Selling FEAR again

Fear is never an emotion to be trusted.  When someone tries to sell you fear, back away!

The media is at is again, hyping fear as usual.  You should be afraid, they tell you, because all sorts of horrible things are happening:

The Stock Market is crashing and investors are panicking  The stock market has been doing very well over the last six years - since Obama took office. It is to be expected that after a record bull market, there will be some bears.   A 1% drop isn't great, but neither is it the end of the world.   Companies that continue to churn out earnings and dividends will continue to hold value.  Companies that are speculative will continue to fail.   The DJIA and other indexes are, in my opinion, too heavily weighted with the latter, with tech stocks making up too much of these indexes.  When the price of Apple and Facebook are used as indicia of the health of the market, you might think the market is sick.

The Ebola Virus will wipe us all out in a matter of months!  Well, again, not exactly.  One person has died, in America, after returning from Liberia.  This is out of a nation of over 300 million people.  Meanwhile, 40,000 people die every year in car crashes, yet even a gory wreck hardly makes a headline.  Put things in perspective.

Islamic Terrorists are taking over America and beheading people!   Well, OK, one person.   Hardly a Jihad, just a crazy person.   On that same day, dozens of other crazy people shot others with guns, and it hardly makes the news anymore.

Internet Hackers will hack into your smart thermostat or light bulb and take over your home!   And do what?  Turn up your thermostat?   The article on CNN hyping this fear has a link explaining the "shellshock" virus is actually no threat at all - unless your smart lightbulb is connected directly to a server.

And so on and so on.  The media loves to sell FEAR and this month, they are having an orgy of it.  Between Ebola and ISIS and "stock market crashes" they hype the fear on top of fear.  Oddly enough, many of the articles - if you bother to read them - say there is little or nothing to actually fear.  But the headlines are another story.  "Should you be afraid of ISIS?" and that sort of thing.   People read the headlines, but not the last paragraph of the article.   Fiberglass Horses.

You can sense the media's frustration, too.   Why aren't we are all panicking?   CNN laments that despite its best efforts, Americans are still happy.   Keep trying CNN!   Eventually we will all be on Prozac, if you just keep up the drumbeat of bad news!

Yes Americans are still happy.  Funny how that works - that people living in the wealthiest country in the world with the highest standard of living in the world, would actually end up "happy".   ISIS and Ebloa are far more serious threats to folks in Syria, Iraq, and Africa.   Seriously - just read the box scores.  America:  1 beheading.   Syria:  1,000.    America:  1 Ebola Death.  Africa:  3,000.

A lot of what is screamed in the headlines is indeed tragic - for people in other parts of the world.   And we should be concerned about these tragedies, of course.   But there is something obscene, in my mind, when Americans posit themselves as "victims" or potential victims, of these international events.   Even the events of 9/11 - as devastating as they were - pale in comparison to routine violence, death, and destruction which visits the rest of the planet on a regular basis.

Why does the media sell fear?  Because fear sells.  People are far more likely to "stay tuned" for a fear-based TeeVee segment or click on fear-based article.  And the media people know this, as the Internet monitors what we click on and the Nielsen people know what we watch.   So they know that people will go for "everything's awful!" but not for "Gee, things are swell!"

It is human nature.  Every story has to have a crises or drama.  Man against Nature, Man against Himself, Man against Man.   You don't have a "story" that goes, "Once upon a time, everyone lived happily ever after."   There has to be a story "arc" - right?   Or so we think.   Happily ever after is very underrated.

Even when things are going swell, the media sells fear.  If the market is going gangbusters, they tout "Will the market crash?" headlines.   If terrorists haven't struck recently, they tout, "Where will the terrorists strike next?"  

How do you avoid this sort of nonsense?  The simple answer is: UNPLUG.   Stop watching network television, particularly network news.  It does not "inform" you of anything.   Stop clicking on fear-based articles on the Internet, and stop believing in them.

Perceive reality for what it is, not what the fear-mongers want you to think.   As Americans, we live in a very safe and comfortable and prosperous place.   The world isn't about to end, just yet.   Being afraid all the time does nothing for you, personally.   But as I noted before, cowed and fearful people (depressed people) do make excellent consumers!

This segment of "Terrorists are all out to kill you with Ebola" is sponsored by Exxon!

How to do an Intervention!

Staging an Intervention is easy as pie!

A reader writes that their parents want them to "intervene" in the life of a sibling, to "help" that sibling with their hoarding disorder and other personal issues.

An intervention!  What a neat idea!   What could be easier?  It reminds me of this Monty Python bit (see video above) called "How to Do It!":

Cut to a sign saying 'How to Do It'. Music. Sitting casually on the edge of a dais are three presenters in sweaters - Noel, Jackie and Alan)

Alan: (John Cleese) Hello children.
Noel: (Graham Chapman) Hello.
Jackie: (Eric Idle) Hello.
Alan: Well, last week we showed you how to be a gynecologist. And this week on 'How to Do It' we're going to learn how to play the flute, how to split the atom, how to construct box girder bridges and how to irrigate the Sahara and make vast new areas cultivatable, but first, here's Jackie to tell you how to rid the world of all known diseases.
Jackie: Hello Alan.
Alan: Hello Jackie.
Jackie: Well, first of all become a doctor and discover a marvelous cure for something, and then, when the medical world really starts to take notice of you, you can jolly well tell them what to do and make sure they get everything right so there will never be diseases any more.
Alan: Thanks Jackie, that was great.
Noel: Fantastic.
Alan: Now, how to play the flute. (picking up a flute) Well you blow in one end and move your fingers up and down the outside.
Noel: Great Alan. Well, next week we'll be showing you how black and white people can live together in peace and harmony, and Alan will be over in Moscow showing you how to reconcile the Russians and the Chinese. Til then, cheerio.
Alan: Bye.
Jackie: Bye-Bye.

(Children's music.)

And that, in short is how "easy" an intervention is!   You just get a bunch of friends together, go over to your troubled friend's house, and sit him right down and explain to him why his addictions and other problems are doing him no good!   He will say, "Jolly well, you're right!  I'm giving up my methamphetamine habit today!"

And once again, you've saved the world.

Nice fantasy.   But that's all it is.  And in a way, it is a sick fantasy - the idea that "we" are all perfect and have our shit together, and are in a position to tell other folks what for, and moreover that they will just sober up and say, "Gee, you're right!  I never realized heroin was so bad for me!"

_______________________________

Letting people face the consequences of their choices is often the greatest kindness you can do them.  Insulating them from consequences is often the greatest cruelty.

______________________________

There are a number of flaws in the "intervention" theory, which is one reason why this 1990's trend has faded from the scene.

1.  They don't work.    People with addictive and compulsive-addictive personalities, mental health issues, drug habits, alcoholism, hoarding, or whatever, can't just "kick the habit" after a two-hour long "intervention" by some friends.   These problems are protracted and ingrained and require years of therapy and help (and often medications) to cure - if they can be cured at all.  The sad reality of mental illness and addiction, is that few people are ever "cured" of it.  They take it to their graves.

2.  Who are you to say?   If you are paying 22% interest on a "miles" credit card, you really don't have your own shit together, either.   Maybe it isn't as bad as a meth habit, but it shows that you are not taking life seriously.  Rather than going around trying to "fix" other people's lives, you should concentrate on fixing your own.  And no, this isn't being "selfish".   If everyone concentrated on improving themselves, as opposed to improving others, well, we wouldn't need "interventions" at all.   And yes, some of the folks who like to "intervene" are the ones most needing an intervention of their own.

3.  Leave it to the professionals.   Drug addiction, mental health issues, alcoholism, hoarding, and the like, are not something amateurs should diagnose or attempt to repair.   You may do more damage than good, although in most cases, you just end up doing nothing and wasting your valuable time.

4.  What are your real motives?   Many people who want to stage interventions do so in order to feel better about themselves.   They want to show others (the other attendees at the intervention) that they "care" and moreover have their shit together enough to not only handle their own lives, but the lives of others.  It is a pretty sick scenario.  I am not saying that all interveners are like this, but usually the person organizing one of these lynching parties is usually the type.

5.  Change has to come from within.   An alcoholic won't stop drinking because someone told him not to.   The meth addict won't stop because his friends said not to.  The hoarder doesn't think he has a problem, period - which is why it is the hardest compulsion to break, if ever.   If any of these addictive/compulsive behaviors is to change, it has to be from the person involved, not an external force.   It is like the old joke, "How many psychiatrists does it take to change a light bulb?  One, but the light bulb has to want to change!"

6.  You create two victims.  If you squander all your energy and money trying to "help" someone else, and they refuse such help (or abuse you) - which is quite likely - all you have done is now create a second victim - yourself.   I know a plethora of such folks, who will regale you for hours about how they tried to help Mom or Dad or Brother or Sister or Uncle, and ended up being abused instead.   Mom gets into debt problems, so Son bails her out and buys a new set of tires for her car (which he can barely afford to do).   Mom shows up the next day with a new car, financed at horrific rates.   She has learned nothing other than her children are patsies and will bail her out.  Letting people face the consequences of their choices is often the greatest kindness you can do them.  Insulating them from consequences is often the greatest cruelty.

"Well," some might say, "You're always telling people what to do in your blog!  Why don't you follow your own advice?"

Nice try, but no sale.  You see, I wrote this blog for my own edification, not as a teaching tool.   If someone gets something out of it, fine.  If not, they can piss off.   And like the First Lady promoting healthy eating, I am not "telling people what to do" but merely pointing out that spending all your money and then borrowing even more is a really bad idea.   I am not forcing anyone to do anything or 'intervening' in their lives.

"But what about family members!  Aren't I supposed to be my brother's keeper?"  And the answer is, well, NO.   You are not obligated, just by familial relationship to "take care" of a sibling, once you have left home and formed a life (and family) of your own.  You primary duty is to take care of yourself, your spouse and your own children (if any) before you go running off to help a brother, sister, Uncle or parent.

Yes, it is a tragedy when a parent or sibling suffers from mental illness or drug or alcohol problems.   But no, you can't "fix" them like you would an old car (which itself is a messy and expensive process!).   The best thing you can do is leave it to the professionals (and move and leave no forwarding address).  You are not obligated to "fix" other people, help other people, or be a punching-bag for abusive people.  Fix your own life - be kind to yourself.  I give you permission.

Of course, there are some who prefer to "intervene" so they can be the friend with the perpetual problem.

If you see a friend about to drive their car off a cliff, you should warn them there is a cliff ahead.   But don't be surprised if they ignore your warning - and tell you they are taking a shortcut!

The key thing is not to be in the back seat when they drive the car off the cliff.

  

Fiberglass Horses

This poor horse has been left out in the sun all day (and apparently painted as well!).  Somebody ought to do something about this!

We were traveling in Indiana in Amish country (actually an area called Kentucky-ana) and we stopped at one of these tourist-trap "Amish" stores which sold a lot of stuff, some of it even made by Amish people.

Out front was an old Amish buggy, obviously past its prime, and in front of it was a fiberglass horse.   It was a display piece and an advertising gimmick.

On the wall in the Amish store was a framed letter from an outraged citizen.   "Dear sirs," it began, "I drove by your establishment the other day and saw an Amish buggy with a horse tied up outside in the hot sun.  It was at least 85 degrees out and the poor horse didn't even have a hat to shade its eyes!"  

The missive went on:  "When I returned from the doctor's office, I was appalled to see the horse was still tied up there!  It had been at least an hour!  This is cruelty to animals!  I will never shop in your store and I will tell all my friends not to shop there as well.   (signed) Animal Lover"

Below this, in red marker, the owner of the store wrote:  "Our horse is not real!"

Obviously not.  But it sort of illustrated to me how people can get upset about fiberglass horses and then go off on a rant without doing any real research first (and we all do this to some extent, even I).   We drive by at 65 mph and see what appears to be a poor horse tied up to a tree.   But we don't bother to slow down to investigate further, but instead jump to conclusions.  And people do this all the time.

On our little island, we have a deer overpopulation problem.   The deer here have no natural predators (wolves, coyotes, etc.) and there is no hunting allowed.  The end result is predictable - a deer overpopulation problem.   On any given night there are eight or so on my lawn.   You can walk right up to them and touch them, they are so tame.

But you might not want to.  They harbor deer ticks, and the tick problem has risen along with the deer problem.  And diseases like Lyme Disease are spread by deer ticks - yes, even here in Georgia.  The only way to get rid of the tick problem is to reduce deer population density.  In other words, the herd has to be managed, since we brought them here in the first place (for hunting, long ago) and eliminated all other predators.

So they are going to cull the herd, which only makes sense.

Yet, some see fiberglass horses in all of this.  They put up yard signs saying "Please don't kill the little deers!" and they write angry letters to the letter saying "Just because someone's flowers got eaten by deer is no reason to kill the deer!" - the classic "straw man argument" if there ever was one.  The issue isn't "someone's flowers" being eaten by deer, but rather a sickly, disease- and tick-infested herd that is overpopulating the island.

These folks are seeing fiberglass horses.  They have drive by at 65 mph and see what they think is an injustice and an outrage.   As you might expect, the instigators of this nonsense tend to see a lot of fiberglass horses in their daily lives.  Talk to them for even ten minutes, and they will regale you with the latest outrage du jour.  We live on a vacation island, and yet they are so unhappy - convinced that dark plots and conspiracies abound.  And I, of course, am the fool, for failing to appreciate how evil and dark a vacation island can really be.

No really, they think this.  Adults, too.  Old people, even.   It would be funny if it wasn't so scary.  No wonder the world is as it is - people will believe just about anything, particularly things they want to believe in.

Not surprisingly, they smoke pot - a lot of it.  People who smoke pot tend to see a lot of fiberglass horses, which is predictable, as it is a drug that alters perception (and tends to make the user see vivid conspiracies behind every tree).

Fiberglass horses.   Watch for them in your daily life.   You will see a lot of them on the television and in the newspapers - issues which are supposed to get you all outraged and twittering, before you bother to investigate the whole story.

Just remember,  fiberglass horses are not real.   And there is little in your life to be gained by being outraged over fiberglass horses.

The Creature from the 4th Dimension!

Beware the creature of the 4th dimension!  Coming to a theater near you, soon.

In my last posting about refinancing your car, I pointed out that it is usually (meaning always) a rotten deal.  You end up extending the loan period and paying more overall.

But plebes think in terms of monthly payment, not overall costs, so they sign up for these odious deals.  Why is this?

Well, simply stated, we are three-dimensional beings living in a four-dimensional world.  The fourth dimension is time and few of us understand how time affects money.

For example, I noted before how you can buy a boat or motorhome and end up "upside down" on the loan.  Even if you are not, you end up over time, poorer, as the motorized vehicle depreciates like mad.   The person signing the loan papers and driving the shiny new motorhome enjoys low monthly payments and the new-car-smell.   But down the road, another person (the you of the future) has to pay the piper.

And that right there is the problem.  As simple three-dimensional beings, we don't cognitively associate the future us with ourselves.   We view ourselves as a series of discrete three-dimensional beings, each existing in a point in time, and thus live for today.  The asshole of the future?  Well, screw him.  He's such a greedy sonofabitch, always wanting us to "save our money" so he can spend it.  I hate him - don't you?

So you see, we really are four-dimensional beings, even though we perceive ourselves only in 3-D.   But not only that, but everything we own and touch exists in 4-D as well, including money - especially money.

Interest is the 4th dimensional aspect of money.  If you borrow money, you pay this, over time.  If you own money you receive this (and interest is your friend).  How money changes over time is almost like magic, and compound interest in particular is the most fascinating part of the deal.

In my previous posting about refinancing car loans, I failed to point out one reason why it is such a shitty deal.   When you refinance any loan, after the first few years, you've already paid the lion's share of interest on the loan.  The remaining payments are almost all principal.   So when you refinance, well, you end up paying that interest again.  Anyone living in 4-D can easily see that.  3-D people, who live and die by the monthly payment, actually think they are saving money. They aren't.

3-D versus 4-D thinking manifests itself in other ways.   3-D people think that once you buy a car, or a motorhome or a house, you have it forever - that the object in question remains static and unchangeable.  Since they do not exist in 4-D, they fail to understand that a car, after 10-15 years, is pretty well shot and will need major repairs and overhauls.  These are the sort of people who blather on about how they should have kept that old rusty Camaro they had in High School, as it is now a "collectable" and worth tons of money.  What they fail to realize is that it was a rusted-out dented piece of shit after a decade of use, and ready for the junkyard.  The collector car on the television is worth a lot of money because someone spent that much money fixing it up.

3-D people are shocked when they buy a condo and then are amazed after a decade that a special assessment has to be made to repair the roof or install a new boiler.   This stuff should never change!  Why would a roof wear out over time?  They just don't understand time and its ravages.  A 4-D person understands that things wear out over time, and that Entropy dictates that everything we do will turn to dust, over time.   You can't fight Entropy - and a smart 4-D person knows better than to try, and budgets for it instead.

And maybe that is the distinction between those who are successful in this world and those who are not.  3-D people are "consumers" who go about spending their weekly paycheck in monthly installments.  They are forever perplexed and flummoxed by our financial system and cannot understand how money works, how to accumulate it, and how to become wealthy over time.   They are buying as much as they can borrow for - why aren't they rich yet?   It is like explaining calculus to a dog.

4-D people, on the other hand, have a grasp of how time affects money - and everything else.  These are the folks who look at overall transaction costs, not merely monthly cash-flow.  They are the ones offering the raw deals to the 3-D people, as they can see what raw deals they are, and know that the 3-D'ers are clueless about time and how it affects money.  Maybe 4-D is a better moniker than "1%'er".

And few of us do "get it" in that regard.  I know I didn't.  I lived in a 3-D world for ages, certain that I could turn back the clock, and that the latest car or gadget I bought would last forever, and thus was a swell "investment".   After you've thrown a few dozen of these investments in the trash - be it cars, computers, stereos, televisions, boats - whatever - you realize that everything in the world exists in four dimensions - including yourself.

Yes, death.  That part.  Our existence is finite, and it makes no sense to spend it being unhappy and chasing bills and working ourselves to death to pay for things.  Yet, most people do.

We stopped at a boat dealer today, to look at a "trailerable trawler" as maybe a replacement for our RV, when we get tired of RVing.   I mentioned to the guy running the place that it would be a nice boat for going up the intracoastal waterway (very slowly).  He replied, "Well, you'd have to have a lot of time off to do that!"

He lived in 3-D.   Most of his customers bought fishing boats to use on the weekeneds, when they had precious little time to themselves.  They worked five days a week so they could fish for two, chasing boat payments for their whole lives.  The idea that someone in their 50's could take months off at a time (or be retired) was just alien to him.

I am not sure we are going to buy a boat anytime soon.  They are fun to look at, but the cost of boating is easily double that of RVing.   Everything boating-related is very expensive, from the fuel on up.   One reason we were looking at the "trailerable trawler" is that being trailerable, it saves a lot of money on marina fees (who charge you to haul out and store your boat) and also allows you to fuel up at a gas station, not a marina (where fuel is a dollar more a gallon than on land).

But that being said, it might just be more fun to rent such a boat than to buy one.  One idea I did have was to buy a freshwater boat in Michigan (or some other place up North) and take it down the ICW to Florida.  After making the trip, sell the boat (which would be desirable, never having been in salt) and move on with life.  If you played this right, you could buy the boat, make the trip, and sell it for what you paid for it, leaving fuel as your only expense.  The mistake I see folks making with trips like that is that they buy the boat, make their "trip of a lifetime" and then keep the boat and letting it molder, sometimes in their backyards.   Again, 3-D thinking - the boat is not depreciating or degrading, in their minds.  A 4-D thinker sees the depreciation counter spinning madly on a daily basis as the moldering boat is worth less and less on a daily basis.

We all live in four dimensions.  It pays to think in four dimensions.   Think about the fourth dimension before you borrow money.  Think about the fourth dimension if you letting a boat or RV or old car molder in your barn or backyard.   It may be "paid for" but it is costing you something, in terms of depreciation - and that is something you don't see in 3-D.

Refinancing Car Loans? Uh, No.

Refinancing a car loan is a sure sign you are on your way to Hillbilly Financing!

In the e-mail this morning, this missive from Capital One.  Capitol One can be a good bank to deal with, as they have low interest rate (7.17%) credit cards and no foreign (overseas) transaction fees.   But like all banks, they will also hand you a loaded pistol and let you play Russian Roulette if you want to.  You don't want to, trust me.

The gag is this:  Refinance your car loan, usually over a longer term, and the bank makes more money in loan fees and interest.  You lower your monthly payment by a trivial amount, but end up behind the 8-ball in the long run.

The pitch was this:

Refinance and you could lower your payments by $737 per year on average.*

"*Yearly payment reduction claim is based on estimated average payment reduction our customers experience over a year with their new loan (same or a longer term) compared to their prior yearly loan payments. Yearly payment reduction may result from a lower interest rate, a longer term or both. Your actual savings may be different."

$737 sounds like a lot of savings!  But that is not "savings" but just lowering your monthly payment by about $60 a month.   Lower payments does not always mean "Savings!" but rather something else.  In this case, it means a longer loan term, and that means you are not "saving!" but rather paying more in the long run.

And since loan rates haven't been going down lately, I doubt many people qualify for a "lower rate" particularly on a five-year-old used car.  Longer term is the gag they are selling

And as I noted in my seven-year car loan posting, long-term car loans are dangerous.  You can end up "upside down" on a loan in a real hurry, and moreover, the car will wear out before you pay off the loan.   Suddenly, you need new tires, a brake job, and a bunch of other things, and you now still owe for three more years.

Freaking Brilliant Financial Move!

If you can't afford a car loan, you can't afford the car.   What gets people into trouble like this is that they buy more car than they can afford, and then can't afford the payments.   A better idea is to buy a cheaper car (preferably used) and pay less (preferably cash) and finance less (preferably not at all).

But of course, no one in America wants to do that do they?  No, Americans by and large like to buy more than they can afford, put themselves into debt up to their eyeballs, and then blame it all on Obama (or the Republicans) when their lives go horribly wrong.

And folks like Elizabeth Warren would say that such deals are rotten and we should pass laws to make them illegal.   And there is logic in that, but it ain't gonna happen in my lifetime, so let's move on to plan B - not taking bad deals, just because they are offered.

We could outlaw smoking (or drinking) as those are also bad for you.   But we've tried that and it largely didn't work - it drove the business underground.   Loan sharking is nothing more than bootleg lending, when you think about it - and the end result of outlawing poor financial choices.   But I digress.

If you are thinking of refinancing your car loan to save $60 a month, and at the same time paying $100 a month for cable TeeVee, I have a suggestion for you:  Dump the cable and use that money to pay down the car loan.  Sacrifice something.  Do without.   In the long run, you will be better off.

Biting on these bad financial deals isn't the answer.