Monday, June 5, 2017

One of My Heros

NOTE:  This is a posting I started some time ago, but just recently finished.  Believe it or not, I have a backlog of over 300 draft postings

The choices you make in life affect how your life turns out.  For Americans in particular, our life choices are very important.  You can end up comfortably well off in this country, or become one of the burgeoning whining impoverished middle-class.  And today, more than ever, these choices are staggeringly important.

It is interesting, but there appears to be two Americas today - the first America, which is vanishing rapidly, believes that if you work hard, save your money and learn to live without all the crap hyped in the media, you will get ahead on your own merits.

The second America, which grows larger every day, wants to buy all the crap they advertise on television, and go heavily into debt by doing it.  They then complain about the "unfairness" of it all.  After all, they have all the trendy crap that everyone else has - and deserves, why are they broke all the time?  It must be someone else's fault, right? 

And being wealthy - that is something other people do according to this second America.  They will need to save up a million dollars by the time they retire - and yet they look upon that as a staggeringly large amount of money and impossible to save.  Yet the average household in America earns that much every 20 years.

This second America, when they look for financial advice, don't want to hear about "live within your means" or "do without cable TeeVee".  No, they think that being financially astute is all about consuming better - clipping coupons, getting discounts, cash-back bonuses, or scoring a secret "deal" that others are not getting.

If they do invest, it is to get-rich-quick, through Bitcoin, or an IPO, or buying gold.  Only a chump would diversify and save money over time!

But there are no such deals really.  You can't spend your way to wealth.  You cannot eat your way to slimness.  And if you seek out a "killer deal" you are more likely to be conned by a con artist than to get any sort of bargain.

The best "killer deal" there is, is to leave money in your wallet and decide to do without.  But no one wants to hear that.

Well, some folks get it.   And no one wants to hear that, either.  No one wants to hear that others are smart enough to save their money, not spend it.  No one wants to admit they made horrendous mistakes.

I made horrendous financial mistakes over the years.  And I have documented most of them here.  What saved me was a good career (which doesn't pay nearly as well, anymore, so forgetabout that!) and some smart investing (getting lucky, not being brilliant).  But I could have, had I chose to do so, saved more money and gotten rich, even without a high-paying job or luck in investments.

And a friend of mine did just that - while taking the time to travel the world - twice, on a budget.  And yes, we all mocked her for being "cheap" all the time.   But she wasn't "cheap" she was SMART with money, and as a result, she owns money today.  Others are not so smart, and are in debt all the time.   She and her husband are settled down, own a home, have children, and have their retirement plans in place.

Other friends of ours, well, did different things.  One went on a spending spree, racked up credit card debt, and declared bankruptcy.   Not content with this, they decided to "invest" in Real Estate, poorly, and ended up in bankruptcy court - again.   Others did the usual American thing - rack up credit card debt and then pay it off with a home equity loan.  Ouch.  BTDT!

But what is interesting about my "hero" friend, is that if you compare the lifestyles of the group we were all in as 20- and 30-something friends, you would not have said there was a significant difference between any of us.  Sure, some had fancier cars and clothes - those were the ones mired in credit card debt.   Still others like to live large and buy a round for the bar - they ended up broke as well.

It turns out that "scrimping and saving" isn't really heroic after all.   It takes some effort, but not heroic effort.   It just means, well, taking this shit seriously.

And I guess, given how most Americans live, that is pretty heroic!