkers everywhere.

Yea, I used to do that too.  Now, I just walk away.

Couponing and other forms of faux financial acumen are another example of weak-thinking.   And this stuff is heavily promoted by the television - crammed down your throat while they beat you over the head with.   According to the television, "smart consumers" become successful by being "smart shoppers" and scoring all sorts of esoteric "good deals" which results in "savings".

But the reality is, these "deals" are just incentives to spend.  Take, for example, this missive sent out by a "miles" credit card:

Earn 15X miles on all your purchases at  PetSmart.

From December 15, 2014 through January 14, 2015, earn 15 miles per dollar spent on PetSmart purchases when you use your US Airways Dividend Miles® MasterCard®. There's no mileage cap and you can shop online or in-store. Simply use your card for the transaction, no additional action is required. It's a great time to stock up on items for your pet, such as:

Food Toys Crates and cages
Beds Holiday gifts Grooming supplies

Here's a clue:  You can't spend your way to wealth.   What "offers" like this do, is encourage you to spend more money and put less in savings.   Going to PetSmart and buying things is not going to make you rich - just a little poorer.   And I don't care if they give me 1000x miles, airline miles are the most worthless reward known to mankind.

But a lot of weak thinkers think they are "getting ahead" by shopping aggressively.  In most cases, they are not.   Maybe a few clever shoppers who really are on a fixed income and really poor can cut their spending by monitoring these sorts of deals and making strategic buys.  If you are retired, unemployed, or disabled, I guess you'd have a lot of time on your hands to do this.

But the vast majority of people end up spending more as a result, and often the poor are the worst at this.

And yes, when I was younger, I used to actually believe in this shit.  I believed that a car would magically cost less one day over the next, because it was "on sale".   I thought that manufacturers liked me which is why they offered discounts as "customer appreciation".   I was pretty freaking stupid.  

These are just promotions and the point of a promotion is to get you to spend, period.   Savings don't occur at the cash register, savings are what you put in your piggy bank.

So, in a way, we are all smart idiots - or can be - regardless of our educational level or our native intelligence.   The good news is, you don't have to be a really clever monkey to get ahead in this world (and a lot of millionaires out there are not very bright people - just rational).

The easiest way to do this is to turn off the television.   When I did this - and stopped cramming bad ideas into my brain, five hours per day (the national average) I tended to stop believing this nonsense.   And that is why not watching television is not optional if you want to get ahead in the world.   You are not superman.  If you were, television is kryptonite.   Once you start watching reality television and thinking it is interesting, well, the advertisements will go right past your cerebral cortex and lodge in the mid-brain.

The second thing is to stop believing in something-for-nothing.   No one "wins" at a Casino - ever.   You gamble long enough, you gamble away all your money.   A few people win here and there - but in the long-term, they go broke.  Stop being a true believer in things that basic probability can illustrate as false.

Stop believing in contests, lotteries, "free" things, and other come-ons.   Stop believing in conspiracy theories and other time-wasters.

Once you do this, you can really rocket ahead of the pack.

Why?  Because you then realize that while there are a lot of factors affecting your life, your reaction to them is far more relevant than these other actors.

For example - the real estate crises.   Whose fault was that?  The banks?  George Bush?  Obama?  Clinton?  Wall Street?   Those are convenient "other actors" to blame things on.  But the hard reality is, if you lost money in real estate over the last decade, it was because you decided to overpay for a property.

You, and no one else.  No one "forced" you to buy that house.   And you could have "done the math" and realized it was overpriced.   And overpriced they were.   Houses were so unaffordable in the late 2000's that people were resorting to exotic and toxic loans to buy them.  I took this as a sign to get out.  Why?  I saw the same thing happen in 1989.   And you did too.  

Yes, that is harsh, to look inwardly and blame yourself for things that go wrong in your life.   But it also is constructive and liberating. Once you free yourself from the game of externalizing your problems, you can then take action in your own life and realize the decisions you make are the most important thing affecting your life.

And when you decide to stop believing in Santa Claus and other something-for-nothing nonsense, then you can really get ahead in life.   You can cut wasteful spending - like cable TV and smart phones - and put money into savings.   And instead of looking for "sure thing" investments that will "go ballistic" you realize that a better bet is to diversify your portfolio and invest in rational things and not junk hyped by the media.

In fact, once you stop watching television, you start to question the sanity of it all.   Who buys this shit?  Who believes these lies?  And you start to realize a lot of people do - most in fact.   Most people are "weak thinkers".

So, welcome to the secret cabal - the insiders club.   There is no world wide conspiracy - just people who think rationally, and people who are weak thinkers.  Act rationally in an irrational world and you will get rich.
My only regret is not figuring this out a long time ago.