Blog – Page 278

That’s the one most common objection, from people who stumbled across one of our guest posts at Free From Broke, or Money Funk, or Len Penzo, or Credit Card Chaser, or 20sMoney, or Planting Dollars, or My Journey To Millions, or one of the other myriad places that’s been gracious enough to let us beat our chests with our unnuanced approach to building wealth. Yeah, sure, Greg McFarlane can turn a phrase and make me giggle, but why should I trust Betty Kincaid and him to advise me when Dave Ramsey is so earnest and reputable? And Suze Orman so brassy? And Clark Howard so breathtakingly sexy?

If you’re in your early 20s, have negative net worth, and have adopted the belief that debt is just an inevitable fact of life for your remaining decades, you need the book. If you’re adult enough to admit that you don’t know a blessed thing about money, you need the book. If you let someone else do your taxes every year, and isn’t because your finances are so ensconced in LLCs and S corporations that if takes a CPA to decipher your ability to maximize deductions and credits, you need the book. (You also need to start doing your own taxes, at least once.) If you work on Wall Street, dealing in conditional variance swaps and measuring third-order derivatives of the option value to volatility, you can probably skip the chapter on securities and head straight for the chapter on how to buy a car.

We wrote the book to eliminate guesswork for people who can’t be bothered to learn every nuance of someone else’s field of endeavor. Escrow, for instance. Say you’re about to close on a house. If you’re sitting across from an escrow officer who’s talking about proration schedules and title search indemnity, and you nod your head for fear of seeming clueless or unsophisticated, your pride will cost you money. Possibly lots of it.

If you reach that point, in that scenario, your only other option is to admit your ignorance and sit there as the escrow officer goes through every line from every one of the dozens of documents you have to sign. The proceedings will slow to the speed of evolution. It’ll take 5 or 6 hours to go through every contingency, and there’s no way you’ll be disciplined enough to sit through it all anyway.
Or, you can spend $10 or $14 (prices vary, usually downward) on the book. Then you’d know what to have asked the real estate agent and the mortgage lender weeks before you’d gotten to this point.

Tell us, right now: where do the deductions from your paycheck go? (Don’t say “the government”, that’s a D- answer.) How much goes to where? Does any of it ever get returned to you? And if so, then why did the government confiscate it from you in the first place?

Admit it: you probably don’t know. You don’t know what the acronyms stand for (FICA? COBRA?), nor do you know what percentage of your money you’re losing before you even get to touch it.

Are you the least bit interested in minimizing those deductions? In taking home a larger piece of what was yours to begin with? Then you need the book. Control Your Cash isn’t just a memorable and semi-mellifluous title. It’s, as the advertising drones say, a call-to-action. Put it this way: someone’s going to control your cash. If you’d rather it be someone other than you, you’re either a child or retarded.

We wrote the book because we couldn’t find all this stuff – bank accounts, credit scores, home buying, entrepreneurship – in one volume. In the words of Alan Schwarz, author of The Numbers Game and probably not the first author to articulate this thought, “This is the book I wanted to read, but no one had written it. So I did.”

And thus, a book that breaks down your 1040 form line-by-line without boring you into catatonia. A book that teaches you how to walk into a car dealership and treat that tobacco-stained salesman in the Men’s Wearhouse shirt and tie like the petty thief he is. A book that explains how, when and why to invest.

But not what and where to invest. Control Your Cash: Making Money Make Sense doesn’t recommend particular places to put your money. It just explains what those places are, because most people can’t begin to guess. The book teaches you how all the particular investment classes work, and what their potential pluses and minuses are. But what securities, real estate or bank instruments you choose to build your fortune with are your business.

We’ll teach you to drive. Whether you become Dario Franchitti or Chris Waffle is up to you and chance. But you don’t need to be the former to get where you want to go quickly and safely.

Pun level: 0.0 Rhyme level: 0.0 Scapegoating George W. Bush level: 0.0 All in all, a disappointing protest sign.

How many times could you fill the world’s largest supertanker with the oil that’s spilled since the Deepwater Horizon disaster began?

Come on, guess.

Okay, let’s make it multiple-choice. Is it:

20,000
100,000
600
.2

The answer is 4), although that’s using the low estimate. At the absolute most, the oil that’s spilled so far would barely fill the TI Africa once.

Whoever says America’s education system is in shambles is wrong: in the last 7 weeks, we’ve become a nation of 300 million petroleum engineers. Still, that leaves the number of economists dangerously low.

British Petroleum is not evil. Joseph Stalin slaughtered people for the pleasure of it. O.J. Simpson too, on a smaller scale. The worst you can call BP is negligent, and even that implies that there’s no such thing as an unavoidable disaster.

11 BP employees died*, in case you forgot or never knew. Also, now is not a great time to be a shearwater. The human and animal costs notwithstanding, there remains an economic impact. If that sounds crass, denying the existence of said economic impact doesn’t make it any less real or eliminate the need to acknowledge and minimize it.

So let’s pretend that the people who are screaming that SOMETHING MUST BE DONE are willing to replace rhetoric with logic. Here are facts, not opinions:

It’s not the worst spill in Gulf of Mexico history. (That’d be the Ixtoc I spill of 1979, which lasted 9 months.)
It’s not the worst spill in American history. (Lakeview Gusher, California. 101 years ago. You’ve never heard of it, which should give you an idea of its lasting impact.)
It’s not even close to the worst oil spill in world history: we can still thank Saddam Hussein for that. At least Deepwater Horizon wasn’t deliberate.
Some people are convinced that there’s nothing the federal government can’t do.
Wishing, even demanding, is never enough to solve a problem.
BP stock has lost most of its value since the spill began, with a floor to be determined. (“Good! Teach those planet-rapers what’s what!”)

Voluntary exchanges of stock have already cost BP $97.9 billion, to say nothing of the costs involved in cleaning up the mess. If that’s not enough for you, what would be?

Seize their assets!

Their rapidly dwindling assets? To what end? So federal bureaucrats with zero accountability and zero experience can manage those assets? Never mind that BP, as its acronym would indicate, is headquartered in the United Kingdom and harder for the federal government to claim than, say, General Motors.

Wiping BP from the face of the earth would make a bad situation worse. BP has created 92,000 jobs around the world without requiring taxation or a confiscatory stimulus package to do so. Is employment important?

And if BP went broke, then what?

Bankruptcy court!

According to its 2008 balance sheet, BP has $228 billion in assets including $103 billion in “hard” assets – property, plant, equipment etc. Those would go to the highest bidder. Which would be a company that has not only a use for supertankers, rigs, and a distribution network, but the wherewithal to bid for them. Someone like, say, ExxonMobil. Yes, let’s increase the market share of the only company that environmentalists hate more than Amalgamated Lead Paint & Plastic Grocery Bags, Inc.

Solar and wind!

It’ll take more than a blog post to expose the holes in that argument, but for now, there’s no denser and more efficient way to transport potential energy than via petroleum and its derivatives. If there is, whoever discovered it is keeping awfully quiet and must hate money.

Perhaps it makes you feel good to join the “Boycott BP” Facebook group, even though all the BP stations in the United States are owned by franchisees. If you organize a protest, or pull an Ashton Kutcher and draw a connection between an oil spill and a political convention, think about what that does as far as solving the problem.

BP wants to stop and clean up the Deepwater Horizon spill a lot more than you do, so much so that they’re actually putting workers on the job. The next Code Pink volunteer who helps to float a containment boom up the Mississippi Delta will be the first.

Unless you’ve attempted to cap a drilling rig – one under a mile of water – you almost certainly don’t know if BP management is doing a good job or not.

They’re working on it. Sorry if that’s an unsatisfactory answer, but sometimes unfortunate events happen, and maybe laying blame is less important than solving the problem.

Any man-made disaster is like this. Exactly what are you supposed to do with the benefit of hindsight? If doctors didn’t prescribe thalidomide for pregnant women from 1957 through 1961, thousands of babies wouldn’t have been born with deformities. If a series of bureaucrats at the Federal Aviation Administration had refused to prohibit commercial pilots from carrying firearms, the World Trade Center would still be standing, 2743 civilians wouldn’t have been murdered, and there would have been less cause to invade Afghanistan and Iraq.

To write about Deepwater Horizon and say anything other than “hang BP’s CEO by his thumbs” might not be judicious, but there is a larger point. The stock is trading at a 13-year low. (Which might be a great buying opportunity. See here.) President Obama can show all the grave concern he wants. He can temporarily move the White House to Gulfport, Mississippi: it won’t stop the flow of oil. Nor will tarring and feathering BP chief Tony Hayward, to coin a phrase.

Righteous anger works fine when you punch out the guy who slapped your girlfriend. It works horribly with problems that are harder to fix. It takes composure, reason and hard science to make the Gulf of Mexico livable. If you can’t offer any of that, at least get out of the way.

——-

* Adam Weise, Dale Burkeen, Don Clark, Roy Kemp, Jason Anderson, Steve Curtis, Gordon Jones, Blair Manuel, Dewey Revette, Karl Kleppinger and Shane Roshto.

So just why should I buy your book, anyway?

If a Containment Dome Doesn’t Work, Try Screaming

Buy Now!

Looking for something?