Friday, September 29, 2023

Bonus Offers!

Should you sign on for a bonus offer?  That depends on whether it is something you'd do anyway.

I noted before about coupons and discounts that, of course, you should take advantage of, if you planned on buying the item in question, anyway.  For example, they are offering a BOGO on cantaloupes and you planned on buying two cantaloupes.  So you take the deal - it makes no sense to pay twice as much for something you actually wanted.

On the other hand, it makes no sense at all to use a coupon to buy adult diapers unless you or someone you know is incontinent.  "But it's such a great deal!  You can't afford not to buy!" cries the hoarder.  And I know folks like this - who buy things because they are a "bargain" even if they have no use for the item in question.  Their homes are overflowing with bargains.

A reader writes, asking me what I think of promotional bonus offers from banks and financial institutions.  I am always suspicious about reader suggestions, as I wonder whether I am being trolled or unwittingly promoting someone else's agenda.  The reader provides links to websites, but most appear to be aggregation sites with funny names ("Debt Donkey" - really?) that merely have links to other financial sites (and no doubt collect commissions from those who click).  For example, if you clicked on this link to open a Capital One credit card, I would get $100.  Think about that - put up a website with links like that, and you could really cash in.

By the way, don't click on that link.  I don't need the $100 and you need another credit card like you need a hole in your head.  But it illustrates what some companies will pay for "leads" and how lucrative being an "influencer" can be.  I am in the wrong business!

All that being said, I have latched onto some "bonuses" in the past.  I was planning on moving some money from Fidelity to Merril Edge, as if you have a certain balance with them, you become a "platinum" customer of Bank of America and they waive all sorts of fees for you.  So when they offered me $1000 to transfer $100,000 to their trading account, I thought, "why not?" Free trades was icing on the cake - compared to Fidelity's fees at the time.

Similarly, Capital one had a deal where you would get $200 if you put $10,000 into a Capital One savings account.  Since the interest was far more than I was earning at Bank of America, I thought "why not?" and did it - twice.

But those were things that I wanted to do anyway, that ended up saving me money and didn't involve taking on debt.  Other offers are just bait on a bear trap.  For example, credit card offers of 0% financing can be a lifeline (at the cost of a 4% balance transfer fee) or a lead weight carrying you down to Davy Jones' locker.  I've seen offers for credit cards where if you take out the card and charge X dollars within three months, you get Y dollars (like $200) back right away.  Sounds tempting and indeed, I "scored" with one of these once.  But what they are counting on is you being sloppy with your finances and running up your credit limit and paying far more than that, in interest, within months.

Tempting, but then again, most traps are. When you walk through the woods and see a nicely baited trap, you have to always ask yourself, what's the catch?  Because there's always a catch.  In my case, I make sure to read all the fine print and make sure I follow all the rules to the letter - and then carefully monitor the account to make sure they followed through with their promises.

It is like 90-days "same as cash" deals, which I have bitten on three times in my life, but have yet to get bitten by. Yet.  The first time was for a waterbed (a real necessity, right?) which I paid off on the 90th day, much to the distress of Household Finance Corporation (HFC).  The lady at the office (yes, I drove there on the 90th day to pay it off!) pleaded with me to "let the balance roll over" as I would "have all this cash to spend!" and of course, pay HFC 15% interest for three years.  No Thanks.

The next time was when we were remodeling the lake house.  I had about $3000 in supplies to buy and they offered 10% off ($300) if I would open a Home Depot credit card and get 0% interest for six months.  I did it, and made $500 payments every month for six months and paid no interest.

The last time was when we put replacement windows in the Jekyll house.  Same deal, although Homo Depot was offering 0% interest for a year as well as 10% off.  We paid it off in three months.   The "benefit" of "playing the float" is de minimus if not illusory.

Why would they offer these deals?  After all, in each case, I was prepared to pay cash for the purchase!  The answer is, of course, that it was a carefully baited trap.  They hoped my personal finances were a nightmare and that I wouldn't pay off the balance in time and that retroactive interest would kick in the day after the 0% offer expired.  The $300 off they gave me would be wiped out by over $300 in interest charges.  And if I took months or even years, to pay off the balance (and charged even more on the card) they would rake in hundreds, if not thousands, more.

By the way, that is one of the "tricks" with these deals - and you have to read that fine print in four-point type to realize it.  Say you get the $3000 on 0% interest for six months, and they mail you a shiny new Home Depot card.  You go back there to get a box of nails and figure, "why not use the new card?"  The problem is, you've added to the debt load, and unless all the debt is paid off by the deadline, you end up paying interest on the whole thing, from day zero.

It is just a trap, and like a loaded handgun, it should be handled carefully, lest it go off and blow off a limb, or blow your brains out.  Yes, you can handle a handgun safely, with proper training.  But then again, you never have to worry about it if you don't have one.  And less financial stress is better than more, even if they offer you bonus miles or bonus bucks or 0% interest.

Just bear in mind that bonus offers are not part of "customer appreciation day" or a "free gift" from benevolent banks.  They are a trap for the unwary, and if you think you can outsmart a multinational banking juggernaut, well, be my guest.  Myself, it is more like juggling grenades - with the pins out!

Thursday, September 28, 2023

Deadbeats!

People who pay off their credit card balance every month are known as "deadbeats" in the credit industry, as they never pay any interest charges.  I pay off my balance daily, so they must really hate me!

According to Investopedia, a person who pays off their credit card balance monthly is known as a "deadbeat" - and it is not hard to see why.  The merchant fees of 1-3% (or more) per transaction are not profit to the credit card company - that money barely covers the overhead cost of running the system - the computers, shipping out physical cards, customer service, and the like.  They break even on merchant fees.  The real money is in recurring interest charges of 7-25% (or more!) that many - more than half - pay, as they carry a balance from month to month.  As many as 15% have carried a balance for almost two decades!

That is a LOT of interest to pay on a cheeseburger you shit out in 2006!

This should not come as a surprise to any of us - that 55% number is dynamic.  Chances are, over 90% of the population has paid credit card interest at one time or another.  As I noted when I started this blog, everyone, it seems, goes through a credit card debt crises at one time or another.  As young people, we start out with a shiny new credit card and think we've "made it" when in fact, we've just stepped into a deadly trap.

We spend on the card and pay it off - the first month.  The second month, we are starved for cash (having over-spent the month before) so we pay off only part of the balance and pay a small amount of interest.  We'll catch up next month, right?  Maybe those lottery tickets will pay off by then!  This is how people really think, deep down, even if we don't want to admit it.

So the balance slowly climbs and we try to forget about it.  Pretty soon, we're barely making the minimum monthly payment.  And after that, well, we don't even do that.  Late fees apply and a "penalty" interest rate kicks in.  If you had trouble paying off the balance before, well, you'll never pay it off, now.  Either you have to sell a kidney or declare bankruptcy.  There are no other choices.

That doesn't stop people from looking, of course.   People in perpetual debt are easy victims for con artists, as they are always looking for an easy way out.   Maybe that click-bait ad on the Internet that talked about a "government program" to get you out of debt is legit?  Hope springs eternal.

Eventually, the money has to be paid back - it always does, as student loan borrowers are sadly discovering.  And often, what sticks in people's craw isn't that they have to give up a meal a day to pay off the debt, but that they have to sell the hobby car or jet ski or forego the rest of their planned "sleeve" of tattoos.  For most Americans, intractable credit card debt means giving up luxuries - the very same thing that got them into debt in the first place!

But what about the very, very poor who really are living hand-to-mouth? Most credit card companies won't touch them to begin with.  Sadly, there are companies - "payday loan" places - that will milk even this thin gruel for a few drops.  And sadly, these sort of deals were once deemed illegal until a certain political party convinced everyone that laws against usury were "bad for business" - their business.

But I digress.

We were camping in an Army Corps park ($22 a night, right on the lake!  $11 a night with the "Geezer Pass") and a couple next to us had a very fancy big 5th wheel trailer with four slide-outs and all the toys, plus a 1-ton pickup to pull it with.  We looked pretty shabby in our little trailer and used 1/2-ton truck!

They were nice folks and we had a nice chat.  They were about our age, but still working.  I overheard the husband talking to his wife about a credit card offer - "0% interest for six months on balance transfers!" he crowed.  I realized then, they were heavily in debt and couldn't afford to retire, even though they could "afford" a lot of nice toys.

And yes, those balance transfer things might be a lifeline, but they usually come with a 2-4% upfront transfer fee, so the credit card company is, in effect, charging interest on your 0% interest.

We've met quite a few couples like this in our travels. Sometimes, the husband is retired while the wife is still working - a situation that makes us scratch our heads.  If one can afford to retire, why not the other?  Even if you are forced out of a job and your spouse still has to work two more years to be vested in their pension or something, why not find a part-time job yourself?  The idea of one spouse being retired while the other still works makes no sense to us.  But enough of my soapbox.

What was an interesting revelation from all of this was that appearances can be deceiving and just because someone has a lot of shiny toys, it doesn't mean they are wealthy, in fact, far from it.  A lot of these folks in the RV park with all the nice stuff are all one payment away from bankruptcy and repossession.

And I wrote about this before - many times.  A widow approaches me about the $300,000 motorhome her late husband had bought.  She has to sell it, but owes more on the loan than the coach is worth.  Or another couple, who spent their 40's tithing to an evangelical church - buying stained-glass windows for the sanctuary, no less!  Leasing new cars every year and having fun and now broke in retirement.  They had a paid-for motorhome, but decided to "trade up" to a de-luxe motorcoach because someone at a campground mocked their old motorhome for not having a slide-out.  They couldn't afford the payments, of course, and eventually, it was repossessed.

"I'll just work until I'm 70!" they say.  Nice theory, if they'll let you.  At age 63, I am qualified for no other job even as a Walmart greeter.  The working world has no use for old people.  So a better plan is to pay off all this debt before you retire.

This idea is alien to most people.  The idea of perpetual debt is so ingrained in our society that to be "debt-free" is seen as Communist or something.  And thanks to student loans, well, we've trained two generations (or more) on the idea of perpetual debt handcuffs.  Just charge it all now - and pay later!

Later never comes.

All debt has to be paid back, with interest.  So you are not "missing out" by paying off your credit card every month, you are getting ahead.  You have to pay for those purchases eventually, so why not pay for them now, and avoid all that revolving interest charges?   Why not pay $5.99 for that cheeseburger instead of $468.83 after 20 years of revolving interest?  No, really, it is that much, at 22% interest, compounded monthly, over 20 years.  And people pay this!

Then again, as a "deadbeat" (today) I benefit from the 55% of Americans who carry a balance.  Not only do I not have to pay monthly interest (or annual fees), they actually give me cash-back, about $100 a month or so.  Contrast this with the interest I was paying - up until 2010 when I started this blog - which was more than that amount.  Who would walk away from $2400 to $3600 a year?  A lot of people, apparently.

Of course, I hear from a lot of these folks that they are "making good money" so worrying about "trivial" expenses like $200 a month in credit card interest, is not worthwhile.  They'll just make more money, later on!  But of course later on never happens.

It is sad, of course, to see this happen to people - it happened to me, at one time!  But then I realized that wealth isn't the size of your trailer in the trailer park, but cash money you have in the bank.  And being debt-free means less stress and more flexibility in your life.  It may seem keen to sign loan papers on a shiny new thing, but a year or two later, it ain't so shiny - and you still owe all that money.

Be a deadbeat - the kind the credit card companies hate!

Wednesday, September 27, 2023

Planet of the Idiots!

Are people really all that dumb?  Sadly, we all are!

Many years ago, when I was smoking pot in the tree house at Sigma Chi at GMI, I had a pot-fueled epiphany.  The difference in intelligence, between the very least of us (think: mentally handicapped) and an Einstein, was insignificant, compared to the infinite wisdom of the universe.  We like to think we are "smart" people, compared to others, but in relative terms, compared to the wisdom of the Gods, we are all equally as stupid.

A friend of mine, exhaling bong smoke, disagreed.  From his perspective, there were dumb people who did stupid shit, and then there were smart people who didn't.  And in retrospect, we both were right.

There are some folks (ironically, dumb folks) who think mankind has figured out all the answers.  We have all this technology!  We send rockets to the moon!  We are developing "AI" and will soon have self-aware computers!  Robots will do our bidding!  And any day now, medical science will discover the miracle of eternal life - after all, why should we have to die, right?

Well, I hate to break it to you, but ChatGPT isn't alive and never will be.  We can make machines that mimic human behavior - either verbal, visual, or physical.  Robots can dance and pick up things and sort them, but they are not alive, nor will they be anytime soon - like in 1000 years.  Yet, some folks (again, idiots) believe we are on the cusp of a "singularity" when artificial intelligence takes over and becomes alive.  Great premise for a movie starring Arnold Schwarzenegger, but that's about it.

We are not Gods and are not about to become Gods, either. We're just smart monkeys who have figured out how to use fire and not much else.  We don't even have a working model for our economy.  We can't even control our own primal urges.  We can't even think straight.  We are not about to become immortals or invent self-aware robots.

Sorry, but it just ain't happening.

That's the problem with humans.  We just don't understand infinity.  We think infinity is a finite number and that if you multiple ∞ times two, you get 2∞.   2∞=∞ - not twice infinity.   On the other side of the coin, two times zero is zero.  And our level of intelligence, compared to the infinity of the universe, can be rounded down, easily, to zero. So the smartest of us on planet Earth is about as smart as the dumbest.  We are not much smarter than snails, or even amoebas - with which we share the same fundamental chemical structures.

So we are easily suckered into things like "eternal life" in heaven, without thinking what that really means.  It means you would have enough time - infinite time - to learn every language, every skill, every instrument, and meet ever person that ever lived (on every planet in the universe) and eventually know everything so that you would become a God yourself (sort of like Mormons!) which is, of course, blasphemy.

So idiots, who don't even understand how their phone works or even their car, think that we are smart enough to invent life itself, or cheat death.  It ain't happening.

But this sort of mentality illustrates why people are sucked into schemes by con artists, or believe in stupid things like Qanonsense or that Donald Trump is going to "save America!" (and hand it over to Russia, apparently).  We are a nation of dummies - a planet of idiots.

Most Americans can't even balance their bank account - and they carry a balance on their credit cards.  I know I did at one time, and I'm supposed to be "smart" according to my sixth-grade teacher.  The sad fact is, even Einstein was just a bag of chemicals, and while analytical, probably succumbed to emotional thinking sometimes - maybe many times.

And that's a smart guy.  Consider the idiot.  He's even more prone to emotional thinking, superstition, and tribalism.  And since his "tribe" tells him to "go forth and multiply" he does - making more idiots for the tribe to control and use.

I think, however, that it is a greater aspect of humanity that we dream of better things - creating robots and exploring space.  And recently, our hopes were raised by the prospect of great things in the future - exploring or even settling other planets and creating robots that would allow us all to live a life of ease.  But our hopes were dashed, it seems, when it turned out that these dreams - as well as those of a life powered by the sun and fed by electricity - were yet another drug-induced hallucination sold to us by yet another con-man trying to pickpocket us.

The sad fact is, the great majority of the world lives hand-to-mouth, and when you struggle to obtain sufficient caloric intake for the day, cozy ideas like "Democracy" or even "Civilization" are luxuries, not necessities.  It is only in wealthy Western countries that we can indulge the fantasy that the world is on the cusp of a new order.

I wrote before about living life on Mars - or indeed any form of extended space travel.  There would be no room for Democracy or even religion.  No Facebook or Twitter, either.  You could not run a space colony, where every breath of air was metered out and paid for.  And thus, you could not have space colonists who believe you could "pray for more air" or even vote for it.  There would be no room for Jesus or Qanon or any other form of fantasy life.  There would be no room for mental illness, either.

This is, of course, a sad realization, as it is clear that belief and fantasy are part-and-parcel of humanity.  We can't go to the moon without reading some scripture, if only for the audience back home.  And perhaps this belief of a "singularity" or colonizing Mars is indeed a new form of religion - based on fantasy and not fact.  People put their faith in Space Jesus and find their dreams dashed when he turns out to be a schmuck and con-man.  Better to put your faith in someone in a robe, long-dead, who won't disappoint you right away.

Of course, I have to include myself in this gaggle of morons we call humanity.  On more than one occasion, I have been baited, trolled, triggered, and abused - and allowed myself to be so.  I have fallen victim to thinking emotionally - a gut reaction every human being has.  We all react as a result of millions of years of evolution.  We distrust strangers or those who do not look and act and dress as ourselves.  Racism isn't some weird anomaly - it is the default mode of operation for humans.  Those who "loved thy neighbor" were cleansed from the gene pool ages ago.

Which gives us hope, I guess.  Because intellectually, we can rationalize that racism and prejudice and superstition and emotional thinking are wrong.  We can and do strive to be better people - well, at least some of us do.  Others wallow in their own crapulence and call it a calling from the Lord.

There is hope for humanity, provided we keep thinking and stop emoting.  And stop hoping and act.

Tuesday, September 26, 2023

Unregulated Markets are Dangerous Markets!

Libertarians pine for an unregulated economy.  They have no idea what trouble that would be.

I wrote before about mortgage fraud.  The mortgage industry was largely unregulated and bank employees and mortgage brokers were paid bonuses based on how many mortgages they wrote, not on how may good mortgages they wrote.  Regulations and rules were loosened to the point where "liars loans" based on "stated assets and income" were issued, based on "zip code appraisals" - the brave new world of lending.  In other words, you could buy a house by saying you made $500,000 a year and had $5M in assets - even though you were unemployed and broke.  And so long as the house was in the same neighborhood as a bunch of expensive homes, you'd get the loan - never mind it was a broken-down hovel.

It was a situation ripe for fraud, and the fraudsters jumped right in.  I wrote about the technique before - you use straw buyers to flip the same house again and again, until the "value" (based on the sales price of these sham transactions) shows the house is now worth three times what it was.  Each time, the "seller" takes out cash at the closing table (which he hands over to the crime boss) and eventually, once the game is flogged to death, they default on the loan and walk away with all that cash. The straw buyer's credit is ruined, of course, but he finds that preferable to floating face-down in a canal near Miami.

If you don't understand how that works, don't feel bad - most people don't get it.  They think "mortgage fraud" was something banks did to people, not vice-versa.   And yes, a lot of "little people" got their tits caught in the wringer because they saw the "prices" of houses skyrocketing (due to these sham sales) and decided that, they too, were going to "get in on this real estate thing" - and of course, most of them lost their shirts.  Collateral damage.

That may sound callous - particularly if your folks lost their house in 2008 or so.  But I noted again and again in this blog that there are people in this world who will, given the choice between ending world hunger and having another dollar in their pocket will take the dollar.  From their perspective, screw humanity, where's my hot meal?  So the mortgage fraudsters made millions on these deals, but the collateral damage was in the billions - of not more.

And yes, the same thing is going on today, a mere decade later, and no one seems to see the pattern.

The problem was - and is - that regulations in the mortgage market were loosened.  When banks started issuing "liars loans" and then bundling them as mortgage backed securities and people started buying those securities - without a lot of oversight in the entire process - the whole thing went to hell.  This is the Libertarian paradise so many idiots pine for.  A little regulation now and then is a good thing.  We have laws against people going into a bank with a gun and holding the place up.  We should have laws against the banker looting the place from the inside.  And we did at one time - guess which party claims these are laws "inhibiting free enterprise"?  And they are right, if you define "free enterprise" as fraud.

A few articles a have come out lately illustrating how NFTs have fallen from a billion-dollar industry to mere millions.  Most are worth a tiny fraction of what they once were worth - a classic "bubble" economy.  The entire market - and that of crypto in general - was unregulated and this was touted as a feature by Libertarian wanna-bes.  Freed of all this restrictive regulation by the SEC, their dreams could soar!  And crash.

During the heyday, some NFTs sold for millions and the trading volumes were high.  Since the market was totally unregulated, I suspect that many if not most of these transactions were straw-man sales designed to hype the price of NFTs.  "Look!  It went up 1000% in value!  It must be a sure thing!"   Never mind that the "value" was specious - just one straw-man shell company taking money out of their left pocket and putting into their right pocket (of another straw-man shell company - both having the same owner).

And again, there is collateral damage.  A huge portion of most cryptocurrencies are owned by a small number of people - a few thousand according to some sources.  To make money, they need to hype the price of their crypto or NFTs and get someone to actually buy the damn things in a non-straw-man transaction.  The Internet to the rescue.  We've all seen how easy it is to convince people online that the world is flat, paper mache aliens exist in Mexico and that the moon landing was faked (and vaccines cause autism, and CoVid was a government plot and.. well, fill in the blank).  So you go online with an army of trolls and bots and you hype this crap and you can get away with it, because it is not a "regulated security" - or so you claim.  And by the time the SEC gets on the job, well, you've walked away with millions - or hundreds of millions.

Of course, even regulated securities are at risk if regulations are loosened or enforcement is defunded - again something Republicans do when in power - as well as gut the IRS.  Hey, if you can't defraud investors and skip out on taxes, that's no fun - right?  And yea, even Democrats get in on that deal from time to time.

So in the last few years, we have seen penny-stock pump-and-dump go mainstream, with bots and trolls hyping obscure and dead-end stocks like AMC movie theaters and GameStop video game stores.  What's not to like about going to the movies?  Paying $15 for a ticket and $20 for popcorn and then having to deal with a poacher in your "reserved seat" and some teenager who is talking through the whole movie or another idiot holding up his phone trying to video it.  Again, regulations - back in the day, they'd toss your ass out for doing things like that, but today, they are too afraid of confrontation and lawsuits to they engage in laizze-faire customer service - and wonder why people shy away.

Video game stores?  The latest releases of consoles have no physical media devices.  People download games online and buy consoles online as well.  GameStop was and is a dead-end business.  But by hyping the stock, they caused "little people" (collateral damage) to buy shares, which drove up the price, making the forecast self-fulfilling.  It is the same effect in the penny-stock pump-and-dump, only amplified 1000 times.

The collateral damage, in addition to the fools who bought these hyped stocks (or worse yet, options) was the markets themselves.  When markets became a vehicle for fraud, people stop investing.  Which brings us to the IPO - the biggest con out there in the last 20 years.

Back in Henry Ford's day or maybe that of Alexander Graham Bell (no relation) you issued stock to raise money to build factories or run phone lines and establish the business.  Today, you do an IPO which is not an "initial" offering at all, as insiders already own shares in the company.  Some IPO prospectuses are so bold as to outright say that the purpose of the IPO is to provide a vehicle allowing the insiders to cash out - at the expense of over-enthusiastic stock buyers (collateral damage, yet again).  Once again, the Internet and even the "legitimate" financial media are complicit in this, hyping each new IPO as the chance to "get in on the ground floor" when in fact, you are getting in on the third or fourth or tenth floor - if you are lucky.

Again, these things are loosely regulated and worse yet, people don't read the actual prospectus, but read a tweet or a newspaper article hyping the latest drop.  You can, legally, issue stock in a company whose prospectus says, in bold letters, that you plan on taking the investor's money and spending it on hookers, gambling, booze, and cocaine - and so long as you stated this, you would not be breaking any laws by doing so.  Woe be to the investor who fails to read the prospectus, but instead listens to the shouting guy on the financial channel.

Sadly, we went through all this before - back in 2008, and every decade or so back to 1929 - and before!  American history is a history of boom-and-bust, and often this is by design, as people make money when stocks soar - and make more money when they crash.  After the 1929 bubble burst, we instituted regulations that banks had to have money on hand (and were insured by the FDIC in case they didn't.  And banks were forbidden to speculate in stocks.  The stock market was regulated so that it was a lot harder to just offer shares in a wholly fraudulent company.  And for a while, this worked - until people petitioned to loosen the rules again, and the fraudsters found new work-arounds for existing rules.

And like clockwork, the small investor throws hundreds or thousands at "the next big thing!" and loses it all, while the man behind the scheme rakes in millions, if not billions.

A little regulation in the marketplace is a good thing.  We need to know that the food we buy isn't tainted, the water we drink won't kill us, that the gasoline we buy isn't watered-down.  We have rules in place to make sure of these things, and yes, "government bureaucrats" enforce these rules.  And the people who complain about the rules and the bureaucrats are usually the folks trying to con the rest of us.  "Can you believe some pencil-neck at the EPA won't let me set fire to my 300-foot high pile of used tires?  I mean, how else am I supposed to get rid of 'em?"  That sort of thing.

Sadly, it seems this pattern will continue, again and again, unabated, so long as people can be sold on something-for-nothing and get-rich-quick.

Hang on, it's gonna be a bumpy ride!

Monday, September 25, 2023

Why Inflation? Because You Keep Buying!

When a business raises prices and sees record profits, but no drop in sales, they have no incentive to reduce prices.  What a healthy meal, by the way!

I saw a pleading online asking why fast-food prices have gotten so ridiculous lately.  "A value meal costs over $10 with tax!  Why is this?"

Short answer: Because you keep buying it.

I noted before there is a hysteresis in the consumer marketplace.  You raise prices and people keep buying, as they figure the price bump is temporary and while they grouse about it, they think they can afford it.  They'll just cut corners somewhere else in their life - maybe discount dentistry or something.  Of course, what they actually do is increase their credit card debt, which is happening right now, nationwide, as personal debt load is at all-time highs and savings rates at all-time lows (and credit card losses skyrocket as well!).  We rob Peter to pay Paul - or in this case, to pay Ronald McDonald.

Until consumers stop consuming and seek alternatives, prices will remain high and keep going up.  And there are plenty of alternatives.  You can buy a cheaper item on the "value" menu, and bring your own beverage (water) instead of paying $2.58 for a high-fructose diabetes nightmare.  Or, you could go to a grocery store and buy food and learn how to cook.  This latter option is alien to a growing number of Americans who literally cannot feed themselves but instead rely on fast-food and fast-casual restaurants for almost 100% of their caloric intake.  And I am not kidding about this - for some reason, a whole generation was raised without knowing how to even microwave a hot-pocket.

I read another missive, "I paid $6 for this bag of potato chips!  This an outrage!"  Don't buy them, then.  If you did, and others did just that, the price would come down - supply and demand.  When you pay $6, you are saying this is a fair bargain, despite all your bitching to the contrary.  Or put it another way, money talks, bullshit walks.  Put your money where your mouth is (quite literally).

No one "needs" snack foods, and indeed, in a nation of morbidly obese people, maybe high food prices are a godsend.  Or maybe not.  We stopped for gas the other day, and Mark noticed that the car at the pump across from us had a 30-something 400-lb man in it (he never got out of the car).  His wife or girlfriend or mother (hard to tell which) bought him a large Snickers bar, which he put in his mouth in one bite.  Like some sort of sword-swallowing trick!  We were appalled.  But that's America, these days.

The food companies are not going to lower prices because you grouse about them.  "Oh boy, Clem Kadiddlehopper in Bumfuck, Oklahoma is complaining about the price of the bag of chili-cheese flavored Doritos he bought!  We'd better lower prices right away before he complains more!

That, of course, is never going to happen.  And sadly, this is the end result of Karenism - the idea that if we complain enough and "ask to see the manager" we will get our own way.  If only we answer an online survey or a Facebook opinion poll (always the pulse of America!) the powers-that-be will listen to our voices and change things for the better.

The reality is, your only opinions that matter are your money and your vote - the latter at a polling booth, not some stupid online survey.  When Clem stops buying chili-flavored Doritos, the company that makes them will notice - particularly when all of Clem's friends stop buying, too.  And sadly, that isn't likely to happen until Clem runs out of money and available credit on his credit card.  The grocery store is now operating under casino rules.   Once you run out of money, they toss you out.

So change will come - faster than we think  it will.  Housing is starting to cool off and may collapse.  Unemployment hasn't risen much - yet - but the idea that you can dictate your salary to your employer is already past its sell-by date.  Sadly, if the shit hits the fan in 2024, it will pave the way for you-know-who to get elected.   And no doubt, some in the GOP will try to sabotage the economy to make sure this happens.  Government shutdown, anyone?

There are alternatives to spending money on potato chips and fast food.  For less than the cost of a "value meal" item at McDonalds, we each had shrimp and corn chowder (Walmart Deli - $3.87) and corn bread last night (from a box of mix - 99 cents).  Rather than buying potato chips, I bought a bag of unpopped popcorn and popped it a few times this summer - one bag lasted us months.

There are alternatives, even when people think there are not alternatives - for food, housing, transportation, or even health care.  People seek out alternatives when prices go higher and they cannot afford to pay.

But when they do pay higher prices, well, then they can afford to pay - or at least that is the message they are sending to the merchant, who will keep raising prices until they stop buying.

It''s Economics 101, folks!

Saturday, September 23, 2023

Another Problem With Rewards Programs...

Dear Zenni Rewards VIP,

We are excited to announce that a NEW Zenni Rewards loyalty program will be debuting in October. In order to make room for our new program, we will need to end our current Zenni Rewards loyalty program on Sunday October 8, 2023.
Rewards programs are not forever.

I wrote about rewards programs and why they suck, before, twice, I think.  They are "customer loyalty" programs designed to reward repeat customers, but in the end, they kick the customers right in the teeth.  And apparently, customers tolerate this.

I wrote before how the old McDonald's app was a nightmare.   You could order food with it, but the store would claim not to have received the order but your credit card would still be charged.  McDonald's finally threw in the towel and found a new provider for their app, but this meant they cancelled the "rewards" program (no great loss to me, I used the app three times, only two times, successfully).  But others had hundreds, nay, thousands, of "points" accumulated and hoped to use them for future purchases.  Like that, those points evaporated into the ether.  That worked out well for McDonald's, didn't it?

Quite frankly, I haven't been to a Micky-D's in a long time, which is a good thing.  While you could score some "deals" on the kiosk, they started closing the in-store registers and going to an all-drive-through format, where you are pressured to order in ten seconds or less and the only things appearing on the "menu" are $11.95 Super-sized value meal deluxe artisanal sandwiches.

McDonald's claims there was no physical way to transfer the rewards points to the new app (it is like cold fusion - impossible to do!) so they just wiped out all the points you earned.  Of course, they could have transferred the points (a simple bot could crawl the database and log all the points - it would take a weekend to do) but since that would cost money (hiring programmers) and since they make more money by throwing away your points, they went with the second option.

And not without precedent.  Airlines used to offer "free flights" after 25,000 frequent flyer miles.  Overnight, they changed the amount of points needed for a free flight to 50,000. Before then, well, planes were half-empty most of the time, so you could actually use points this way.  Today?  Planes are overbooked and there are no free seats.  The best you can hope for is an upgrade to a better seat or to business class - but even those seats are taken, usually by a "premiere" member who has more points than you.

Another game that the airlines played (and Kampground of America - KOA - played) was to make it so that points expired over time.  Back in the 1960's you could accumulate airline miles and when you retired a decade later, use them to take the family to Hawaii.  No longer the case!  I had a number of miles on US Airways (Now American) and they told me than unless I paid a fee the miles would expire.  I let them expire.  Flying on an airplane today has all the appeal of a major root canal.  Who would be idiotic enough to subject themselves to that!

KOA did a similar deal - unless you accumulate a shitload of points in one year, your points "expire" at the end of the year.  So if you only go to a KOA once or twice a year, the points mean nothing.  And at $50-$100 a night (versus $11 at the Army Corps Parks) who can afford that?  And are you really "saving money" by chasing after points?  Of course not.

Uber had a rewards program as well - shut down in 2022.  You can understand why - even with the staggering fees they charge riders and the pittances they pay drivers, they are still losing money (Maybe the executive salaries have something to do with that).  They were following Lyft's lead in this.

The list goes on and on.  Companies either wipe out rewards points, or change the terms of the program so you can't earn anything - or they make it damn difficult to cash in those rewards.

The only "reward" you should seek is cold hard cash - and even those kinds of programs change their terms all the time.  Credit card companies used to offer generous "rewards" but they found out that people like me, who pay off their credit card balance daily never end up paying that sweet, sweet, 22% interest on a perpetual revolving balance.  That's just not cricket!  So 3% cash back on all your purchases, turns into 3% back on a selected category (gasoline) and 1-2% on everything else.  Santa is a takie-backie, ain't he?

Oh, by the way, if a company does offer "rewards" and the options are cash or saving up points for a free toaster or a meal at a restaurant, take the cash.  Our Obamcare plan has "rewards" points for watching videos about staying healthy.  I take the rewards as cash, in the form of a debit card (about $300 a year!) to pay co-pays at the doctor or for prescriptions, etc.  You can also use them to get a "free" toaster - but if you look at the "points" needed, you are better off buying your toasters at Walmart.  Most rewards programs are this way - they assume you will not think of "points" in terms of cash, and spend accordingly.  If they offer cash, that is usually a better deal.

I got the above e-mail today from Zenni, which sells glasses for cheap, online.  Both Zenni and eyebuydirect have pretty low prices on glasses, but both have all the charm of a carnival barker.  Buy now and get one free!  Half price on frames!  BoGo! NoGo? HoGo!  BlowGo! RoGo! - whatever.  The deal is, of course that their frames are startlingly cheap ($5 and up) but the lenses can cost $100 or more.  Still cheaper than the "boutique" optometrist in town, but the pricing is confusing at best - by design.  And they will SPAM the shit out of your inbox, particularly as of late.

I had bought maybe four pairs of glasses between myself and Mr. See from Zenni (far more from eyebuydirect).  They last a year or so of constant usage.  And sometimes you get a pair that you just don't wear very much for some reason.  So it is cheaper, but buying from either site is annoying.

Zenni has - or had - a "rewards" program and I qualified for such gimmies as free shipping (whoop-de-fucking-do!) and having my phone number etched inside the temple of the glasses (handy!).   So I didn't lose too much in the way of "rewards points."  I am sure others are pissed.  And they provided such short notice (two weeks!) to spend your points, you have to wonder whether making points "expire" is a neat way of getting people to buy desperately by a deadline.   A good salesman always pushes the pressure points on the prospect to get them to buy now.  "I had another customer interested in this very same car!  He said he was coming back tonight to buy it!"

The best deals, as I noted time and time again, are where you exchange cash and get goods or services in return. No coupons, no rebates, no rewards, no BoGos, no gas club discount, or sales pricing.  The latter are all used to obfuscate the real price of an item, and to get you to think you got a "deal" when in fact, you just purchased an item, or worse yet, bought something you really didn't need or want or bought more than you needed or wanted because it was "on sale!" or whatever.  That is the goal of all these programs - to get you to overconsume and to buy when you are not really interested in buying.

This is, of course, not to say you should march into a car dealer and demand to pay sticker price (which no one actually pays, unless they are really dense).  We are forced to play these discount games because they are thrust upon us.  But in some instances, the cleanest deal is the best deal.  The regular retail price at WalMart is usually less than the effective price of a BoGo at Publix.  But I have friends who are convinced that since they are "getting one FREE!" that the price at Publix is better - even though it is more than twice as much as the regular price for the same item at Wally World (and you don't have to buy two, if you don't want to!).

I wish these stupid retail games would go away, but for the most part, they won't - because ordinary people continually get sucked into them and will actually pay more or buy things they don't want because of these games.

People are idiots.  More on that, later!


Friday, September 22, 2023

Having Children


Should you have children?  Did you have a choice?

A reader writes raising the issue as to whether having children or not affected my retirement decision. Of course it did.  One reason I can retire early is that I didn't have kids.  Of course, if I had, they would all be grown right now and presumably not living in my basement.   But of course, over the years, I managed to squander at least a half-million dollars on cars, boats, RVs, a swimming pool, a vacation home, etc. (poor me!) which I guess would have paid for the cost of raising a kid or two (the number I hear bandied about is about a quarter-million per child).

As I noted before, another reader writes asking for advice (I'm not giving it!) whether to retire early, when they have a child still in high school.   This is a different scenario, of course.  I would think the big issue is health insurance - or the uncertainty thereof - as well as the cost of higher education down the road.   Maybe better to wait a bit - but that is their decision to make.

And occasionally, I get the angry message from someone who has made poor life choices (in every sense of the word) that I don't understand how hard it is to raise kids.   Well, that's true.  But again, I am not an advice column.  I am just writing for myself, to get my own life in order. Getting your life in order is your job, not mine.  Good luck with that!

But it raises the issue, should you have kids?   And it is an interesting question.  I mean, I could have had children, and for all I know, there may be a little Bobby running around out there wondering where his Daddy is (yes, in high school and college, I had a number of girlfriends).  And of course, being a male, I am still capable of procreating right up until my last breath, unless of course I have testicular cancer or something.

And of course there is adoption.  A lot of people tell us, "you should adopt a baby!" and we both say, "Uh, no, don't think so!"  And the reason is multifold.  We have many friends who were adopted and they seem to be doing well in life, although some are doing better than others.  But in every case, there are always issues with being adopted - indeed, everyone seems to have family issues regardless.  One friend of mine from my partying days would get all weepy after a few beers and say, "Did I ever tell you I was adopted?" and we would  always reply, "Yea, every time you get drunk, you Irish bastard!"  Because the Irish do tend to get emotional and weepy (or violent) when drunk.   If you doubt this, come to my family reunion sometime - one reason I stopped going!

So there are issues for any kid who is adopted - issues that can be overcome, provided you are not an emotional thinker and spend all day wondering why your Mother "abandoned" you.  But to be adopted by two gay guys - that seems like an additional complication.  And maybe we are old-fashioned, but the entire concept makes us a little uncomfortable. It seems that today, people are pushing the cultural envelope a little too far.  We thought it was great progress that gay men weren't being beaten to death.   Cross-gender restrooms and "transitioning" in the third grade seem like taking a good thing a little too far.

I think also, we both realize that we didn't have the maturity to handle something like that - taking care of ourselves was hard enough to do.  Oddly enough, at age 59, I might have be able to handle it.  But at age 30?  I'd be the abusive rageaholic my Father was.  And there's no need to raise another generation on that!

But it strikes me that there are two kinds of people who have children - those who feel they have to (due to a biological urge to raise children) and those who do so accidentally.  And the latter makes up the majority of folks who have kids.

Many of our friends reached a certain age where they decided they wanted to have kids - in fact it became a biological imperative.  Some, for example, went through extreme medical procedures due to infertility issues. Others adopted when those techniques didn't work out. Others had no issues, but carefully planned their family - how many kids to have, and when.  There is a biological urge to have children, which of course is a good thing, or we wouldn't be here.

Others - far too many - only have a biological urge to get laid.  Having children is sort of the after-effect of that.  A young man of 17 chirps (literally, on Twitter) that "I'm going to be a Father!" which I thought was a little over-stated.  You got laid.  You knocked up some chick, and now some young life is coming into the world, without a full set of parents, and without a means of supporting him into the future. Great work, keep it up!

And yes, these are the sorts of people who then take on the mantle of "parent" as if it were a sacred duty - such as the white-trash girl I mentioned before who made a big deal about being a "Mom" when in fact, she just got fucked in the back seat of a Camaro.   Being a good parent is not easy - and the best parents don't brag about their parenting.

But of course, there is no shame in getting knocked-up. It happens. You go out for a night of partying, and have a few beers, and before you know it, that boy who you kind of like is having busy hands and maybe you should have said no or gotten that condom out of the glovebox.  And the next day, you have a real hangover - with lifetime consequences.  And it is all-too-easy to say, "Well, get an abortion" when you can feel life kicking inside you.  So you have a kid.  It happens.  No shame in being human, so just get over that.

Having children is, of course expensive.  How expensive does depend on how you raise them.  Every day, it seems, we read another horror story about parents who literally starve their kids to death.  I suppose that is one way to raise kids on a budget, but you'll end up in jail.

Other parents, having spend a lot of money and time on children, consider them to be life-long possessions, or slaves - bound to do their bidding.  And this does not usually end well for everyone involved.

Still others feel that it is their obligation to continue their DNA legacy and indeed, this is a hot-button issue today - and in the past.  Elon Musk claims it is a societal duty to have kids - and none of his will even talk to him (even the ones too young to talk).  There has always been this worry that the dumber and lesser of us will reproduce exponentially and thus snuff-out the better part of humanity.  Sadly, such arguments are often a cover for racism.  Eugenics, for example, was a popular movement in the early part of the last Century, but was quickly discarded after the horrors of the holocaust.  We breed every sort of animal from horses, to cows, to dogs, and beyond, to favor certain genetic characteristics.  Couldn't the same be done with humans?

The problem with that argument is that some folks want to speed up the process by culling the herd, which leads to genocide. The other problem is, the folks who want to do selective breeding are often the worst examples of humanity and often not even a representative of the √úbermensch they strive for.  Hitler talked of the superior Aryan race, but he was, in fact, short and black-haired and had no children of his own.

Maybe that is a pattern - that those who are highly flawed desire the most to see humanity "perfect" and thus advance these Eugenic ideas the hardest.

What history has taught us, though, is that you can't tell in advance which combination of DNA will produce the person who cures cancer or solves the problem of world peace.  Selective breeding might not save humanity, but be the very end of it.  A world of  "super-men" may turn out to be a world of weaklings.

All that being said, that is another reason why I am not motivated to progenate.  The world is already too damn full of people.  I am not sure that adding more is helping at all.

But all that being said, sometimes I wonder what it would be like, to drive the minivan to Disney, with screaming children in the back seat, calling me "Dad" and whatnot.  I suppose that would be very rewarding, if done right.

On the other hand, I've seen firsthand how parenting can turn into a nightmare, particularly for the children.

And I suspect, my life would be far more circumscribed as well.  I would have been less likely to start my own practice, but instead stay at a "steady job" and work long hours to "bring home the bacon" like so many Dads - to a family I never get to see.  I would still be working today, just to fund my retirement.

And yea, you can say that is "selfish" I guess.  But on the other hand, maybe it isn't.  Maybe some people shouldn't have children and that's OK, too.

Just a thought.


Thursday, September 21, 2023

Why Management Loves Unions!

Unions were seen as a threat to industry until managers realized they could be co-opted to help the company, instead of the workers.

Unions are in the news these days, as union membership starts to increase and more and more businesses are unionized - or unions try to unionize them.  But oddly enough, some companies, while publicly grousing about how unions are screwing up their business, actually benefit from them and often manipulate unions into helping the company obliterate competitors or screw consumers.

We just had a big Teamsters strike, and it was settled after the Teamsters bankrupted Yellow Freight Lines.  Yellow was a weaker company than others and the strike quickly caused the company to fold.  Who benefits from this?  Other freight companies of course - such as UPS, who quickly settled with the Teamsters after Yellow folded.  They could afford to settle now, as the much of the freight traffic from Yellow would end up on their loading dock - increasing their profitability.

And historically, this has been the case.  In the 1950's and 1960's, some storied old car brands went bust, such as Studebaker, Nash, Hudson, and Packard.  Nash and Hudson became American Motors, but eventually, that too, folded in to Chrysler (although some say it was really vice-versa).  Studebaker had high labor costs and restrictive work rules under its UAW contract and could not afford to compete with GM, Ford, and Chrysler, who had the budgets to develop new cars that would meet new safety and emissions standards.  At the very end, Studebaker had one car model for sale, made in Canada.  They pulled the plug, realizing their paltry sales would not support the research needed to comply with future laws.  By that time, of course, both their engines and transmissions were being made by GM anyway.

So the unions, while causing headaches for management, also obliterated smaller competition at the same time.  It was a love-hate relationship between the company and the unions.  Of course, it all fell apart when foreign manufacturers came to the US and opened non-union plants.  Well, most of them, except Volkswagen, which opened a union plant in Pennsylvania which quickly closed as the costs were too high and the quality too low.  VW came back, of course, but workers voted down efforts to unionize.  Good thing, too, as the UAW would have shut down the plant as a favor to GM.

There was, of course, a scandal involving the UAW leaders taking bribes from automakers to have "labor peace."  Act shocked - I know.  Historically, many unions were hijacked by organized crime, which used union leverage to extract bribes in exchange for a strike-free workforce.  Apparently, some UAW leaders decided to do this as freelancers.

Today, the UAW is on strike, and already the car makers are promising a "car shortage" as a result.  How convenient for them!  Prior to the pandemic, there was a surplus of cars on the world market and dealers had to wheel-and-deal to get you to buy.  No one paid sticker price for a car back then, and "back then" was 2018.  The pandemic changed all that, and the carmakers paid attention.  By making fewer cars they made more money per car as rebates and discounts weren't needed.

When I was at GMI they taught us that market share was meaningless (something VW chased for years and nearly bankrupted the company!).  "We can make a million cars and make $1000 per car, or sell one car and make a Billion dollars from it - there is no difference!"  And while selling a billion-dollar car is hard to do (but not impossible, it seems) the idea has merit.  Overall profits mean more than market share.  So, sell less cars, use less effort, and make the same amount of money -  if not more!

The pandemic ended and cars and trucks and SUVs started cluttering up dealer lots.  Shortage over, folks!  Back to normal!

We can't have that, can we?

So, very conveniently for the car companies, the UAW goes on strike, and creates a new shortage of cars, driving up prices across the board.  This of course, helps the non-union companies as well as the unionized ones.  In fact, it could backfire, as the F150 buyer might be tempted to look across the street at a Tundra or a Titan from Toyota or Nissan.

Maybe this isn't the case, though.  Maybe the strike is part of this nationwide trend where people are upset that upper management takes home millions of dollars in stock options, while they get paltry raises that don't even keep up with inflation.   My former classmate at GMI, Mary Barra, makes $30M a year in salary and stock options.  Is that a justified compensation for any executive anywhere?  Bear in mind that her compensation is on the low end of the scale compared to some companies where CEOs take home hundreds of millions a year - or more.

GM used to settle strikes in a panic, back in the day.  Again, as our GMI professors told us, "Every minute, a new Chevy Caprice comes off the assembly line, that's $5000 in GM's pocket.  If you have a strike for even a few days, it costs the company millions of dollars!"  So back then, management cowered in the event of a strike.

Today?  I am less sure - it may all be political theater for the plebes to consume.  Conservatives can whine and moan about how unfair the union is being - after all, managers are paid in stock options and how can they make millions if the plants are idle?  Liberals can say "stick it to the man!  Unions, yay!" and both sides declare victory in the end.

Meanwhile, the consumer, looking to turn in his leased car at the GM dealer, finds out he owes $5000 in excess wear charges - which will be waived if he buys or leases a new GM vehicle.  Problem is, there are only six on the lot, all in hideous colors, and all priced $3000 over sticker - no haggling!

That is what happened to people I met during the pandemic.  They were screwed - which is another reason why leasing really sucks.  I feel sorry for you (not really) if your lease expired during this new "car shortage" - when will you ever learn?

If this strike lingers on for longer than expected, don't be surprised.  GM will benefit from a car shortage, in the short-term and even in the long-term, as they will claim it will take months to re-fill the "supply chain" once the strike ends.

Hope you aren't in the market for a pickup truck anytime soon!

Tuesday, September 19, 2023

Old is the New Young?

It used to be that 60 meant you were nearly dead.  No longer the case!

I recounted before how we were watching an old episode of Streets of San Francisco and in that episode, a group of "young punks" killed a shopkeeper.  "He was over 60 years old!" Karl Maldin said, "his life was almost over anyway!" - or something to that effect.

In an old episode of Dragnet, an "old lady" complains that she is "66 years old and not as young as I used to be!" and indeed, she looked like, dressed like, and acted like, an old biddy.

What shocked me about these scenes is that, well, I'm 63 and I don't feel "old" yet, other than everything hurts.  When people ask my age, I often say "53" without thinking, before I correct myself.  I hear people tell me I don't look that old - maybe late 40's or something.  Some young gay men call me a "hot Daddy" and yes, I even get hit on by women sometimes.  And I'm not all that attractive!

What is going on?  Is our generation aging differently than previous ones?  I suspect so, and part and parcel of this is better health care, less smoking, and a better understanding of the effects of sun on our skin.  The next generation may routinely live to 100 or more, if they lay off the opioids and meth.

When I was a kid, giving your kid sunglasses was never even a thing.  I still see some parents - rednecks, usually - who are wearing wrap-around shades at the beach while their kids squint in the searing sun.  No issues with cataracts for them, right?  Just give it 50 years.  And sun tan lotion - if we got it at all as a kid, it was "tanning butter" designed to cook your skin to a nice dark brown, and provide no protection from UV rays.  SPF?  What the heck is that?  And even when that stuff came out, we thought that SPF 15 was like the real deal.  Now they go 50 and up - and wear clothes on top of that!

Yes, chain-smoking and spending all day in the sun will make  you look old and wrinkled - and shorten your life.  And maybe this is part of the plan.  If you want a "conspiracy theory" this is it - that the "powers that be" promote unhealthy lifestyles, so that people don't live much longer than their reproductive and working lives.  Work until 65 - kick the bucket before 70!  That way Social Security is solvent!

When people started pointing out that smoking was deadly, the powers-that-be fought restrictions on smoking, tooth-and-nail.  They finally had to give in, but came up with new poisons to kill us off - an obesity epidemic fueled by cheap carbs and high-fructose corn syrup, or a drug epidemic fueled by cheap fentanyl from China.  And yea, the same powers-that-be (mostly conservatives) fight efforts to even educate people about eating right ("don't tell us what to do!") or provide NARCAN to overdosing addicts. They believe in the "right to life" but only for so long and only for the right people. Those unborn fetuses will make good workers and cannon fodder.  If only those bleeding-heart Democrats didn't keep trying to give them health care and proper nutrition so they live longer!  The world would be a perfect place, then - a few Billionaires and legions of minions!

But I digress....

It seems though, that our generation is aging more gracefully than the last.  Some folks ask me how I stay looking so young, and I reply, "the fat stretches out all the wrinkles!"

So maybe it is just that.  Martha's cheeks do look like they've been injected with something.  Probably with a pastry bag....

By the way,  she's over 80!

Monday, September 18, 2023

How Much To Live Debt-Free?


Just because you are debt-free doesn't mean you can live without money.

Note:  This is a draft from 2011, that I only completed today.  One down, 485 637 to go.

In an earlier posting, I noted that winning a car is a double-edged sword for some folks.  Oprah was thinking she was "helping" the needy by giving them $21,000 cars, but as it turns out, few of them could afford the $5000 to $7000 in taxes (which the IRS wants in cash) and the annual collision insurance. What's more, they likely would not even be able to afford to maintain the cars properly, and within a few years, they would be junk.  Most ended up selling the cars - and giving cash is a far better idea than giving away things that people might not buy on their own.

Elvis did this with his entourage - buying them all brand-new Chevy El Camino pickups to drive around his Mississippi "ranch" when he owned it.  Many of the entourage members secretly sold the trucks, as they needed the cash more than they needed a new El Camino.  And when "The King" found out, he was pissed.  But it illustrates the fallacy of giving hugely expensive gifts that are not cash - to people who need the cash more than they need an expensive gift.

Objects require maintenance and incur expenses - and often taxes. Give a poor person a fancy house and chances are, they might not be able to afford the property taxes on it.  Just because you don't have a mortgage, doesn't mean you don't have expenses.

For example, our house is finally paid for. Wow, that must mean we live for free, right?  Hardly.  Between our property taxes, insurance, lot lease, fire fee, garbage fee, water fee, sewer fee, and electric bill, we still need to come up with $12,000 a year to live here.  And if we don't pay this, they boot us out, eventually.  And that's not even considering maintenance expenses, which can easily total the same amount again, particularly as a house ages.  (UPDATE:  As you might imagine, these costs are higher today - perhaps 50% or more).

So, even a "paid for" house costs $1000 to $2000 a month to live in.  And that is what a lot of people pay to rent an apartment these days.  Owning a home is not really cheaper, even if it is paid for - in many cases.  Throw in a mortgage, and you are paying extra for the privilege of owning.

Granted, we could live an area with lower property taxes, lower insurance rates, fewer fees for fire, trash, water, and sewer.  But these fees never drop down to ZERO - ever.  So, once you pay off all that debt on the mortgage, all it means is that you cut out the largest single part of your monthly expense.  In some places, the taxes and other fees could be higher than your mortgage!

Of course, that doesn't cover all our living expenses. You still have to eat and drink.  We have tried to to trim our monthly food and beverage budget to less than $800 a month, but it has not decreased by much. 

Then there are the cars. Gas, insurance, and licensing fees are all we pay, as there are no car payments.  But even "just these" expenses are easily $250 a month, if not more, depending on how far we drive.   And even a "paid for" car is really costing you money, sitting there and depreciating in your garage, every day.  Most cars depreciate 50% every five years, so a $20,000 car might be costing you five bucks a day or $2000 a year, just in depreciation.  And depreciation is a real expense.

So, add it all up, and you are looking at a minimum of $2000 to $3000 a month, just to live, or about $24,000 to $36,000 a year (or more!).  Not a lot of money, and nearly at the poverty line.  Hmmmm.... I could qualify for food stamps!

Just kidding.  I would not go that route unless I was really desperate.  Safety nets are for safety - not an entitlement, like the guy with the question-mark suit would have you believe.

UPDATE: In the last few years, I have tried to live on $100 a day or $36,500 a year.  And for the first few years, it worked. Our taxable income was low, so we paid little in taxes and qualified for all sorts of things, such as an Obamacare subsidy and a low-cost hotspot.  But with inflation, we've had to withdraw more money from our IRA and that in turn increases our taxes, which means we have to withdraw yet more money, which means we lose subsidies and then have to withdraw more money..... the snowball effect kick in, to our disadvantage!

Not only that, but when your house is fairly new and your cars are fairly new, you might not "need" much income to get by.  But 10 years later, you need new appliances and a new roof and maybe a new car and suddenly, you need a lot more income to get by.  Those deferred maintenance expenses add up, just like the depreciation on that "paid-for" car.

So the coming years will be harder for us, as a lot of "big ticket" bills come due.  Of course, there are ways of working around this.  There is little point, I have learned, in "remodeling" a home unless it is really falling apart.  Good maintenance is sufficient.  Leave the next owner to do the "makeover" to their specifications.  You can remodel yourself into the poor house.

That being said, have you priced a new roof lately?  Ouch!

Sunday, September 17, 2023

Fall From Grace

Why do so many evangelical pastors turn out to be utter hypocrites?   And why do people still follow them even after they are exposed?

Human sexuality is not usually an optional thing.  Our brains are programmed to desire sex, the same way we are programmed to desire food - and water, and oxygen.  Those who didn't desire these things, died out or their genetic heritage died out, as they failed to reproduce.  So, if you decide you want to eat less food, you are declaring war on your brain.  If you decide you are never going to have sex - as some celibates claim - you are declaring nuclear war on your brain. 

But the brain always wins.

The list of evangelical pastors who have fallen from grace is endless. The loudest voices seem to fall the furthest - Jimmy Swaggert, and Jim Bakker come to mind - once at the helm of billion-dollar televangelist empires, they were caught with their pants down, literally. UPDATE:  Since I started writing this draft, many years ago, more evangelicals have fallen from grace - it is like snow falling from heaven!  Jerry Falwell, Jr. is the latest example of this hypocrisy.  And yet, evangelicals are louder and more obnoxious than ever!

The latest victim, so to speak, of their own malfeasance, is a fellow who wrote a book - several books - about relationships, and preached intolerance from the pulpit.  Of course, he finally snapped and left the church, his marriage and ended up leading a gay pride parade in Washington State.  He claims to have renounced Christianity, which is just stupid, as it implies that gays can't be Christian (and oddly enough, intolerant people who call themselves Christian applaud his renunciation, as they claim you can be one or the other, but not both.  Of course, they are neither - well, one maybe, but not Christian).

What is up with that?  As I noted before, (closeted) gays make the best Nazis.  Those snazzy uniforms!  The peaked caps!  All that leather.   Ernst Rolm was the original Nazi, and was a queer as fuck. Of course, Hitler shot him.  These sorts of movements make use of the closeted gays and their nervous energy, and then dispose of them later on.   Just a warning to any of you want to join a revolution.

But why does this keep happening and why don't people learn from it?  When I moved to Washington, DC, my office was around the corner from "The Chesapeake House" - a dingy male strip club, long-ago closed, where skinny meth-addicted boys from West Virginia danced on the bar in g-strings.  Years before, a staunch Republican Congressman used to park his Grand Marquis out front, with its "Member of Congress" licence plates (so he wouldn't get towed!) while he paid rent boys inside for lap dances and later, took them home.

Of course, he resigned in disgrace, and some on the far-right blame Jimmy Carter for "outing" him in retaliation for his opposition to much of Carter's legislative agenda (like deregulation, which Reagan took credit for).

And who can forget the "Wide Stance" Republican Congressman from  Minnesota - soliciting sex in an airport restroom?  And let's not forget about "Lady G" - the "confirmed bachelor" who "never had time for a wife" - Lindsey Graham.

The list goes on and on.  And every day, a new name is added to the list.  Conservative Christians, who have very short attention spans, will say, "Well those are aberrations!" and forget about the hundreds, if not thousands of "aberrations" that came before.  It is safe to say, I think, that any conservative politicians or religious leader who rails against homosexuality is likely a closet case themselves, and will be outed in short order.  It is a tale as old as time - they really think that by being virulently anti-gay, that no one will suspect them.

Maybe someday, mankind will move beyond the slap-and-tickle thinking about sex, and move beyond the junior high-school giggling mentality as well.  Maybe they will be able to accept themselves for who they are, and divorce "conservative" thinking from issues of sexuality.

Maybe, but I doubt it.  Because as I have noted before, denying people their own basic instincts is the easiest way to control people.  It is no accident that every major religion tells people to "go forth and multiply" but at the same time, tell them they are worthless pieces of shit for actually enjoying sex.  Once you get people to believe that, you can get them to literally sacrifice their own lives, to your advantage.

Which is why I say, the only religion I would join would be the one where I was the Pope or Head Thetan or whatever.  Why be a plebe when you can run the show?

That's how this works.

***

Saturday, September 16, 2023

Gift Cards Suck


Gift cards are a great deal for merchants, a shitty deal for consumers.

I wrote about gift cards before.  They are a crappy deal, and like a hot potato, you should get rid of them as soon as you get one - spend it quickly.  Merchants count on you losing or forgetting about a gift card and a surprising number of them are never spent.  This is free money for the merchants.  It explains why some merchants sell gift cards for below cost, which makes no sense on its face.  But if 20% of gift cards are never spent, you can afford to sell a $25 gift card for $22.50 and still make money.

And yes, some wily folks have figured this out and bought gift cards for below face-value and ended up with a 5-10% effective discount.  Don't expect that to last!

I recounted before how I found several in a drawer somewhere that Mr. See had accumulated as gifts from friends.   When I asked him why these were tucked away, he replied that he was saving them "for special" - some ill-defined occasion when it would be appropriate to use the gift card.  That occasion, being so poorly defined, of course, never occurred.

So I forced him to go out and use the damn things, before they expired or were lost.  In some instances, these sort of things can expire, particularly "gift certificates" from restaurants or local merchants.   According to some sources, a 2009 law prevents gift cards from expiring - for five years.  But some gift card companies can charge "dormancy fees" if a gift card is not used - effectively draining away the balance over time, much as banks do with dormant bank accounts.

Again, this is free money for the gift card issuer.  Note that some States have laws that prevent gift cards from expiring, and also outlawing dormancy fees.  This does not mean a gift card is a good place to stash money.

Gift cards suck for a number of other reasons, though.

To begin with, they promote consumption. You get a gift card for $25 at your favorite restaurant (or even your least favorite restaurant), you are going to go to that restaurant and spend the card - and likely some additional cash. So the card acts as an incentive to spend, which is sort of a reverse gift.  $25 in cash can be put into the bank, if you so desire.   You need not consume it.

Compounding this is they are not easy to use.  I received a rebate from Home Depot for buying paint.  It was a $150 gift card, in this case, a debit card (which are slightly different).  In order to spend it, I had to apply the balance to another purchase at Home Depot, and this required that I know the balance on the card which required that I call in and make a balance inquiry and then enter the exact amount to be debited from the card.   I would have preferred to have just $150 off the original purchase, but again, they are hoping you don't spend all the money or just forget about the rebate.  Rebates, like gift cards, suck.

But beyond that, gift cards have acquired an odious reputation as a means of banking the unbanked, and as a party in frauds. For the very poor, gift cards are a way of paying bills and making purchases, when they don't have a bank account or a good credit rating. You can use a gift card like a credit card, in some cases, but there are often fees involved for purchasing the card, as well as for checking the balance, receiving cash from an ATM and other services. It may be convenient for the poor, but convenience comes at a cost.

In a plethora of Internet scams, such as the "IRS Tax Audit" scam, elderly people are exhorted to obtain gift cards and then send the numbers on the card - along with the scratch-off PIN number on the back - to someone overseas.   Once they have these numbers, they can cash in the value of the card at a local ATM, and it cannot be traced or recovered, ever.

Gift cards have replaced Western Union as the medium of exchange in scams, and arguably are easier to use, less costly and harder to trace than even Bitcoin.

Another scam - which is becoming less common - is where scammers pick up a gift card at a store and then go to the restroom to write down the numbers from the card - and scratch off the cover for the PIN number and write that down.  They then return the card to the rack and leave the store.  An unwitting shopper then "buys" the gift card and charges it with money.  Before they can even get home, the scammer has drained the card of cash value, as they have the card number and PIN.   Changes in packaging have alleviated this problem somewhat.  But if you buy a gift card that is laying out on a rack, be sure the PIN number was not exposed via the scratch-off cover.  If it was, the card is worthless - to you, anyway.

Since these things are involved in so many scams (just like Western Union) and they favor the merchants more than the consumer, the best bet is just to avoid them entirely.  When someone gives me a gift card or a gift certificate, figure out how to use it as quickly as possible.   Putting it "in a drawer, somewhere" until you decide the perfect moment to use it, is probably the worst idea.

And while your intentions may be good, perhaps avoid giving gift cards as gifts.  It is a left-handed gift, as the recipient now has to make the effort to spend it.  But moreover, maybe if people stopped using these cards entirely, they might eventually go away.

Let's hope!