Acquire More Stuff

March 15, 2013
You know what America needs? A good assistant manager.

You know what America needs? A good assistant manager.

Believe us, we’d rather not cite all these rotten examples. We’re sincere: we’d much prefer it if we could show you more people to emulate than to deride. But not only do the latter outnumber the former, it seems to be an inescapable rule of the universe that they always must.

There’s a regrettable phenomenon among the financially semi-aware that’s worse than hyperfrugality, and almost as bad as whining about self-inflicted and pointless debt. It’s rationalizing away reduction (and diminished fortune.)

Last week the New York Times ran a first-person opinion piece by Graham Hill, founder of both LifeEdited.com (“Design your life to include more money, health and happiness with less stuff, space and energy”) and TreeHugger.com, which is what it sounds like. (Recent headlines include “‘Don’t frack my mother,’ sing Artists Against Fracking” and “Test-drive: Ford C-MAX Hybrid vs. Toyota Prius V”.)

Hill lives in a 420-ft² Manhattan apartment, and feels so righteous about doing so that it’s the opening line of his piece. He wasn’t always so virtuously minimalistic:

in the late ‘90s…flush with cash from an Internet start-up sale, I had a giant house crammed with stuff — electronics and cars and appliances and gadgets.

Did he willingly jettison all that “stuff”, or did circumstances do it for him? Hill doesn’t say, but he does see advancement and accumulation as inherently negative:

My life was unnecessarily complicated. There were lawns to mow, gutters to clear, floors to vacuum, roommates to manage (it seemed nuts to have such a big, empty house), a car to insure, wash, refuel, repair and register

We here at CYC aren’t big fans of lawns ourselves – xeriscaping is less work and better suited to our regional climate – but millions of people love them and accept their upkeep as necessary. As Hank Hill (no relation) would tell Graham, the light yard work is its own reward. For those who’d rather not bother, well, that’s what Manhattan is for. Same deal with regard to the car.

And “floors to vacuum”? That lament is ludicrous for 2 reasons: first, as ascetic as Graham Hill is today, presumably he still has floors. Second, talk about your 1st World problems. Hey, Cambodian villagers: the rich American white man is complaining about the hassle of having to plug in his magic machine that effortlessly makes debris disappear.

Also, we’d love to know how his roommates feel in retrospect about being under Graham Hill’s “management”. Furthermore, look at the cause and effect. He takes on the unwanted responsibility of too big a house (for him), then complains about the subsequent problems of his own creation that follow the purchase of the house.

A message for Graham Hill, and more importantly, for all y’all:

POSSESSIONS ARE AWESOME. Looking around the room right now, we see a coffeemaker. If you’re not familiar, you spend a few seconds filling it with water and coffee grounds, press a button, and coffee shortly appears. No picking, roasting, shipping, grinding, nor distilling required on our part. We just spend a few pennies per serving and enjoy.

There’s also a TV, modestly sized as these new ones go. At barely an inch thick it’s as unobtrusive as possible, and it entertains us for hours on end. Yes, that’s a lousy deal.

Furniture to sit on. Appliances to keep food cool or hot as required. Drawers to prevent us from having silverware and dishes, which together eliminate much of the mess of eating, strewn about haphazardly. Forgive us for considering this shameless mass consumption to be better than the alternative. But from our perspective, there isn’t a single possession we can see that doesn’t make life markedly better.

However, possessions can also be wastes of money. You’re not going to believe this, but it depends on the possessions. The CYC principals have enough money to live comfortably, and do, but part of living comfortably is not having a dysfunctional relationship – or any “relationship” – with what one owns.

There isn’t any indication that (products for sale make) anyone any happier; in fact it seems the reverse may be true.

His lemma is provably false. Anyone reading this who has ever driven a new car, or moved into a new house, or even bought a new article of clothing, felt at least temporarily happier than he or she did a minute earlier. Graham Hill was an early internet millionaire, cashed out in 1998, but before getting racked with guilt did what impetuous nouveaux riches do:

To celebrate, I bought a four-story, 3,600-square-foot, turn-of-the-century house in Seattle’s happening Capitol Hill neighborhood and, in a frenzy of consumption, bought a brand-new sectional couch (my first ever), a pair of $300 sunglasses, a ton of gadgets, like an Audible.com MobilePlayer (one of the first portable digital music players) and an audiophile-worthy five-disc CD player. And, of course, a black turbocharged Volvo. With a remote starter!

The most important word in that curious passage is the first important one: “celebrate”. If you’re possessed of a truly wealthy mentality, you don’t buy a house that requires 4 descriptors because you want to “celebrate”. You do it because you:

  • Need a place to live.
  • Can afford it and make it cash flow. Obviously most primary residences don’t generate income in and of themselves, but the idea is to live somewhere that doesn’t make you poorer month-to-month. If you do, you’re buying too much house.
  • Want to set yourself up for appreciation. (Or, you’re so rich that you don’t care. Laurene Jobs’s ostentatious and impractical residence isn’t ever going to be easy to sell, but she doesn’t worry about it. Her house could be annihilated by antimatter, which insurance doesn’t cover, and it’ll barely affect her net worth.)

Remember what we said about possessions being awesome? This post is being written on a $1500 computer that’s thin, portable, fast, aesthetically gorgeous and largely free of bugs. That sounds expensive, but no other laptop can do what it does as efficiently and sleekly. And cheaply.

Meanwhile, Graham Hill paid 20 times what he should have for an item whose sole purpose is to shield your eyes from the sun. As we tweeted last month:

Foster Grants

Graham Hill didn’t just buy stuff: he bought liabilities. Things that serve only to make someone else rich (the local Volvo dealer, for instance) and that erode Graham Hill’s own wealth. Which he can’t see, because he’s too busy wasting money:

I hired a…personal shopper. He went to furniture, appliance and electronics stores and took Polaroids of things he thought I might like to fill the house; I’d shuffle through the pictures and proceed on a virtual shopping spree.

The CYC principals could probably afford a personal shopper (we’re not sure how much they go for, whether they take a portion of the proceeds or a salary, etc.), but don’t.

(My) life (was) cluttered with excess belongings.

Then why’d you buy them? And once you realized that, couldn’t you just sell them? Of course not. Why, when you can be didactic and tell the people without internet windfalls how they can live as austerely as you. Ultimately the crux of his complaint is ecological, but he throws in some Americacentric criticism of elbow room, too:

Our fondness for stuff affects almost every aspect of our lives… The average size of a new American home in 1950 was 983 square feet; by 2011, the average new home was 2,480 square feet… In 1950, an average of 3.37 people lived in each American home; in 2011, that number had shrunk to 2.6 people. This means that we take up more than three times the amount of space per capita than we did 60 years ago

Yes. IN THE 178th MOST DENSELY POPULATED SOVEREIGN NATION OR DEPENDENT TERRITORY (out of 243) ON EARTH. We’re not exactly Macanese here.

Look, Ace. Just because you and 1.6 million other misguided souls decided to cram yourselves onto a 23-square-mile island, that doesn’t mean the rest of us in the remaining 3,541,245 have to or want to apologize for our love of space. Then there’s the obligatory quote from an academic to give Graham Hill’s piece that patina of respectability:

In a recent study, the Northwestern University psychologist Galen V. Bodenhausen linked consumption with aberrant, antisocial behavior.

Let’s peek at Control Your Cash’s most recent credit card statement. (Business account, thank you. But they’re all business accounts.) We’ll try to compare our profligate spending habits to those of Graham Hill, and see where and if we can cut back. These are all the purchases from the past month, with the qualification that they were:

  • for non-food items.
  • for goods, not services, which means they could theoretically fall into Hill’s “excess belongings” category.
  • over $20.

Let’s see…$179.48 for pet medications. But that’s an essential, unless we want feline blood on our hands.

$696.77 for a mattress. But that’s a business expense, because it’s going in a rental property. Renters like latex foam and a single-stage coil design. A threadbare mattress leads to an unoccupied unit.

$131.44 for a windshield wiper reservoir. The old one was leaking and beyond repair. Regardless of Professor Bodenhausen’s stern assessment, we fail to see a link between buying car parts and “aberrant, antisocial behavior.” Then again, we’re not that educated and have trouble operating on so advanced a level.

$25 for a blender.

Graham Hill can go die. Guilt is bad enough, misplaced guilt worse still. Misplaced guilt that’s supposed to inspire commiserative guilt in others is worst of all.

Today, Graham Hill operates on a higher plane. Here’s his variant on the platitude about “experiences” being better than “stuff”:

Aside from my travel habit — which I try to keep in check by minimizing trips, combining trips and purchasing carbon offsets

With the possible exception of “combining trips”, 3 of the 3 actions he undertakes to mitigate the harm he inflicts on Mother Gaia are moronic. Read the first one. He likes to travel, but tries not to travel. And now, instead of spending money on expensive sunglasses, Graham Hill takes that same money and flushes it down a (solar-powered, composting) toilet.

Does this really need explaining? Buy stuff that gets you ahead: or as we call it, “assets”. Buy lots of them. Buy nothing else. Even a $15 toaster might not meet our strictest definition of an asset in that it’s probably not going to appreciate for future resale, but owning one beats holding your bread over a fire pit every morning.

The flip side of the equation is to sell liabilities, or at least not buy them. Graham Hill bought nothing but liabilities, then complained about how they impoverished him (definitely financially, and also spiritually, he seems to say.) There’s no more efficient way to get poor.

Filed Under: Bad Examples, Capitalism, Making Smart Choices Tagged With: , , , ,

Everyone Is Full Of It

February 22, 2013

Let’s start with Gail Vaz-Oxlade of CNBC, who will separate you from $30 if you buy her “Til Debt Do Us Part Life Planner”.

Get it? It’s a pun. Here, we’ll walk you through it: she exchanged “debt” for “death”. It’s not quite as clever as “dollars and sense”, but it’ll have to do.

Why should you buy this?

52 brand new financial tips, variable expense tracking worksheets…and show challenges you can do at home!

Go in your car’s glove box, and look at the manufacturer’s maintenance schedule. It should be right next to the owner’s manual. The maintenance schedule includes a handy checklist of services you should get done to the car at certain intervals, complete with little boxes to fill in. Change oil and filter at 5,000 miles, replace Zerk fittings at 60,000 miles, etc.

How long have you owned your car? Okay, how many of those boxes have you filled in? And yet Gail Vaz-Oxlade thinks you’re going to get excited about “variable expense tracking worksheets.” Lady, if I spent $26,000 on a car and can’t be bothered to show my homework, you’re going to have to charge a lot more than $30 for your life planner.

Just read this nonsense:

lying cow

 

Is there some rule that every letter S in a financial site’s name has to be mutated into a dollar sign?

  • CONTROL YOUR CA$H

There! Are you happy now? No, wait. We can do better:

  • ¢ONTROL YOUR ¢A$H

Come on, that’s money! Get it? Money! Unfortunately, the letter E doesn’t appear anywhere in the name of our site, or we could turn that into a euro sign. Alright, one more:

  • ¢ONTROL ¥OUR ¢A$H

Back to Ms. Vaz-Oxlade. Is she out of her mind? Out of every 10 marriages, 9 of them break up because of money problems? Most personal finance “experts” wait until you’ve read a few pages before subjecting you to falsehoods, but Gail knows the importance of a killer opening sentence.

Oh, come on. What she meant was that 90% of all divorces are related to finances.

Then that’s what she should have said. This is someone who communicates for a living. Poorly. And even that statistic is pure fiction.

Here are a select few of her “10 Tips To Get Out of Debt”, and you can tell what a priority these tips are given that no one at CNBC bothered to remove the HTML tags:

 

tip 1

 

Did you know that? You had no idea, did you? If you’re carrying credit card balances, you should remove the catalyst that enabled such balances, i.e. the cards themselves. Look for the next tip in Gail’s Anthology Of Obvious Advice: “You ran over your kid? Next time, consider making sure that there’s no one behind your Sienna before backing up.”

She didn’t say that, but she did say something equally pointless:

 

tip 2

 

Jesus, Mary, Joseph, the animals in the manger, and all the saints and angels. CNBC has millions of viewers, and the threshold for being paid to talk to them on air is a pulse, a triple chin and an unwieldy last name.

“Hey Lurleen, Gail Vaz-Oxlade has a great idea for us to get out of debt.”
“Really, what is it?”
“She says we should bring in extra money.”

More specifically, she wants you to “consider overtime.”

This reminds us of a taxpayer-funded boondoggle in at least one state, and possibly in yours. Utah sponsors something called the Baby Your Baby program, which tells mothers how to raise their kids.

Using drugs (both legal and illegal) while you are pregnant puts your baby at BIOLOGICAL risk for future behavioral and developmental problems.

If you are pregnant or considering becoming pregnant, help prevent birth defects by NOT using alcohol, drugs or tobacco.

We can use triage here. There are exactly 3 classes of pregnant woman:

  1. Those who wouldn’t dream of smoking, drinking, or shooting up while pregnant.
  2. The kind who’d respond to the suggestion that they shouldn’t partake in unhealthy substances with “I’m a good mother, and f**k you you can’t tell me how to raise my baby!”
  3. Those who would smoke, drink, or do drugs while pregnant, but who will change their minds after being told that such activity might not be in the best interests of their babies.

We’d guess that 90% of mothers would fit in the first category, 10% in the second. Maybe the one’s a little higher and the other a little lower. But one thing is certain: there are zero mothers in Category 3. (And if any do exist, God help their kids.) No one will benefit from the suggestion not to poison oneself while pregnant, because women will either do so or they won’t.

Same thing with Gail Vaz-Oxlade’s minions. Here’s a Venn diagram of her audience, represented by the intersection of the two sets:

Venn

The purpose of Gail Vaz-Oxlade’s useless life planner, and the purpose of her tips, and the purpose of the husky lady herself, is purely to take up space. The people who are in debt, yet who didn’t give working overtime a thought until Ms. Vaz-Oxlade brought it up, don’t exist. No one is stupid enough not to think of overtime, yet smart enough to realize he needs to get out of debt. The two categories don’t overlap on the continuum that has Chris Langan at one end and Mindy McCready Tyra Banks on the other. Here’s more garbage posing as wisdom:

 tip 3

Just like that, Gail Vaz-Oxlade’s advice moved from neutral to negative.

When working your way out of debt you can still spend on things that are important to you, you just need to plan and save for them.

NO. Should we use a bigger font to emphasize our point?

99% of personal finance advice is interchangeable, and 99% of it is false. Again, we at Control Your Cash are the 1-percenters.

Gail Vaz-Oxlade qualifies by writing “things that are important to you”, which should mean food and clothing, but we all know what she’s referring to. (The accompanying photo is a clue.) If you have a negative net worth, you don’t get a wedding. Well, maybe a $75 one at the Justice of the Peace, but with no reception and no honeymoon. Why not? Because you’re in debt. If you believe the axiom “You need money to make money”, which is a practical truth, it follows that debt – the inverse of money – is standing in the way of you making money. Saving for a wedding doesn’t make sense, because if you’re saving, you should be applying it to the debt – which carries interest and thus, left unchecked, leaves you in a bigger hole a month from now than you’re in today. Anyone who can’t see this is too retarded to own a computer. Wait, she’s not done:

tip 4

“Discuss the day’s events and catch up.” Chance that a man wrote that: -60,000%. Maybe, just maybe, sitting down and having to face each other at the end of another negative-worth day is enough to put a couple among that 90% who get divorced. But no, an innocent $9 trip to El Pollo Loco will condemn you to an eternity in debt. Instead, you should have a $20,000 wedding! “You just need to plan and save for (it)”!

Stop believing the nonsense. We don’t have the platform of a fancy TV show with a wardrobe and makeup and everything – in fact, this post is being written pantslessly – but Gail Vaz-Oxlade’s advice borders on felonious. If you’re in debt, live like a Capuchin friar until you’re out of debt. If you eliminate tiny little purchases, e.g. lunch, while justifying gargantuan ones like weddings, you deserve to have what few assets you do possess taken away from you. And stop watching TV. Order our book instead.

Filed Under: Bad Examples Tagged With: , ,

WRITE IT DOWN

February 6, 2013
Go ahead, try and recreate the mirror images of the backs of the embossed numbers. See where it gets you.

Go ahead, try and recreate the mirror images of the backs of the embossed numbers. See where it gets you.

 

A rare financial misstep. It didn’t cost any money, but it was inconvenient. Worse yet, now the folks at Capital One are convinced we’re crooks.

Your humble blogger had a single credit card, an American Express with a generous rewards partner. But as you probably know, not everyone takes American Express, which necessitates getting either a Visa or MasterCard. The CYC checking account card is branded with one or the other, of course, but the idea is to keep as little money in that account as possible. That way, we can put our cash to more lucrative uses.

If we ever need to buy something expensive from a retailer that doesn’t take American Express, we can either

  • constantly remember the updated balance in the CYC checking account, or
  • get yet another card, either Visa or MasterCard, and use it only for big purchases in places where the American Express card is no good.

So way back in the early 21st century, we graced those relentless people at Capital One with our noblesse oblige and granted them the privilege of giving us a card. God knows they weren’t ever going to get any interest payments from us, so we were acting in our capacity as free riders. Let the other Capital One cardholders carry balances, and meanwhile we’ll capitalize on the opportunity to buy stuff now and not have to pay for it for a month.

Maybe it’s our inherent frugality, or maybe it’s the places where we choose to shop, but we went months and months without ever using the Capital One card. It sat there in the wallet, neglected, watching with melancholy as the driver’s license and the National Parks pass and the concealed weapons permits got pulled out daily and went on exciting adventures.

Finally, last month, we had cause to use the Capital One card. And didn’t happen to have any identification at the time, which meant the sales clerk asked for the card’s PIN.

Uh…

1234? No, that’s crazy talk.
0000? That doesn’t work either, huh?

We discreetly paid cash, walked into the parking lot away from prying and suspicious ears, and called Capital One customer service about the little problem with our depleted long-term memory. We offered up the account password, the answers to the security questions (“Madrid”, “sea kayaking”, “July 13”), and our phone number.

Which wasn’t the phone number they had on file. That’s impossible, but they insisted the number was wrong.

After a 10-minute hold, and they probably keep you waiting that long so they can weed out the impatient common thieves who make their livelihood by stealing wallets, a manager got on the line. She asked the same questions we’d already answered, but there was still that pressing matter of not being able to remember that damned phone number, whatever it might have been.

The manager played hardball, asking a new set of questions that no card thief would know the answers to. The trouble was, only the most devoted cardholder would know the answers. For instance:

“What were your last 5 purchases?”

Dammit. The career total of purchases on this card was almost certainly less than 5, and maybe that was the answer she was looking for. Again, no clue, and again, the most recent purchase on the card was sometime during the Bush Administration. If at all.

Even though the other party was in a call center on the other side of the country somewhere, there are few things as embarrassing as being asked to give easy proof of your identity to someone who needs it and being unable to do so. If you think “I don’t know” sounds dumb when your middle school teacher asks you who the protagonist of Animal Farm is, try saying it in response to a question that indirectly requires you to assert whether you are who you say you are.

The manager went to the next test on the list, reserved only for the most obstinate and determined fraudsters. She pulled the credit report and asked, “Who’s your mortgage lender?”

CYC owns a lot of real estate. With a lot of mortgages. Even now, sitting behind a keyboard, it’d take a good 5 minutes to determine which lending institution goes with which property’s note. This is exponentially harder to do from memory.

Chase?
No.

Greenpoint?
No.

Washington Mutual?
No, that’s Chase now.

At that point, your humble blogger might as well have faked the accent of a Taiwanese Triad member who’s pretending to be an absent-minded cardholder who happens to have a Gaelic last name. It wouldn’t have worked, but it would have been less humiliating. The manager hesitated, the disdain in her voice unmistakable. We can only wonder if she wasn’t triangulating the position that the incoming call was originating from, and getting ready to sic Treasury Department agents on the offender.

Area Man Brought Down In Hail Of AR-15 Fire After Attempting To Buy Furniture With Stolen Credit Card

“Look, I don’t have that information handy. Let me get home, in front of a computer, and I’ll call you with it.”

Even now that sentence looks ridiculous, though every word of it was sincere.

Hours later, the incident had passed into the same memory landfill that got us into this predicament in the first place. Just plumb forgot about it, and got on with other things. Until several weeks later, when wouldn’t you know it, another perfect storm formed: big-ticket item, limited cash, retailer who doesn’t take American Express.

CARD DECLINED.

There was no outstanding balance of course, nor anything like that.

Went home, fired up the Capital One account page, took a deep breath, poured a stiff drink (fruit punch Gatorade) and called the 800 number. Our uncomfortable phone conversation of weeks earlier had doubtless been flagged in Capital One’s customer service database, with all sorts of red-font exclamation points and asterisks.

An agent answered, and pushed us up on the same treadmill as before. If you offered $1 million right now, we couldn’t tell you what freaking phone number they’d mistakenly attached to the account (which is clearly their fault, not ours, right?)

The agent explained that at this point, the only way to convince Capital One that we weren’t pulling a fast one would be to fax them a copy of

  1. Driver’s license, which will always show up clearly and legibly in a fax
  2. Social Security card, which disappeared 13 years ago
  3. A utility bill, which wouldn’t do any good anyway because all the utility bills are under the name of a Control Your Cash limited liability company instead of an individual’s name.

Oh, and items 1) and 3) are 3000 miles away right now, at the summer home. (Yes, there are separate summer and winter homes. You could be in the same situation too, if you bought our book.) This whole process could take 7 to 10 business days.

At this point, there was only one prudent thing to do. (See picture above.) Now we have to apply for another card from another issuer, and explain why we had to close our last account and/or let it lay dormant. All because we couldn’t remember some stupid string of digits.

Folks, do yourself a favor. Write EVERYTHING down. Even the stuff you think you’re never going to use. Create a document or a note on your phone. Or better yet, a contact in your list, and name it “Passwords and security questions” or something. Then, answer with glee and conviction when a suspicious Capital One customer service rep implicitly asks you to prove you didn’t steal your card. You’ll save yourself plenty of aggravation.

Filed Under: Bad Examples, Credit Cards Tagged With: , , ,
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