Spending money is not wealth!
I saw this recent video online about how Goldman Sachs stepped in the dogshit, trying to expand into retail banking by partnering with Apple to provide the new "AppleCard" credit card. Here I was, thinking "AppleCard" was a piece of hardware you put into an expansion slot in your Mac. How times have changed. Expansion slot - OK, Boomer!
What struck me dumb, though was 6:48 into the video - where it was revealed that the "charge-off rate" of AppleCard users was twice that of the industry norm. Wait. What? Apple users are supposed to be sophisticated rich people who can afford all the luxury items, such as a cell phone that costs ten times as much as an ordinary one - or a laptop that costs thousands, instead of hundreds. Surely they all drive Maserati's and have buckets of cash laying around. Why would they be twice as likely to be delinquent on their credit card payments?
I searched online, and yes, it is true, the average income of an Apple user is higher than that of an Android user. Funny thing, though, the statistics from 2014 show all of us making substantially more money back then than we do in 2018. Maybe these statistics are inaccurate? Perhaps they were based on surveys? Maybe Apple people are more likely to lie about their income? Who knows.
But another article drives home the point - Apple users are more likely to spend more money on technology, which is sort of self-evident when you realize how overpriced an Apple phone or Apple computer is, compared to the competition. It is like saying a BMW owner spends more on cars than a Toyota owner. He has to - they cost more!
That doesn't mean, however, he has greater wealth, just a more expensive lifestyle. It is like my friends in the big city we left behind. Sure, they are making six-figure salaries, but blowing it just as fast on mortgages on mini-mansions, leased cars, delivery foods, private schools, all the cable channels, and of course, Apple phones for everyone in the house. When the credit cards are maxed out, they take out a home equity loan to pay them off. "I'll never retire!" they say. They can't afford to.
So "income" and "spending" are one thing, but unless your spending is less than your income, you can't accumulate wealth.
Apple used to make a basic PC in the days before the IBM-PC came out. Once the IBM-PC became the default PC, well, Apple had to innovate. So they took the technology from Xerox PARC and came up with the Mac - complete with a mouse and graphical user interface. Thanks, Xerox! But it was a weird little thing with a tiny, monochrome screen, marketed as a tool for artists and college kids. "A computer for the rest of us!" they crowed, because learning the arcane commands of DOS was too hard for most people.
And that has been their battle plan since then - to make computers and later on, smart phones, more "intuitive" and easier to use. For some of us, this is a mixed bag. Apple has one button instead of three, so you have to get used to not having that handy "back" button to take you back to where you came from. And most of the configuration utilities on a Mac are hidden from view (Sadly, Windows has gone in this direction as well) so you no longer feel you have control over what is on your computer or your phone.
The "rest of us" translates to "clueless idiots who don't know their ass from a hole in the ground." Imagine a car company advertising that way - "the car for those of us who are really shitty drivers and have no clue how any of it actually works." Actually, that would sell a lot of cars these days. Ignorance is indeed bliss, for a lot of people.
But what is also interesting is that according to one of the "survey" articles above, Apple users spend more time on their phones and download more apps as well. Android users have a life, instead. I think that is a better deal. So there is the profile of the Apple user - working at an overpaid job with a lot of time on their hands to play Farmville or whatever, blowing every last dollar on status items.
Ah, yes, status. Apple made big news when they changed their chat feature so that any message from anyone chatting from an Android phone would appear in a green "bubble" as opposed to the blue, and apparently pixellated as well. The subliminal message sent to Apple users is "this is how it looks on an Android - ugh!" when in fact, Apple was just degrading the images to make Android look bad.
Worse yet, superficial people on the dating scene would reject suitors based on these green bubbles. Quite frankly, this is probably a good thing. If your potential mate is so shallow and materialistic to judge you based on the brand-names of products you buy, chances are, you will end up divorced in short order, as the relationship becomes a race to the bottom - to see who can accumulate the most consumer goods in the least amount of time. This is the shallow end of the gene pool. Avoid at all costs.
So why are AppleCard users defaulting on their credit cards at twice the rate as ordinary credit card users? I speculate it is because they are juggling their finances - money going in and money going out - to the point where one hiccup upsets the whole apple cart (pardon the pun).
I speculate also that many Apple users are quite poor. Status items are, ironically, less popular in rich communities than poor ones. The poor and lower classes crave the symbols of status more than the upper classes do. If you are filthy rich, chances are, you don't need to show other people that. Your demeanor and home address tell that tale. In fact, you probably want to hide the fact you are wealthy, as people will target you if they think you have lots of money. The lower classes, on the other hand, desperately want others to think they are rich.
Around the local Walmart "Ghetto Gourmet" (Neighborhood Market) is a ring of stores catering to the poor. They are selling renting bling rims for your car, selling or even leasing sketchy used cars for people with bad credit, renting-to-own furniture (for 4x the cost of buying) and of course, offering payday loans and title pawn loans so you can have it all now and pay for it later. People, particularly poor people, crave status items, and they would rather have a shiny new set of particle board furniture than save up for a few months and buy one piece at a time. I've slept on the floor more than once in my life - in fact, fairly recently. Others are less willing to make sacrifices.
So you can sell more $300 sneakers in the ghetto than in The Villages, because the ghetto kids crave the status of having the "right" sneaker. Lower class people will actually collect sneakers like lower class people used to collect beanie babies - convinced that real wealth lies in junk you own, and not in money in the bank. Appearances trump substance.
Granted, there are the nouveau riche who flaunt wealth, which again, they may not actually have. Instead, they have income and spending - neither of which is real wealth. But you see this all the time - middle-class people talk about wealth in terms of how much they make per year or how much they are approved to borrow. Few talk about seven-figure balances in their investment accounts.
In terms of personal bling, the iPhone fits right in. If you buy a case for your iPhone, there is an apple-shaped hole in it, so people can see the almighty Apple logo on your way out of Starbucks, holding your coffee-drink high, elbow up, cup logo facing out. You don't want people to think you are some dweeb who makes his own coffee, doya?
I suspect that explains the high default rate. Because while many Apple users might have a higher income (if surveys are to be trusted) many others are dirt poor, at least from what I am seeing at the local Walmart. And such folks have a credit score that is an irrational number. It is no wonder they would be deliquent on an Apple Card - and no wonder they would actually want one.
Of course, the story of the Apple Card is more complicated than that. Deliquency is just one aspect, although an interesting commentary on Apple users. Apple screwed over Goldman Sachs on the deal - and Goldman - so eager to get into retail banking - ignored the warning signs, such as two other banks walking away saying, "Uh, no thanks, Apple!" Apple felt, apparently, that their shit didn't stink and they could dictate terms to banks - and did. It is sort of like how Apple skims user fees in the Apple Store, much to the chagrin of Mr.. Musk.
I guess that is the other reason I am not an Apple fan. Any company that acts like they are doing you a favor by allowing you to buy things from them is just a raw deal. But you'd be surprised how many companies do this - particularly many luxury brands. Some high-end handbag makers won't let you just waltz in and buy a $30,000 handbag. No, no, you have to start out with a "starter" bag first, and work your way up the scale. Jay Leno said in one of his YouTube videos, that he never got into Ferrari, as he went to the dealer and they told him he would have to buy a "starter" Ferrari and work his way up, before they would let him buy the top model. Lamborghini had no such qualms, however. They wouldn't sell a Ferrari to freaking Jay Leno. That tells you more about what the cars are really about - status, not performance.
And status is an idiotic way to drain your bank account!