Your retirement plan in the animal kingdom often involves being eaten alive.
We have been camping out in the wilderness, which many folks think is a relaxing and peaceful environment. Nothing could be further from the truth, of course. The wilderness is full of murder, mayhem, violence, and death.
Every creature in the wild depends on some other living creature in order to survive. Your life is marked by birth and death, and death comes when you become too old to evade predators and end up being someone else's lunch.
A deer or gazelle can keep running away from predators for only so long before they become old and tired and lame and slow. At that point, they are singled out as prey by the wolves or hyenas or whatever, and then are ruthlessly hunted down and mauled to death, often having their guts eaten while still breathing. Your former friends and even family members run away, glad that it is not them who are on the menu today.
Humans, it seems, are alone in the animal kingdom in having a sense of decorum about death. We started burying our dead to prevent animals and predators from eating our loved ones. We supported our elders in their later years when they were too old to hunt or farm. Few other animals, if any, do this.
It is funny to some extent how we decry violence in the human world and decry our tendency towards war, terrorism, murder and mayhem. Yet if we look to the animal kingdom, we see that this is the norm, not the exception. Our instinct towards niceness and kindness is not some natural phenomenon, other that it is perhaps a survival instinct that has allowed our species to advance and survive. Our other baser instincts, however, still remain intact.
In Australia recently, a photo was circulated of a pair of kangaroos. The mother kangaroo had been hit by a "lorry" and was lying dead on the side of the road. The father kangaroo was holding vigil over her body, or at least that was what some people thought at first. We anthropomorphize human behavior to animals, assuming that they feel and think as we do.
But a naturalist pointed out that kangaroos do not mate for life, but like deer fight for the right to mate with as many females as possible. They are also opportunistic mating partners, who try to mate with whatever female is available. The males do not take part in raising the young, but rather mate and flee. The "father" kangaroo in the photo wasn't trying to console his fallen mate, but rather was trying to mate with her dead corpse.
We forget that animals are animals. We try to keep chimpanzees as pets and then forget they will literally eat your face off if they get angry and aggressive. We try to keep tigers as pets and then they bite your neck in half. Animals are animals and they behave differently than we do, even if we are descended from the same DNA strands.
So what is the point of this? I don't know, other than it struck me that we are very lucky or smart not to be eaten to death, at least in some instances. In some third world countries today, if you get old and have no children to support you, you may literally starve to death. This was particularly true for widows in rural India, who were tossed out onto the street once their husband died.
The modern concept of retirement is a relatively recent one and a Western one. Retirement as we know it didn't exist, largely, until after World War II when people actually lived long enough to retire and also had the Social Security, Medicare, and the pension plans necessary to fund such a luxury. In the history of mankind, or indeed, the history of life on Earth, the concept of retirement and leisure is one that has existed for only a blip in time, the last 50 years at most.
For the rest of the world, the rest of time, and the rest of species, it has been literally dog-eat-dog.
And this gets to the point that our society and our intelligence have achieved something that hasn't existed until recent times - the concept of leisure, peace, contemplation, and relaxation. I guess you could call this "civilization" and it is indeed the highest achievement of mankind. Maybe a bunch of old people playing golf in The Villages doesn't seem as great an accomplishment as the moon landing, but if you think about it, it is a startling development compared to our historical past.
And the question going forward is, do we want to retain this standard of living or revert back to a more primitive past? It would seem there are forces in the world who thirst for blood and violence and wish to return to an earlier era. It is still possible we could be carried off by hawks.
Deciding when to retire isn't easy - if you even get to make the decision yourself. But then again, most decisions in life are hard, and making hard decisions is often the right choice.
First of all, thanks for all the e-mails and messages asking where I have been. I don't have time to respond to every e-mail I receive, so my apologies for not responding.
In response to my retirement posting, I received some interesting messages. One fellow told me that retiring early was a mistake as I would have "nothing to look forward to except death" which was hard to parse. I guess if you keep working you never die and that is a good reason to keep working?
Others were generally supportive, but wondered what on earth I would do to keep busy? After all, without work, I would be "bored to death". Well, so far, no boredom or death just yet.
I have spend the last two weeks camping on the Blue Ridge Parkway and traveling in the Central New York Finger Lakes region. We are headed to the Adirondacks, then to Montreal, Vermont, Maine, and then back down through Cape Cod, Virginia, and the Blue Ridge again. It may take a few months. Oh, and it is as boring as all get-out. Not really.
It is interesting traveling in that people ask you where you are from and where you are going. When you start to rattle of a list of destinations, they get upset. After all, the point of "vacation" is to spend a week traveling from point A to point B and then a second week traveling back. You have to have a "destination" and a time limit. It is funny to watch people's brains melt down when you try to explain to them that working all day long isn't necessarily a requirement in life.
But the guy I am talking to has a new 35' Fifth wheel, bass boat, jet ski, and monster truck - all parked in the campground - and is still making payments on all of it. He has to get back to work to pay for it all, so he can use it for two weeks of the year. He laughs at my tiny camper which is "paid-for" and doesn't understand that there is another way to live. He might, eventually, if he can retire. But sadly, the line of payments he has will stretch well into his 60's (and let's not talk about the mortgage!).
And I do marvel at these folks who have so much "stuff" and yet appear so young. I mean, how can a 30-year-old afford a $65,000 pickup truck? And the answer is, only a 30-year-old can. Old people, having to live on a fixed income, are often forced to eschew such nonsense or risk going broke or running out of money. It is like the States - they have to balance their budgets, while the Federal Government can engage in deficit spending, at least for a while.
Anyway, once again I digress. One reason we are in Central New York is to look at boats. Yes, boats again. We were thinking that after taking the Casita to Alaska in 2017 (aboard a ferry from Seattle to Anchorage along the inside passage) it will be 20 years old and pretty wrung out. We might sell it and buy a used cabin cruiser and cruise the Erie canal, the finger lakes (Seneca and Cayuga anyway), the thousand islands (St. Lawrence river), lake Champlain, and the Hudson. There is a lot to explore here by water, and it is a lot cheaper than owning a vacation home!
It is an idea, anyway, and we are still in the infant research stages, looking at boats, places to go, places to stay and the costs involved. We might nix the whole idea and do something else. The nice thing is, a fresh water boat up here can be in very good shape and for not a lot of money. In fact, we likely would spend more on fuel than on the boat itself, over a period of years. We might decide it isn't worth it, though.
But speaking of decisions, the point of this blog entry was about the decision to retire. One reason I decided to retire is that I no longer enjoy my work as much (another posting about that later) as it seems the Patent system has sort of gone off the rails. People who actually invent things make no money from their inventions, while others with "paper Patents" and clever lawyers can rake in millions. Attempts to fix this problem over the years have only made it worse - the solo inventor is really screwed today, while the trolls march on. The only real function served by the system is to arbitrate disputes between giant multinationals, and even then, the result is often a tie. But more about that later.
Also, I find as I get older, it seems my anxiety levels are higher. I am not sure if this is just part of getting older and more conservative (risk-taking is a young man's game) or something else. Either way, the anxiety of work is outweighing the enjoyment of it.
I look back at times in my life when I made momentous decisions and wonder who that person was. I had a lot of balls back then, it seems in retrospect, to go to college for 14 years and get other people to pay for it. To go to law school and get a job with a firm and prosper - only to chuck it all in a few short years and actually start my own law practice. What the heck was I thinking? That's far too much a risk to take!
And then to get into Real Estate and buy properties and fix them up and rent them - the risk of being a landlord is far to scary to me today (although technically, I still am one, for one remaining property). Borrowing hundreds of thousands of dollars - well over a million in fact - to speculate on the market. It could have gone horribly wrong, and in fact did for many Americans. And then the decision to sell out when the market was at its peak - and move to the country. What was I thinking?
I feel that today, I can't make such decisions as they make me too anxious. But then I think again - I just made what is arguably the ballsiest decision of my life - to retire early. So maybe I haven't lost my touch just yet. And over the years, I have found that the decisions based on "gut instinct" that seem irrational to others are often the best decisions I have made. Time will tell if early retirement is one of them. In the meantime, I am enjoying the shit out of it.
Does it make sense to keep old credit accounts open to improve your credit score? Not really.
There is a lot of mythology out there about credit reports and credit scores. People will tell you they can improve your credit report or credit score as if it was some sort of cosmetic thing not based on your actual behavior.
Usually these sorts of folks are after your money. And it is sort of sad how poor people will hand them over tons of money and often absolutely destroy their credit ratings by going to an agency that promises to "fix their credit". Some of these places actually tell you to stop paying your bills and instead give the money to them and that they will "negotiate" with the lenders to lower your debts and remove negative reports from your credit. Of course, lenders are not idiots and they don't go along with these schemes, so the borrower ends up bankrupt and further in debt. Preying on the poor, what's not to like?
The local car dealer promises "credit amnesty" for low-score borrowers. But of course "amnesty" only means paying horrific interest rates on a car loan - payments so high that default and repossession are almost guaranteed. Again, the borrower is left broke and destitute and in worse shape than before he was granted "amnesty."
When someone tells you something too-good-to-be-true, it usually is.
Financial sites and discussion groups are full of "advice" on how to "game your credit score" to bring it up a few points. Some of these techniques work, most are merely urban legends. Some work, but only bring your score up a few points - which might be helpful if you are at 768 and want to make the vaunted 770 which qualifies you for all the better credit offers. Others might work, but since you can't change the data on your report that easily, they don't really provide any meaningful help, unless you had a time machine and could go back and change your behavior in the past.
Once piece of advice often offered online is that you should keep your oldest accounts open, as they will improve your credit score. Thus, if you got a Sears charge-plate back in 1979, you should keep that account open, as it will improve your score. Is this true? Does it make any sense? Yes and no.
It is true that average length of your open credit accounts is one factor in determining your credit score. But it is not a dominant factor. If you have a 20-year average of open accounts, that's a fine thing, but if you are delinquent on your payments, it will wipe out that advantage in short order. One late payment on a mortgage is all it takes to tank your credit score. If you declared bankruptcy, it really doesn't matter than you have an open account from 1979.
Average age of credit history is only one factor - and arguably the least important - in determining your credit score. (Click to enlarge)
The other problem with age of credit history is that it is based on the average of your credit accounts. So, for example, you move to a new town and buy a house. Your mortgage is only months old. You buy a car. The car loan is only months old. You decide to get a new credit card with your local credit union. That credit card is only months old. As a result, you have a lot of "new credit" and maybe only one or two older credit accounts. Your "average age" of open accounts is now lowered.
You can see why this factor is used. If someone stays in the same house and pays on the same mortgage for 20 years, their average age of credit will be very high. This tends to show a stable person who stays in the same place for a long time and has long-term credit relations. It is one indicia of stability in a borrower.
But credit scores are not an exact science. And that is why this factor is just one of many factors, and really not a major one. And as the images above illustrate, your credit score is really not affected all that much by average length of open accounts. It is possible to have a score well over 800 even if your "average age" of credit is low.
What is really astounding of course, is that credit score can be a really, really poor indication of someone's credit-worthiness. Since I am largely debt-free at this stage in my life, you would think I would have a perfect credit score. However, since I am not borrowing money anymore, the system doesn't know what to think of me. I have no mortgage - so I must be renting, right? And since I don't have lots of open credit accounts from years gone by, I must be a poor risk, right?
As the image above illustrates, the holy trinity of credit score is (in no particular order) credit card utilization, payment history, and derogatory remarks. If your credit card utilization (percentage of balance to balance limit) is high, odds are you are living paycheck-to-paycheck and not paying off the balance every month. If your payment history is spotty (late payments) then odds are you are on the brink of a full-blown credit card crises. If you have derogatory remarks on the report (bad debt, late payments, and so on) well, you've gone over the edge.
These indicia are based more on your financial solvency than anything else, and there isn't really much you can do to change them, with some exceptions.
With regard to credit cards, I try to pay off any credit card debt before the payment is actually due and thus keep my balance low in relation to the credit limit (and I abhor having high-limit cards as they can be a lethal trap). So you can "game your score" a bit by making multiple payments every month and thus keep your balance/limit ratio low, raising this factor.
Payment history and derogatory comments is harder to parse. If you've really been delinquent on your payments, there isn't much you can do to fix this. But sometimes spurious data appears on your report and it can be fixed with just a phone call or a letter. Two examples come to mind.
When we obtained our first mortgage together, it turned out that Mark had a "sent to collections" comment on his credit report. It seems when he left college, his drug-addled roommates had promised to pay the last phone bill (this in the ear of land-lines and before credit scores existed) and have the phone disconnected. They did neither.
So the phone company kept sending bills until they pulled the plug on the phone. Since the bill went to a now-empty apartment, Mark never got it. And the total amount was about $230 as I recall. The mortgage broker indicated this was not helping our credit report. I called the phone company, explained the situation, and then wrote them a letter with a check for the full amount and a month later the derogatory data was removed from the report.
In a second instance, I had a late mortgage payment reported on my credit. We had a mortgage through a local bank (Riggs) which in turn sold it to Key Bank. I had just signed up for auto-pay on the mortgage, thinking this would prevent any late payments. But just as I signed up they sold the note to Key Bank and then the next month's payment was marked "late" as it took more than a month for the auto-payment to be forwarded. Again, a phone call solved the problem. The operator at the company (whose name was Bell, oddly enough) checked the records and apologized and removed the negative data from my report. It does take a few weeks to a month for this correction to appear, though.
I am told that since those days, most mortgage companies will not report late payments when a mortgage is sold because of the possibility of payments being mailed to the wrong address or electronic payments being forwarded late to the new lender. This is not an excuse to make a late payment intentionally, though. As I found out the hard way, a late mortgage payment will "tank" your credit score in short order. Of the "holy trinity" a late mortgage payment is the ultimate sin.
Now, on the other hand, if you have been late on your credit card payments for the last two years, a phone call or a letter to the company isn't going to fix things. They have no reason to correct data that is correct already. So the idea that you can "fix" a shitty credit report when the shittiness is your own damn fault, is flawed. The idea that you can pay someone to do this is also flawed.
Will keeping your oldest line of credit open increase your score? Again, maybe, a few points. But again, it is a "time machine" piece of advice. If you've already closed those accounts, what's the point of the advice?
Also, I think you should base your financial behavior on sound financial practices, rather than gaming a credit score. I closed my Sears account (which I opened in 1981, as I recall) simply because I was no longer using it. The idea of a dormant account floating around with bills being send to previous addresses frankly scared me to death. And it is interesting how they handled credit accounts back in the day. I was buying a DieHard battery there once and the clerk asked me if I had an account with them. I said, "Oh, yea, years ago, but I closed it." He asked for my driver's license, typed in a few commands and said, "Oh, your account is still active, and I can put this battery purchase on it right now!" Even without the "charge plate" I could still charge on the account. This struck me as kind of dangerous, so I closed the account. Besides, I don't need to finance a battery anymore.
Making your finances more complicated than they need to be is never a good idea in my opinion. Doing so to "game" your credit score is, in my opinion, totally idiotic. I have a good credit score simply because I don't need credit anymore. That is how it works - to get a loan you first have to prove you don't need the money. It is an old joke, but a truism nevertheless.
If you pay your bills on time, that has a far more serious impact on your credit score than playing games with account age. If you keep your debts as low as possible, that has far more impact on your credit score as well.
Of course, today, credit scores are a big deal. They can determine whether you get a job, a house, a car, or even a spouse. Not long ago, credit scores didn't even exist. But today, at least, we can readily view these online, as a free service from our Credit Card provider, through CreditKarma (which will make you all sorts of shitty credit offers) or the like. You can view your actual report, of course, through annualcreditreport.com which is the only really free legitimate government-sanctioned credit reporting site.
In the not-too-distant past, credit reports and credit scores were a mystery to most consumers. You only found out about negative credit information only after you applied for a loan, and even then, the lenders were reluctant to let you see your own credit report. They finally passed a law making it mandatory that you had a right to see your credit report but only if you were refused credit and you made a request in writing. They finally passed a law saying you had a right to see your credit report, but only once a year by going to the annualcreditreport.com site. Credit scores, however, were deemed "proprietary information" that you had to pay for.
In the last few years, the credit industry had just let its pants down and let everyone see their credit score through a number of means. Paying money (such as through Soozie's "FICA Score Kit!") to see your score is kind of dumb these days. So it is a good thing that consumers at least can see how they are being evaluated and why. And the reason the industry didn't want us to see these scores and data was that they were concerned that people would try to "game" their scores, which you sort of can do, at least a few points one way or another.
But you can't "game" a 580 to an 800. It just isn't possible.
How did stainless steel appliances morph from commercial kitchens to status items?
Status is an odd thing and I talk about it a lot here, as it has a way of draining your bank account for no real apparent reason. We spend two or three or ten times as much money on things in order to impress people we don't even know.
Now, granted, it is nice to have a house with "nice things" in it. A house that is calming and peaceful and beautiful. But oddly enough, status items are often just the opposite - garish and ugly and loud and stress-inducing. And they are particularly stress-inducing when you stress yourself financially to have them.
But what is a "status item" and how do they become one? It is odd, but we as humans often ape (poorly) the actions of others to obtain perceived status. And most of the junk you may crave as status items has its roots in ridiculousness.
For example, take the stainless-steel $3000 refrigerator. You can spend thousands of dollars today on a refrigerator, and that's not even getting one with a television in it, or WiFi, or a little camera that shows whats inside it (I kid you not!). They don't refrigerate food better, of course, and often they are far less reliable and don't last as long. A basic two-door refrigerator can last decades. These high-end fancy appliances with digital readouts go to the junkyard when their electronic control panels fail.
But all that aside, why did stainless steel become a "thing" in the first place? Historically, commercial kitchens used stainless as it was easy to clean, lasted a long time, and was considered sanitary. It didn't rust or corrode and held up to the severe use of a commercial kitchen.
Back in the 1960's or 1970's even rich folks had white appliances. But a few of the very wealthy - who had servants - had in-house commercial kitchens in their mansions, as they would occasionally host 200-person parties that needed to be catered. I recall when growing up, going to a rich friend's house and they had a kitchen larger than my living room, complete with a HOBART commercial dishwasher, the giant stainless-steel Wolf range, and built-in SubZero refrigerators. It was a restaurant kitchen, basically. Practical for an 12-bedroom mansion with servant's quarters, perhaps. Not so useful for the three-bedroom tract home.
In the 1980's, people started reading these home magazines that showcased expensive homes. Prior to that, magazines like "Better Homes and Gardens" were less about mansions and estates than about middle-America and its tastes. Today, it is all about designer homes, of course. And as the plebes read magazines like "Veranda" and saw the insides of the estates of the "Rich and Famous" on television, they would see these commercial kitchens and think, "Gee, I would like to have stainless steel appliances just like the rich people have!" And Norm and Dave on This Old House reinforced this notion by showing how you could afford an ordinary refrigerator made in stainless steel.
And pretty soon, it became a "thing".
Even stuff as lowly and practical as a bicycle is subject to this sort of aping of status. When I was a kid, you had a bicycle and it had one speed, or maybe a three-speed hub. It had fenders to keep the rain off you, and a basket to carry your crap. They were heavy, dumb, cheap, and pretty durable.
But the racers in Europe had lightweight bikes with no fenders, 10 speeds, and "rams head" handlebars. And it wasn't long before they became popular in America. But the versions that the plebes bought at Sears or Western Auto were hardly racing bikes, with cheap riveted derailleurs and welded steel frames. They were just bikes styled to look like racing bikes and as practical means of transportation they left a lot to be desired. Cheap steel rims bent easily and there was no place to store your gear. Hit a puddle and you were sprayed with water. But we all had to have them, because, well, status. You wouldn't want to be caught dead with some old English 3-speed bike, no matter how practical it was.
Today, the same is true with Mountain bikes. At least their wide tires and soft suspensions provide some advantages for the average rider. But most are just bikes styled to look like mountain bikes and not really equipped to handle a downhill ride.
A Wal-Mart "mountain bike" may be OK for riding local flat trails, but certainly is not a serious bike for going down the side of a mountain.
Once again, we are victims of style and status. More appropriate bikes for daily use do exist, but we eschew them in favor of the look of a serious mountain bike, even if it leaves you with a posture that is uncomfortable for daily riding (there are ways of fixing that, of course).
It is what I call the "Z28 Effect". Back in the 1960's, General Motors offered on the Camaro, a special racing option for Can Am racing, known as option Z28 (GM's option sheet uses letters and numbers to designate options for their cars). It featured a 5-liter engine (not the largest available), no heater or radio, no automatic transmission, no air conditioning, no sound deadening, and not even nice wheels (dog-dish hubcaps on steel wheels). A set of headers was thrown in the trunk for dealer installation.
It was meant for racers only, but soon word got out that the ultimate and rarest of Camaros was a Z28. And pretty soon, people were clamoring to have this rare and unique car, even though it was not a very comfortable car for daily driving. "I want a Z28!" the buyers would say, "But with air conditioning, automatic transmission, and an AM/FM radio!"
And General Motors, sensing a market opportunity, did just that, offering fully pimped Camaros with the Z/28 moniker (now with a slash) to the masses. What was once an option package designation became a model brand. And once again, consumers are aping the actions of others, without really understanding why they are doing so.
Name a status item, and chances are, it is subject to this effect, in one way or another, usually by design. By now, you should know that diamonds are carefully marketed and the supply controlled to create demand for them as "luxury" items. The diamond industry invented the diamond engagement ring and created the myth that diamonds are rare and coveted, when in reality they are plentiful and useful only for industry. In terms of attractiveness, they are rather ugly compared to colored stones. But we are all convinced they are desirable, so they are.
The joke is, of course, that today we even covet costume jewelry. When I was a kid, rhinestones were considered the ultimate in tackiness. They were called paste, glass, or costume jewelry. And folks who wore such trash were looked down upon. Today, we call them "Swarovski Crystals" and they are considered the height of luxury, at least by some, who actually pay a premium for them.
Others, however, realize that from more than a few inches away, a piece of glass and a piece of diamond look pretty much the same, and they embrace "costume" jewelry for its appearance, not its status, value, or collectability.
Cars are a prime example. The whole "SUV" thing exploded from the 1980's when four-wheel-drive became a "thing" and ordinary people decided they needed a rugged "off road" vehicle to drive to work every day. People would think they were having radical off-road adventures every weekend! Those lamers in their sedans don't know what they're missing!
But of course, the SUV buyers quickly tired of rough suspensions, live axles, and plebeian interiors. And pretty soon, nearly every car made was called an "SUV" and came with (or was available with) some kind of all-wheel-drive (without those messy and hard-to-use levers, of course!) and leather seats and soft rides and whatnot. Since none of them ever went off-road, it really didn't matter if they didn't have any off-road prowess.
And so on down the line. People buy an iPhone or a Macbook because of the Apple logo on the back. They are worth twice to ten times as much as other brands, we are told, because they are. But try running half the programs available for a PC on a Mac - you just can't, particularly games. There is really no inherent advantage to a Macbook or an iPhone just as there is no real advantage to owning a stainless steel refrigerator. All you have are bragging rights, which are worth nothing.
So, why do we do this? And we all do it, so let's be honest right there. Even if we are paddling in a canoe, we look down our noses at those in a rowboat - never mind the 50-foot yacht next door. It is human nature to want to be unique, different, special, and above the soiled masses. We all do this, go get over it.
Even being anti-consumption is a status symbol, or can be. And when it comes to status symbols, the reality is, it doesn't matter whether other people perceive you to have status, so long as you believe it to be so.
So what is the point in all of this? Well a few things. First, realize when you are buying status or worse yet, aping status. Because status costs you money, and if you can avoid that, you can save yourself a lot of dough, even if the housewives on your street will snicker at you for having a plain white refrigerator or an ordinary sedan.
Second, you can save a boatload of money if you can avoid status, or at least seek out things others are overlooking because of status. Right now, automakers are giving away cars because everyone wants an SUV, even though most SUVs never, ever, ever go off-road. If you really look at your automotive needs rather than status desires you can score a better deal on a vehicle that costs less to buy and gets better gas mileage to boot (and won't have expensive AWD repairs down the road).
And it is not like you will be living a deprived life, either. Rather, you just won't have bragging rights with your brain-dead neighbors, as they sip their Starbucks while texting on their iPhone while driving their overwrought SUV - all while hopelessly in debt. In the long run, who is really better off, you or them?
Because that is the real problem with status - people strive for status and often bankrupt themselves doing it, either literally or morally. Even if they can "make all the payments" on their collection of overpriced junk, they are under-funding their retirement or working harder than they should, just to have "things" they never have a chance to use.
And I say this from experience. Having fancy things is indeed nice. But when you have to work long hours to have them and never have a chance to enjoy them, what exactly is the point?
