Anatomy of a Bad Deal

Deals like this are how the middle-class gets into trouble.

I was reading the Good Sam catalog the other day, and saw this deal proffered for a low-end Class-C motorhome.   I nearly fell out of my seat.

To begin with, there was a mountain of fine print under the deal - that things like shipping, taxes, and the like were not included.  So getting the $49,995 price (let's just call it $50,000, OK?) was probably not in the cards.

But even assuming it was, well, with a 240 month loan (that's TWENTY YEARS, folks!) the purchaser would surely be upside-down for most of the loan.   And the vehicle would likely not outlast the loan.

This handy loan balance calculator tells the sorry tale of this bad deal:

Year	Beginning Balance	Interest	Payment	Ending Balance
1	$45,041	$2,217	$3,564	$43,694
2	43,694	2,148	3,564	42,278
3	42,278	2,076	3,564	40,790
4	40,790	2,000	3,564	39,226
5	39,226	1,920	3,564	37,582
6	37,582	1,836	3,564	35,854
7	35,854	1,748	3,564	34,038
8	34,038	1,655	3,564	32,129
9	32,129	1,558	3,564	30,123
10	30,123	1,455	3,564	28,014
11	28,014	1,348	3,564	25,798
12	25,798	1,235	3,564	23,469
13	23,469	1,116	3,564	21,020
14	21,020	991	3,564	18,447
15	18,447	859	3,564	15,742
16	15,742	721	3,564	12,899
17	12,899	576	3,564	9,911
18	9,911	423	3,564	6,770
19	6,770	263	3,564	3,470
20	3,470	94	3,564	0

As you can see, this is a classic case of the loan balance chasing depreciation, and the depreciation winning.  As I noted in my Upside Down Boat posting, motorized vehicles like this depreciate about 50% every five years.   After five years, this motorhome may be worth $25,000, whereas the loan balance is still over $37,000.   After ten years, the motorhome is worth maybe $12,500, whereas the loan balance is now more than double that.   After fifteen years, even, the motorhome is worth, on a good day, $7000 and the loan balance is still more than double that.   It is only in the last few years of the loan that the owner can possibly hope to sell the motorhome for more money (or at least as much as) is owed on the loan.

And in the interim, the options for the owner are not many.

This graph (click to enlarge) shows how much interest you will pay over time.

For a wealthier person, this is not an issue.  They just pay cash for the motorhome, or put more of a down payment on it, so that the loan balance is always ahead of depreciation.   But for the "monthly payment" mentality type of person, well, such deals are attractive, as they look only at the monthly payment, and nothing else.

How do I know that the coach will depreciate faster than the loan?   Well, I have owned a motorhome almost just like it.  The original owner paid $40,000 for it, and five years later, we paid $22,000, or about 50% of its purchase price, new.  It had only 25,000 miles on it, which is not atypical for a motorhome.

After five years of owning it, we sold it for $11,000, or about half what we paid for it.  And over time, it started to leak and delaminate.   The rubber roof needed work, and the bathroom needed a complete overhaul (which we did).   I had to replace the generator as well.  It cost a lot of money to maintain, and it was not very well made.   That is the dirty little secret of the RV business - these things are stapled together with sticks of wood, and they look nice when new, but quickly fall apart over time.

And 20 years?   For a typical motorhome, that is about the entire design life and then some.   By the ten year mark, many motorhomes are starting to look a little tired.  By the 15 year mark, they are pretty much worn out.   By 20?  They are ready for the junkyard.

Think about it for a second - would you buy a car on a 20-year note?   What makes you think a motorhome will outlast a car?   It simply won't.

Note also how much interest the buyer pays - over $25,000 over the life of the loan, or about 50% of the purchase price.

So, what happens to people who make deals like this?   Well, theoretically maybe one or two make out OK, provided they put the motorhome in a garage or barn when not in use (and not a barn with barn swallows pooping all over it or anything) and keep it in pristine condition and use it every year and enjoy it.   Even then, they are paying a lot of money (more than $3500!) to go on vacation every year.

Or, if they have money, they can sell it when they get bored with it - and pay the difference between the sale price and the loan from their savings.   Sadly, most people who bite on deals like this don't have $10,000 to $20,000 laying around to pay off upside-down loans.

And the more you actually use the RV, the worse it gets, in terms of depreciation.

For the rest of them, well, the motorhome sits in the side yard, degrading.  They lose interest in RVing, particularly after it breaks down.   Since they are "stuck" with the unit, they just let it sit in the yard for 20 years and pay off the loan.    Or their children sell it when they die.   And you might think this sounds absurd, but there are moldering RVs in people's backyards across America, simply because of deals like this.   My neighbor in Virginia had one - covered with algae and mildew and slowly sinking into the lawn - for over a decade.

Or you can let the unit be repossessed.  However, that still leaves you on the hook for the balance on the loan (minus what the unit sells for at auction).  Bankruptcy is the only way out of that mess. 

How do you avoid a deal like this?   Make a bigger down payment.   Go to a shorter loan term.   Buy a used unit and pay cash.  Buy a trailer and tow it with your SUV or truck.  Trailers are much cheaper to buy and depreciate more slowly than a motorized RV.

While loan companies may offer you deals like the one above, you don't have to take them.   And just because they offer you a deal like this, doesn't mean it is a good deal or that you can afford it.  The name of the game today is not to offer sound deals to people, but rather to set up deals that intentionally ruin folks over time.

Sadly, many people end up with worse deals than this, as they don't qualify for the 4.99% interest rate, because their credit is already bad - having bitten on bad deals in the past.   So they end up paying even more in interest and end up upside down in an even worse way.

It is sad to me that after the excesses of the 2000's - where banks loaned money to people knowing they could not pay it back, we are right back where we started.   And it seems no one has learned anything!

Free Bandwidth?

When any commodity is "Free" or un-metered, demand will increase dramatically.

In the earlier days of the Internet, bandwidth was not metered very much.   You paid for an Internet connection and could upload and download pretty much as fast as your 56K modem would allow you to.

But since then, connection speeds have increased, and as a result, people are uploading and downloading more data.   Instead of simple ASCII pages, we send HTML.   And today, increasingly, audio and video.   We download entire movies.

WiFi illustrates the problem aptly.   People are so used to getting "free" WiFi, and increasingly, many businesses are reining it in.   Why?  Because it costs money to provide this "free" connection, and when more and more people start using more and more bandwidth, the system bogs down or crashes, which means more labor costs to reset routers or more material or service costs to provide more routers and higher bandwidth connections.

When something is free - or very low priced - an economy can develop that is based on this low-cost or free commodity.    In the 1960's, American car makers developed cars getting less than 10 miles per gallon.   No one cared, as gas was only 25 cents a gallon.   When gas prices doubled and gas stations ran out, only then did people panic.   Suddenly, a commodity that was dirt cheap became dear.

All energy was the same way back then.   Atomic energy would be "too cheap to meter" and cheap electricity encouraged people to do dumb things like heat their homes with resistive heating elements.   The "all electric home" was touted as the wave of the future - glass boxes with little or no insulation.   Cold?  Just turn up the thermostat!

All that came crashing down with the energy crises of the 1970's, of course.   And in terms of data, we are heading the same way.

On the "Information Superhighway" we are all driving the equivalent of an 8-mpg mid-1970's pimp barge.    Ugly and ostentatious, and slathered with unnecessary doo-dads, those automotive eyesores were inefficient, ugly, and guzzled gas.

Our internet is the same way - and our computers.   In the old days, you could store data in ASCII format, with eight bits per character.   Word processing programs like WordPerfect added formatting codes, which increased file sizes somewhat - but still kept them down to kilobytes.   Microsoft Word, on the other hand, can't seem to store even a blank document in anything less than a megabyte, as everything has "metadata" and formatting codes for everything from font size and color to page formatting and backgrounds.

The Internet has the same problem.   On old ASCII newsgroups, we typed in postings in ASCII which used 8 bits per character.   Today, we have HTML websites which are embedded with lines and lines of formatting codes as well as java scripts and embedded flash animation, videos, and the like.

Logging onto the bank website requires that you download a ton of data, just to ask for a few numbers (your bank balance and checks cleared).   Since we have more bandwidth, and bandwidth is free, most of us don't notice this and don't complain - until we are forced into a slow-bandwidth connection like an overwhelmed router at the coffee shop.

Now bear in mind that when I say "Bandwidth" there are two definitions that come to mind.  The first is the speed at which you access the Internet.  Already, most ISPs are charging by speed, charging people more if they want top speeds, and less if they only need to access e-mail.    This is one technique that is used to "ration" people from over-using their connection.

A second is download and upload limits - where you are charged an extra fee if your downloads or uploads exceed a certain limit every month, usually measured in Gigabytes.    So far, these have proven very unpopular and hard to implement.    But they are becoming more prevalent and the ISPs are threatening to enforce these limits soon, unless some agreement can be reached.  Cell phone providers are already there, for the most part.

Netflix and video streaming are set to break the back of the Internet.   And Internet service providers are finally saying that "too cheap to meter" is not a viable business proposition.   Netflix alone accounts for the lion's share of internet traffic - just as that French Canadian who is Skyping at the coffee shop is the one hogging all the bandwidth there.

Being charged by the Megabyte or Gigabyte will become the norm, not the exception, in coming years.   Already, phone companies (whose bandwidth is limited even further) are reining in "unlimited bandwidth" contracts, or making them more expensive.  The trend is toward metering, and it is a trend that most of us are dreading.

The party is over.   It was quite a ride.

Even assuming that the ISPs can come up with a deal with Netflix, and improved infrastructure, the problem won't go away.    So long as bandwidth is "free" people will use it like water, and leave the faucet on for hours at a time.   Think about it, if electricity was "free" you've never turn off your lights, and your house would be toasty warm in the winter and ice cold in the summer.   It is human nature to not conserve when there are no consequences.

So long as bandwidth is free, we will continue to squander it, in new and more wasteful ways.  It is not a matter of if something will happen, but when.

In the city of Atlanta, during the drought, no one conserved water when the implementation mechanism was public service announcements.   When people started getting fined for watering their lawns or washing cars, people cut back.   When they got $3000 water bills, they cut way back.   It is human nature - we don't act until it actually costs us.

Now imagine that there was a bandwidth shortage on the Internet, what will happen?

Will we start rationing our use?  Or looking for more "efficient" websites that don't squander bandwidth with unnecessary flash animation, videos, and other HTML crappy junk that doesn't add to the user experience?

I hope so.  Because frankly, we need to start being more efficient in our coding.   For too long, bandwidth has been free, and we've become lazy and complacent.

Church Bling

Church Bling is nothing new.

Recent reports about the excesses in the Catholic Church are giving many pause.  The Archbishop of Atlanta built a $2.2 million home in Buckhead, using money earmarked for "Charity".   But no one can top the fellow above (in a vintage BMW 328 roadster) who spent a whopping $42 Million remodeling his house and "offices".

People are acting all appalled, but when you think about it, Church Bling is nothing new.   And one could argue that without Church Bling, some of the greatest works of art of all time, including the Sistine Chapel, would never have been created.

But arguably, art and cathedrals are public works, available for everyone to view, and thus are for a greater good - not for private use.

On the other hand, excessive salaries, elaborate homes, private jets, and the like, seem somewhat inappropriate for a "Man of God" who claims to be the "Shepard of his Flock".   Yet many churches have been doing this for years - particularly the evangelical type.  Remember Jim and Tammy Faye?

But Church Bling exists on a smaller scale as well.   Here on the island, we have a number of churches, and most of them own a home as well, which ostensibly was for the pastor to live in.   As most of the churches have tiny congregations (a few dozen, at best) most have moved to a part-time pastors.   But the houses remain.

Some, no doubt, were donated to the church by congregants, in their wills.   What does a church want with a house that is not used?   Well, some, like the Methodists, are pragmatic, and rent out the house and then use the money for the church - to help pay the light bill or whatever.   This seems like a logical idea.   Selling the house would be another - and using the money to improve the church.

Others, like the Baptists, decided to keep their house as a private clubhouse for a weekly party - er, I mean, prayer meeting, which for some reason, cannot be held at the church or in the meeting hall attached to the church (isn't that what a meeting hall is for?).  They pay insurance, utilities and maintenance on a separate home, just to use as a once-a-week meeting place, in addition to the church itself.

So, a $400,000 asset, which is now tax-free, sits vacant for six days a week, and on Saturday, they all park on the lawn and have a little get-together until late at night.   Because that's what a church is all about, right?   Having a private little club that you can get together with, with your friends.

Others have this weird idea that a church should be all about God.  Or maybe helping the poor, or maybe spreading the word of Christ.  For others, it's board games and refreshments.  They also serve the Lord, who play Parcheesi.

One of these "church ladies" came to our garage sale.  The "church clubhouse" is only two doors down from us.   She mentioned she was with the church and that they held their weekly "meetings" there on Saturday night.  "I just wanted you to know we're here," she said, in somewhat ominous tones.  Sort of a "watch your shit, buddy, we're keeping an eye on you!" kind of statement.

But sadly, that sort of attitude reflects how most people view their religions - as a private club that only they can join, because they have the inside track to God, and God likes them best!

This is why, for example, many churches are not evangelical, as they really don't want new members, but prefer to isolate themselves in a contained social group.   New members would threaten the social structure of an existing church.   You know, people like Edna, who would come in with all her wacky new ideas which would need to be shouted down.

And that is why church attendance is down for most major religions.   People just don't want to go anymore, and when they do go, they don't feel welcome.   "This is our private little God club" the members say, "Go away!"

And increasingly, people question what they are giving their money to.   When a Bishop spends $42 million sprucing up the house, you have to ask yourself, when you can barely make your mortgage payment, whether you should "tithe" 10% to the church.

The new modern Mega-Churches at least spend their money (most of the time) on infrastructure that serves the congregation.   These Mega-Churches and their attendant bookstores, coffeehouses, meeting rooms, and the like, provide things like day care, AAA meetings, counseling, and activities for parishioners, in addition to church services.

But you have to wonder, is building a $20 million church to do this, really serving God, or just creating a really cool clubhouse for the faithful?

God doesn't want your money, that's for sure.  He can't spend it.   I suppose he appreciates a fancy cathedral or some really amazing church art.   But private clubhouses for the elite?   Probably a bad idea.

Are Intruders or Home Invasion that Likely?

Many folks argue that having a handgun in the house "for protection" is a good idea, as you can "protect yourself" from an intruder or a home invasion.   Is this a likely scenario or not?

When I was a kid my Dad had a handgun.  My parents, both being alcoholics, decided to get rid of the gun.  This was a good thing, as my Mother started to lose her mind eventually, and tried to attack my Father with knives, leaving a kitchen knife embedded in the bathroom or bedroom door on more than one occasion.

 

That's one problem with owning a handgun - or any weapon.   If you are mentally imbalanced even in the slightest amount, very tragic things can happen.   And even if you believe yourself to be well-adjusted, even a momentary lapse in judgement, an argument, drinking, prescription medication, drugs, or depression can push you over the edge.   Having a gun around the house is nothing to take lightly.

Once Dad got rid of the gun, he kept a baseball bat by the bed (I have since discovered that many Dads do this) for "protection."   It is interesting that he had this anxiety about being violated.  Well, he was from Jersey.  Maybe that explains it.

And after 70 years of not-being-home-invaded, one night, someone did break in.    Well, they came in through an unlocked door.   But the person wasn't an invader, but rather a drunken fisherman who grounded his boat at their dock, mistaking their Christmas tree for the navigation lights of St. Michael's Maryland.   Wading ashore in the cold weather, he saw the house with a fire in the fireplace, and went inside to get warm, and passed out on the couch.

Fortunately, my Dad did not bludgeon him to death with the baseball bat.   Fortunately, he did not shoot him, either.

So, over a 90-year life, the "home intruder" situation came into play only once, and that wasn't a violent intruder, but rather a lost drunk.   The latter scenario plays out more often than you think.  Here on retirement island, all the homes look alike, and on more than one occasion, a senile senior has gone into the wrong house (it happened to us, when a neighbor from two doors down walked in the front door and exclaimed, "This isn't my house!" and left.   I am not making this up!).  No one has been shot - yet.

But sadly, people do get shot when this sort of thing happens - Japanese exchange students, for example, trying to find a Halloween party.

For me, I have had several situations where I have woken up at night and momentarily not realized where I was.   For example, in a darkened hotel room or on a moonless night.   When you are tired and groggy, you don't remember where you are or what is going on.   I literally have walked into walls this way.

To me, it seems a no-brainer that under such circumstances that it would be very easy to shoot someone or yourself, by accident, in the middle of the night, when it is dark and you are half-asleep.   And of course, that is exactly what happens, a lot, in this country.

Reliable statistics about real home invasions or intruders are hard to come by, as everyone has a dog in this fight.   The firearms industry relies upon anecdotal evidence (various incidents) to back up its claims.  These are very emotionally-based arguments, as you can use some horrific incident to show that "thanks to having a gun" the homeowner was saved.

People selling home security systems, of course, like to tout scary stastics like this one:

Today’s Statistics
Because home invasions are typically filed as a robbery, burglary, battery, assault, rape, or murder, keeping the public informed of the frequency of home invasions within their communities is difficult. However, thanks to data gathered by the FBI and Statistics USA, we’re able to get a better idea of the prevalence of this sinister crime:

• Home burglaries occur approximately every 15 seconds in the U.S.
• Most home intruders force their way into homes through the front door. 
• In the U.S. alone, 1 out of every 5 homes will be victimized by a violent home invasion or burglary.

Note how they lump "Burglary" (which is a break-in when you are not home) with Robbery (which is when you are) to make the "1 in 5" statistic.   And this "1 in 5" statistic is meaningless without knowing the timeline.    One in five homes is broken into every year?  Or during the life of the homeowner?  Or the life of the home?   It is not clear - perhaps by design.

Perhaps the Bureau of Specious Statistics is again at work here - sort of like the alarming statistic that One in Four Women will be raped during their lifetime, which is true, only if you redefine rape to mean any unwanted sexual advance or having had sex after taking alcohol or drugs provided by a man.

And these "statistics" of course, negate free choice.   If you live in a safer neighborhood, the odds of being victimized by crime are far less.   When you average in crime rates from Baltimore and Oakland, well, it might make suburban America look pretty dangerous.

On the other side of the debate are people who want to restrict firearm ownership.   They will point out that a gun in the home is 22 times more likely to injure its owner or a innocent person, than to stop an intruder.

But at least these proponents are using cited statistics from law enforcement agencies.   And sadly, it seems that gun deaths and injuries are on the rise.   By 2015, gun deaths will exceed traffic fatalities, which is a reflection of how much safer our cars are, as well as how many more guns we have in this country.

And once in a while, you do find a site that tries to post some neutral data from the FBI and other sources.  And one statistic that is not challenged by anyone in this debate is that crime in general and violent crime in particular, has been on the decline for nearly two decades now.

There are  many explanations for this trend, and it is unclear which one is correct - if not all of them.   We are an aging country, and older people are less inclined to commit crimes.   We are a more prosperous country, so people have less incentive to steal.   We incarcerate more people than any other country in the world, except China, so the "bad guys" are locked up.   It likely is a combination of all three.   I doubt, however, that increased gun ownership is the reason.

Of course, that raises the question, if crime is on the decrease and gun ownership is on the increase, then does the connection between the availability of firearms and crime really exist?   One blogger thinks the connection is overstated, and he does make some good points.  For example, while our gun suicide rate is the highest in the world, other countries have higher overall suicide rates, as I recently noted.

Like I said, trying to find information that is not slanted, based on the writer's perspective, when it comes to guns and crime, is hard to do.   This ASCII-text report from 2010 illustrates part of the problem, in that how crimes are reported can skew the statistics.   For example, previously, Burglary was reported as a break-in where no one was home.  For the 2010 report, they count any break-in as "Burglary" and then break out whether a household member was present at the time:

Highlights

*An estimated 3.7 million burglaries occurred each year on
average from 2003 to 2007. 

*A household member was present in roughly 1 million burglaries
and became victims of violent crimes in 266,560 burglaries. 

*Simple assault (15%) was the most common form of violence when
a resident was home and violence occurred. Robbery (7%) and
rape (3%) were less likely to occur when a household member was
present and violence occurred.

*Offenders were known to their victims in 65% of violent
burglaries; offenders were strangers in 28%. 

*Overall, 61% of offenders were unarmed when violence occurred
during a burglary while a resident was present. About 12% of
all households violently burglarized while someone was home
faced an offender armed with a firearm.

*Households residing in single family units and higher density
structures of 10 or more units were least likely to be
burglarized (8 per 1,000 households) while a household member
was present.

*Serious injury accounted for 9% and minor injury accounted for
36% of injuries sustained by household members who were home
and experienced violence during a completed burglary.

Read those numbers carefully.   In only 1 out of 4 "Burglaries" was someone home.   Professional burglars (who want to steal things, not assault people) don't enter your home at night, as that is the riskiest time to do so.   Even if the homeowner is unarmed, there is likely to be an altercation, or the homeowner can summon the Police, leaving the burglar less time to steal.  So most burglaries occur when you are not at home.

A far more likely scenario is that the burglar will enter the home, often in broad daylight, by posing as a repairman.  Often, these burglars back a truck right up to the home and empty it of its contents, as recently happened on a neighboring island, where intermittently-occupied vacation homes are a favorite target.  But even active suburbs are easy prey, where neighbors do not know one another, and everyone in the development is off to work every day.

Note how in many cases, the burglar was known to the homeowner.   A friend in Florida was recently burglarized when she went off for dialysis treatment.   She made an offhand comment to the pool cleaner or the yard man about what days she was home, and since dialysis takes several hours, the burglars had plenty of time to break in and steal her jewelry.  Who did it?   We may never know for sure.   But it is highly likely one of these maintenance people told a friend about it (perhaps even selling the information or taking a percentage of the proceeds).

When we lived in Alexandria, Virginia, there was a rash of "home invasions".  Was I worried?  Not really.   You see, the homes invaded belonged to Asians who ran cash-businesses (convenience stores, etc.) and they kept large amounts of cash, gold, and jewelry at home, most likely because they were not declaring all of their income.   Asian gangs knew of this, and would invade the home, hold people hostage, and steal tens of thousands of dollars in cash.

If they invaded my home, I could only hope they take a check.   But again, you see a statistic here that applies to a narrow social group.   People who live on the shady side of the law (unreported income) are targets for crime.   Mr. and Mrs. Middle-Class, who have everything in a mutual fund account, really can't be "robbed" of much, can they?

But getting back to violent crime, of the 1 million homes Burglarized while someone was present, only a quarter of those resulted in a violent confrontation.   And in 65% of those cases, the homeowner knew the person in question.   And in 61% of those cases, the perpetrator was unarmed.

So, what does this mean, in terms of your own life?    Well, if people you know are burglarizing your home, maybe you need to know different people.   And what this statistic suggests to me is that a lot of these crimes are being committed in the slums, ghettos, and trailer parks of America, where people who live on the shady side of the law (drug users, drug dealers, etc.) are broken into, as their "friends" stop by to steal some shit.   Unless you are this sort of person, these statistics probably don't apply to you.

The rate of burglary in this country (4 million burglaries in a nation of 300 million people) certainly doesn't support the alarm company's "One in Five" statistic, unless you count this over a decade or a lifetime - or if the average household in America has 100 people in it.  Clearly, the alarm company people are exaggerating things.   Act shocked.   Historically, some alarm companies have been known to hire people to burglarize homes in order to come back the next week and "close the sale" for an alarm system.  Alarm companies use fear to sell alarm systems.   I would not rely on them for critical data.

But, what about the lady in Georgia, who shot the intruder five times in the face before he drove away?   Ahhh, there's the conundrum!  There is always some anecdotal evidence where "but for having a gun" a homeowner may have been victimized.

Or maybe not.   In the scenario described in the article, the burglar banged on the door and rang the doorbell, before breaking in with a crowbar.   He then ransacked the house, in a hurry, trying to find valuables.   It is not clear from the article, but I suspect that when he rang the bell and pounded on the door and no one answered, he may have assumed the home was empty.   We will never know if he would have merely fled, once he knew someone was home, or would have raped the homeowner.

So what conclusions can you draw from all of this data?

Well, I come to these:

1.  Crime is not as prevalent in America as the News Media and Crime Shows suggest.   The odds of being victimized by crime are very low.  And all agree that crime rates have dropped dramatically in the last 25 years.

2.  If you are a middle-class American living in a decent neighborhood, the odds drop even more dramatically.   Statistics average together people in high-crime areas with low-crime areas.   If you are not a drug dealer or a drug user, you don't live in a slum, ghetto, or trailer park, the odds of being a victim of crime diminish rapidly.

3.  A gun could protect you from an "intruder" but such a situation is a far-fetched scenario.   You are far more likely to injure yourself or a family member than to "stop a crime".

4.  If you decide to get a gun, learn how to use it and safely store it.   Leaving loaded firearms in drawers is never a good idea.   They do make rapid-response gun safes that can be opened quickly in case of emergency.

5.  If you detect an "intruder" in the house, make sure it isn't your teenage daughter trying to sneak back in from a late-night party, or your spouse having a midnight snack.   It is very easy to be disoriented late at night, when it is dark, and you are suddenly awakened.

6.  Own less shit.   If you keep large sums of cash, jewelry, drugs, gold, or other valuables around your house, you are more likely to be victimized by criminals.   Buying guns to protect your television makes no sense at all.

But I think the most important thing is this:  Stop being afraid.  Fear is an emotion that is not to be trusted.   And people who don't have your best economic interests at heart will use fear, to separate you from your money.

Quantum Action versus Newtonian Action

Quantum Physics is based on probable outcomes, whereas Newtonian Physics uses a cause-effect relationship.   Our behaviors can be classified in the same way.

I was thinking the other day how stupid I was as a kid.  Maybe not stupid, but naive.   I got into an accident when I was like 21 or so, and rear-ended a car while on an on-ramp.  When the cop arrived to take the report, I was like, "Well, it was an accident!"  As if somehow it wasn't my fault.   My 20-somthing mind believed that accidents were something that just happened.  After all, I hadn't intended to hit this lady's car, right?

But since I was looking over my shoulder while merging (something my brother taught me to do) it was a predictable outcome that such an accident would eventually happen.  It is like rolling a stop sign.  You can do it again and again and nothing will happen.   But from a probabilistic point of view, you will eventually get into a wreck, if you engage in that behavior.

You see, I was living in a Newtonian world of cause-and-effect.   Issac Newton derived the basic laws of physics, which stated that for "each action, there is an equal and opposite reaction".   And for young people, this cause-and-effect mentality rules the universe - in their minds.

So, people who live the Newtonian lifestyle put bumper stickers on their cars saying, "Watch for Motorcycles!" - as if being hyper-vigilant would somehow alleviate the slaughter of bikers on the road.  The reality is, in a Quantum Physics world, such events are probabilistic in nature, and you can predict, within a region of uncertainty, that certain actions will have probabilistic outcomes.   If you own a motorcycle, you will get into a wreck eventually, regardless of the number of bumper stickers or how hyper-vigilant we all are.

For example, consider my friend in Connecticut back in 1980.  He bought a new Harley Sportster and drove it everywhere as fast as possible, without a helmet.  One day, he was going about 50 in a 35 zone, and a kid in a Jeep pulled out in front of him.   He drove the Harley through the Jeep, severely injuring himself (as well as the kid), and he spend months in the hospital with, among other things, a cracked skull.

I went to visit him, and he had all the Harley brochures spread out, trying to decide which bike to get with the insurance money he was do doubt going to collect.   He learned nothing from the near-death experience, but rather, decided to double-down his bet.

From his Newtonian perspective, the "cause of the accident" was the kid who pulled out in front of him.   Not wearing a helmet and speeding were not even tangential issues.   "But for" the car pulling out, the accident would not have happened.

And Issac Newton would agree.   One action has an equal and opposite reaction.

But a Quantum Physicist would disagree.   They would point out that there is a certain finite probably (that is actually quite high) that a car will pull out in front of you, if you ride a motorcycle long enough.  If you are going too fast, you won't be able to stop in time.  If you aren't wearing a helmet, your injuries will be far worse than if you were.   These are statistical probabilities that you can calculate down to the last decimal.

And you can avoid these bad outcomes not by looking for cause-and-effect solutions, but simply by choosing to avoid risky behaviors.   Wear a helmet.  Slow down.   Sell the motorcycle.

Similarly, I wrote about a friend of mine who shot himself in the head "by accident" and miraculously did not die.   I talked with him recently and he also believed in the Newtonian world, stating that the shooting was "an accident" although he does not remember how it happened.   Instead of getting rid of his guns, he can't wait to get them back, although he conceded that "maybe he needs to lock them up" or something.  "But then they are no good for protecting yourself!" he says, still lying in the hospital with tubes in him.

He believes in cause-and-effect, not quantum mechanics.   "But for" the "accident" he would not have been shot.  The Quantum approach would show that having guns in the house - particularly loaded ones on your nightstand - creates the very real risk that the gun will hurt you or a loved one, about 22 times more than it would hurt an intruder (and intruder crimes are just not that common).   Keeping the guns locked up, or not having guns at all, reduces this danger by a huge margin - or eliminates it entirely.  Given the potential hazard, it seems reasonable to eliminate such a risk, doesn't it?

But from his perspective, that doesn't register.  The problem was the specific events that lead up to his accident, even if he can't remember what they were.  "If only" something hadn't happened that night, he would be right as rain.   Guns don't kill people, people kill people - right?  That is the Newtonian view.

Now, this is not to say that your actions don't have equal and opposite reactions.   I have noted again and again in this blog than you are not a statistic and your choices are more important than statistics in your life.

But the Newtonian thinkers take the opposite tack.   They believe they can prevent bad shit from happening to them, simply by making the right choices, and "but for" some action by another, their world would be perfect.

And if they make the wrong choices?   It is only then that their world turns Quantum - that they are "victims" of the laws of probability and bad luck.   And they view anyone who is successful as "lucky" and blessed by the fates.   It takes the Newtonian/Quantum analysis and stands it on its head.   Anything bad that happens to them is the result of someone else's bad choices.   And their bad choices (if they even admit to them) are overwhelmed by probabilistic outcome.   No matter how you slice it, nothing they did was wrong!

You do have choices and the choices you make should be based on both direct outcomes (in a Newtonian sense) as well as Quantum Probabilities.   Yes, driving your motorcycle into a tree, intentionally, will injure you, and it is a good idea not to do that.   But that doesn't mean that "but for" doing something really stupid, no bad shit is going to happen.   The better Quantum decisions you make, the better off you will be.  Slowing down and driving more carefully and wearing a helmet and full leathers are choices that will ameliorate risk, but not eliminate it.   Not owning a motorcycle is one way to eliminate it entirely.

Now granted, you may say, "Well, gee, that is no fun, not having a bike!  You might as well do nothing!"  And that is a valid point.  You do have to take risks in life - a lot of them.   And nothing you can do will 100% insulate you from all possible risks.    But you can anticipate that some outcomes are fairly predictable.  

You will likely have a health crises in your life, for example.  So it might be a good idea to plan for such a "rainy day" rather than spend all your money on toys and eye candy and then act blind-sided when you are saddled with huge hospital bills.  So many people, in the past, did just that.  They turned down health insurance as "unaffordable" as they would rather have had a new car.  And when they wrecked the car and ended up in the hospital, they act all shocked that this outcome occurred.  It was predictable.  It was quantum.

Similarly, Newtonian thinkers, when they invest (which is rarely) will invest in long-shot payouts and expect "best case scenarios" to pan out.   When their investment in Gold or BitCoin or Groupon fails to pan out, it is because someone else made a mistake, not them.   The fact that failure rates on IPOs and startups are high, and that long-shot investments rarely pan out does not register with them.  They deny probability and the Quantum effect.   Everything in their world is cause-and-effect, and someone else is to blame (preferably black people or Democrats) when their mini-mansion investment went South.

The Newtonian thinkers base everything on a best case scenario and never plan for Quantum effects.   They stretch their finances to the limit, making payments on crap, and when they lose their jobs, they act like a deer in the headlights - as if some unforeseen unpredictable tragedy that has never occurred in the history of mankind has singled them out as victims.  The reality is, of course, that all of us should plan on being laid off at one time or another.   And you should think, on a day-to-day basis, "What is my Plan B?" if something bad should happen.

That is Quantum Thinking in a nutshell - understanding that unforeseen events and bad things can happen, and then making decisions that ameliorate or eliminate such risks.  Relying on the Newtonian cause-and-effect mentality will only insure that you are blindsided, again and again in life, as tragedy will seem to strike you "from out of nowhere" and moreover, you will never learn from the mistakes you make.