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Comments Credits
Comments by YACCS
Wednesday, April 28, 2004

Money...that's all I want.....

Money...that's all I want.....

I admit that during my convelenscence that I watch a lot of TV. Part of the reason is that my cousin lost my reading classes, and at 39, I need them as much as I did at 12. And I needed them then.

But I don't watch it with an empty mind. If you catch Dr. Phil or Oprah, a lot of their shows revolve people's money problems. When a couple starts bickering, sure the glossy stuff is about sex and childcare, but at the root is money.

On Oprah, one family owed $92,000 in debt, many in legally usurious "payday loans". What did their family have for that massive debt? A computer on payments, a camcorder, a truck costing $700 a month. In short, junk.

The wife was addicted to spending. She bought useless crap because it made her feel good.

Here's a simple rule: never buy any electronics on time. If you don't have the cash, leave the flat screen TV at the store. Buying a depreciating asset with credit, which is what a computer is, is stupid. You have to replace it every three years. Which is why I use used ones and build my own. You never want to go in hock for a computer.

More and more, these shows are dealing with couples with financial problems. Now, the "expert" they had wanted people to cut their cable and cellphone bills. But that's bullshit thinking. You could probably save more by adapting the way you shop and eat than not paying for cable. After all, this isn't 1980. We now pay for TV. You can look to chop channels, like Showtime, or get a cheaper cellphone plan. He suggested that "you use a payphone". Well, that's not going to work if you have small kids and need to keep in touch with them.

One of the most expensive things you have in your home is your landline phone, yet most people never look at the bill. A lot of bills people get, they never examine. They just pay them.

The problem with a lot of the financial advice handed out on TV is that itn isn't realistic. People get in debt because of lving above their means. Hell, this woman was bitching about going to the dollar store with a Louis Vutton purse. Uh, honey, if you hadn't bought that pointless purse, maybe you wouldn't be broke now.

Americans have lost the distinction between quality and cost. They see some celebrity, who gets a whopping discount on their purchase, and they have to have them. I once passed by the Manolo Blahnik boutique in Midtown one day. You have never seen skimpier shoes. When you hear an actress praise these shoes, or Jimmy Choo's or a Vera Wang dress, they aren't paying retail. Hell, just the mention might be a paid endorsement. They may get it for free. The trick is to lure you in to pay the retail they don't.

Now, I'm not against quality. I will pay good money for quality items, like a suit. Now that I can wear them, I'd buy a Brooks Brothers suit without hesitation, if I had the cash. The same with a Mercedes or BMW. Why? Because if I can afford them, I know they will last me a long time. But this year's Armani? I am not George Clooney, sorry. I don't make that kind of cash. Nor can I pretend to.

Too many people go into debt, not for their own business or a home improvement, but over status items. A too expensive car, too much for their home, things they cannot hope to keep if times go south.

I'll never forget this. On an Oprah, a woman wanted to buy an $800K house while her husband couldn't come close to affording this. She had no idea about financial management, no idea of the down payment, the mortgage payments, much less the property taxes. All these very expensive things which would not only affect her income, but her lifestyle for years to come.

A fancy house is nice, but not when you work 60 hours a week to pay for it. And then can lose it at the first economic dowturn.

Just today, Dr. Phil was dealing with a family which had a deeply troubled nine year old, but the husband was working 60-80 hours a week. Well, what do you think happens when you spend so much time out of the home. Dr. Phil had to tell the guy to take some time off, and he wasn't the first guy to be told this.

We have a cycle of buy and bust with consumer spending, People are never educated in school about the basics of the economy. So many people define their lives by vanity purchases which have no real appreciable value. It's one thing to buy a Coach purse or bag which will last a decade or more, but another to buy a bag which will be unfashionable next year.

The fact that many people are more interested in toys, whether Xboxes and Playstations 2 or Air Jordan's, throwback jerseys, than the kind of purchases which bring real value, or even saving money. Yeah, Jay-Z looks great in a throwback jersey, but he's a multimillionare who can afford that stuff, most of us aren't.

The most amazingly stupid thing I've heard was on Suze Orman, where this guy took money from his IRA to buy a laptop and PDA. Wha? You take money from your retirement fund for a depreciable device which will have to be replaced in three years?

Oh yeah, the guy was unemployed at the time.

I also am bothered by the tightwads who become rich. This guy was chortling over shopping at Costco. Well, you know, some of the things I want can't be found at Costco. I don't take pride in buying in bulk and tying my purchases to coupons. It's unseemly. Just as displaying great wealth is vulgar, so is excessive cheapness. It's embarassing and degrading.

Saving money is smart, but being cheap is as sinful as being wasteful.

The smart thing to do is to live below your means. Live on less than you make and when bad times come, you may survive them without too much pain. If not, when they repo your car and foreclose your home, you have no one to blame.

posted by Steve @ 5:58:00 PM

5:58:00 PM

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