Hunter Mahan Has Too Much Money

July 31, 2013

 

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This is Hunter Mahan, who was leading the Canadian Open after 2 rounds this past weekend. The winner of the tournament gets $1,008,000.

He withdrew from the tournament to be with his expectant wife. (If he’d withdrawn 9 months earlier, he wouldn’t be in this situation in the first place. Hey-oh!) Mrs. Mahan, we gratuitously mention, used to cheer for the Dallas Cowboys before advancing to the next occupation in the hierarchy, full-time adornment. Also, her name is Kandi. Not “Candy”, or even “Candi”, but “Kandi”. To be with her, Mahan had to fly from Toronto to Dallas-Fort Worth and then, presumably, heroically run through the hospital lobby to the maternity ward while a stern woman behind the information desk yells at him to remove his cleats because he’s destroying the linoleum.

Mahan is not an obstetrician, a nurse, a midwife, nor even a doula. But unlike those licensed professionals (and dubiously accredited charlatans, as the list progresses), Mahan does have an incredible talent for earning gigantic chunks of money in very concentrated periods. He was halfway to doing that this weekend, when contractions won out over contracts.

Again, $1,008,000. Not that leading after 2 rounds means he was necessarily going to win, but unless he were to suffer a Jean van de Velde-level meltdown, Mahan would be walking away with at least a few hundred thousand dollars. Instead he just up and quit, which did win him the non-monetary approbation of moonstruck women everywhere.

There have been previous instances of athletes taking inopportune days off to be with their pregnant wives. 20 years ago an NFL player missed a regular-season game and had to forgo $111,111 in salary. The culture has since softened considerably, and prioritizing the family’s paycheck now seems less-than-chivalrous. And increasingly uncommon.

That aside, the difference between Mahan and team-sport athletes is that the former isn’t on salary. Mahan can sit out all the tournaments he wants, or withdraw halfway through, without affecting any teammates or compromising anybody’s won-lost record. As long as he didn’t plan on winning, that is.

Let’s assume Mahan would have fought off the field and indeed won the Canadian Open. His wife would then have had to give birth with only trained medical staff and maybe her mother (if she’s sufficiently meddlesome) by her side. We’ll concede that Mahan might have provided some psychological benefit to his wife by being in the delivery room. And no, you can’t put a price on love.

Except you can, or at least on this particular manifestation of it. Again, $1,008,000. Instead of calling Mahan a selfless hero and the greatest husband ever, let’s assess this objectively. Is he really?

Go to your local community hospital and find one of the mamacitas ready to drop an anchor baby tonight. Oh, what the hell, you can even talk to an upwardly mobile U.S. citizen who’s about to give birth. Find one whose husband is standing around acting nervously while trying not to look useless as he awaits his escort into the delivery room. Then, offer the couple $1,008,000 on the stipulation that the husband leave the hospital and not return for 2 days.

Anyone who wouldn’t take the money is a prevaricator at best. Not just anyone of normal means, but literally anyone. Even Rupert Murdoch, who for some reason fathered his 6th child at 72 a decade ago, would have gone home and taken the money.

Is Hunter Mahan that rich? He’s not Murdoch-level rich, but he’s doing more than pretty well for a 31-year-old. His career earnings are $24 million, and with this year’s tour half over has won $2.3 million. Could have been $3.3 million, but what’s done is done.

Granted, a $1 million windfall means slightly less to a man who’s earned $24 million in his short life than it does to most of us. But that’s beside the point. Denying yourself money because of a relatively unimportant* non-monetary urgency shows a gross misunderstanding of what that money can do. It’s not as if Mahan had to pay a $1,008,000 ransom to get Kandi back from Sri Lankan terrorists. That would at least make sense. But refusing a 7-digit payday to fulfill some loosely unwritten social contract is bad parenting and bad husbanding to boot.

How much is it worth to show up in the delivery room and hold your wife’s hand when someone else can do it? Is it worth $1,008,000? Think about what the Mahans could have done with the money.

Everyone loves to acknowledge that a) there’s nothing more important than a college education and b) it can be a challenge to pay for one, right? What if by missing the birth of his child, Mahan had thus eliminated 4 years of tuition and boarding concerns, 18 years down the road? With tons of money left over, no less? Mahan could have bought an ostentatious house for…well, somebody, if not his wife and new kid. Instead, tournament winner Brandt Snedeker will get to make that decision instead.

If money accosts you on the street and says “Put me in your pocket” – or, less figuratively, requires you to spend your weekend protecting a 2-stroke lead – you’ve forfeited the right to ever complain about your financial situation again. Again, this wasn’t 100. This was 100 cubed. Part of the blame here lies with Kandi, who has now become so acclimated to luxury without concern that she didn’t say, “Hey! What are you doing? Get your butt back to Ontario and make us some money!”

Mahan’s hat sponsor Ping had nothing but accolades for Mahan. But we’re willing to bet that CEO John Solheim is secretly seething at seeing the Bridgestone logo atop Snedeker’s head as he hoisted the trophy Sunday afternoon.

 

*Yeah, we said it. He didn’t need to be there. 

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

Control Your Cash Mailbag!

June 26, 2013
Financial freedom for the price of a stamp

Financial freedom for the price of a stamp

Real letters from real readers. Send yours to info @ ControlYourCash . com.

Dear CYC:

My fiancé and I are getting married! We know that destination weddings can get expensive, so we’re going to do it close to home. The problem is that he and I can’t come to an agreement on some of the most basic parts of the wedding. Like the venue. I want to hold the reception at the ballroom in a local 5-star hotel ($12,000), while he wants to do it at his father’s yacht club ($13,000, but my fiancé claims the view of the lake is awesome and there might be a party boat involved.) Which do you think is better?

Sincerely, Melinda in Broken Arrow

 

Dear Melinda:

None of the above. Either is a giant and needless expense.

Here’s how you do a wedding, assuming you’re not a trust-fund punk. First, go to the county clerk and get a marriage license for $60 or however much it costs. Then pay your priest/minister/rabbi whatever his going rate is, which is probably not that much. Finally, hold the reception at one of your parents’ houses. If your mother and mother-in-law want to help they can go to Costco and buy those giant packs of hors d’oeuvres.

One more thing. It’s probably too late for this, but don’t register anywhere. Find a tactful way to say “cash gifts only” to your invitees. One way to handle that is to just say nothing, and when they realize you aren’t registered they’ll probably take it upon themselves to discreetly hand you an envelope at some point during the evening. You might even end up making a profit on the deal. But yeah, do it on the cheap. This is one place where frugality makes tremendous sense.

 

Dear CYC:

My fiancée is driving me crazy. She’s already made a non-refundable $6000 deposit on a ballroom for our wedding, and let’s not forget the $5000 I spent on an engagement ring. I make $40,000 a year. And now we’re – I wouldn’t say arguing, but heatedly discussing such details as the wedding invitations. Did you know engraved vellum paper goes for $1.50 per invite? Multiply that by 200 and you can see what just one of our problems is. Beef medallions on the dinner menu vs. chicken for $1 a plate cheaper, it never ends. What do I do?

Sincerely, Brian in Broken Arrow

 

Dear Brian:

$11,000 in sunk costs already? Man. Another $7 won’t kill you, so you should buy our book and figure out how to build wealth instead of destroying it.

Also, it’s 2013. Why are you sending invites via any medium other than email? You know how much an email invitation costs, right?

Are you going to be one of those couples who never talk about money until it’s too late? It’s cool if you are, just know that you’re already well on the path to sitting across from each other at the kitchen table a couple years from now, she furrowing her brow and you staring at the readout on a Casio printing calculator, wondering why you’re so broke and whether you’ll have to move into a studio apartment once the baby arrives.

 

Dear CYC:

Well, your advice is certainly condescending. And unrealistic. You seriously expect me to have a discount wedding? Should I get my dress from Goodwill while I’m at it? Maybe you don’t understand how important this is and how deep our love for each other is. My wedding is going to be THE most important day of my life, and the idea of it being no more ceremonial than a Super Bowl party is offensive to me. I asked you a simple question about one venue vs. another and instead you start pontificating. Thanks for nothing, ass.

Sincerely, Go to Hell

 

Dear Melinda:

Why did you ask for advice if you didn’t want advice?

Let’s do this Socratically. Would you say that most people a) worry about money, or 2) live with the freedom of knowing that they have sufficient cash flow and a big enough nest egg to see them through anything – financial independence, to coin a phrase?

This part of our conversation is unilateral, but we’ll answer for you. Obviously the answer is a). We’d guess that they outnumber the people in the other category at least 9 to 1. Now…would you believe, or at least be open to believing, that there might be a correlation between the plurality of people who have traditional weddings, and those who end up in the first category?

This is the ultimate in short-term thinking. Your wedding day. DAY. Singular. One of maybe 25,000 you have ahead of you. Why on earth would you focus all your attention, and undue money, on a single day when doing so means hampering your ability to build wealth over the remaining 24,999?

If your answer is “Because every girl dreams about her wedding day and I’ve been fantasizing about this since I was playing with Barbies,” then you’re a moron. It’s a non-repealable law of the universe that you can’t have it all. Everyone has to make choices. Even the biggest individual expenditures are done with respect to other possible outlays. Carl Icahn just borrowed $5.2 billion to attempt to take over Dell Inc. He didn’t go for Lenovo, or Acer, or even a company that does something other than manufacture computers. Icahn thinks that’s the way to get the best return for his (or his lenders’) money, so he acts accordingly.

We know what your objections are before you make them. How can we compare something as cold and utilitarian as a business deal to the magic and emotion of a wedding day? Because whether you choose to accept it or not, when you indebt and/or impoverish yourself to get married, there’s still a transaction. Multiple transactions. And as far as the people on the other side of them are concerned, business is business. The wedding planner, the hall, the florist, the caterer, the DJ etc. all get paid. In money. By you. And your heirs, if you let your bills sit long enough.

Also, the math doesn’t work out. You’ve got at least a 40% chance, conservatively speaking, of getting divorced. Yeah, we know. You two are different. (Also, we don’t know why the Centers for Disease Control with its $11.3 billion annual budget, an agency originally created for the narrow purpose of fighting malaria in the Southern United States, ended up being the nation’s official recordkeeper of marriage and divorce statistics.) An average wedding costs around $26,000. Even the most degenerate gambler in the world wouldn’t place a $26,000 bet on a game where there was a 40% chance of losing it all and a 60% chance of…well, still losing it all.

It is astonishing how many adults we meet who insist on handicapping themselves at the onset regarding money. Everyone with even a passing interest in personal finance will tell you how important it is to save early for retirement – why, if you just sock away an extra $10 a month starting when you’re 21 instead of waiting until you’re 40 you’ll have a billion more when you turn 65, or something. Yet none of these people will advocate something more obvious and even more impactful: Not blowing $26,000, and forgoing the assets that that could buy.

Still, most people aren’t going to listen to this. For a completely unrelated reason, most people aren’t wealthy.

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

You’re A Crucial Part of This Team

June 14, 2013
"I can't fire a broad. Looks like you got the short straw, Justin."

“I can’t fire a broad. Looks like you got the short straw, Justin.”

Another Control Your Cash® patented one-sided conservation question, one-sided since we don’t bog our site down by allowing comments. So you’ll have to answer in the comfort of wherever you’re reading this (home, maybe an airport, hopefully the office – the last of which we’ll elaborate on in a second.) The following question is not, repeat, not, rhetorical:

All things being equal, to the extent that they can be, would you be more or less inclined to work for a company whose official policy includes some variation of the following declaration?:

Employees are our most valuable asset(s).

If you answered ‘More’, there’s lots to unlearn.

“Employees are our most valuable assets.” Think about what that means. The company is profiting off them more than it is off the net receivables, or the cash and cash equivalents, or the property, plant and equipment, or any of the other assets that are supposed to stimulate cash flow and enrich the owners. $45,000 in inventories, if sold at a 100% markup, and subtracting a few dollars for warehousing costs, might realize a profit of $40,000. Meanwhile $45,000 paid to you, the deputy assistant regional manager, might realize a profit of $50,000 if you move enough product and work enough uncompensated overtime to impress the assistant regional manager: the guy whose job you claim you want to have one day.

Any company that tells you that you’re among its most valuable assets and expects you to take it seriously is patronizing you. The kind of employees who are dumb enough to swoon from and find validation in a timeworn line specifically written to make them feel that way are, self-fulfillingly, indeed pretty valuable assets. Because if being told you’re important makes a difference to you, you’re probably underpaid. Because you think you can eat non-monetary, psychological rewards such as compliments.

You negotiate in plenty of other aspects of your life, right? If you comparison shop, then you’re negotiating, kind of. You certainly wouldn’t buy something expensive like a car or a house without looking around and trying to get the seller to come down as much as is prudent. Well, what kind of lunatic determines which supermarket sells the cheapest per-unit laundry detergent, and maybe even uses a coupon, but doesn’t care how many tens of thousands of dollars her employer is making off her? (And then try to whittle that number down a little?)

Your value to your company is measurable. Of that value, or of the revenue that derives from having you around, you keep some and the rest goes to your employer. This is so obvious that it’s easy to miss, yet almost everyone does. Employees think that a salary is a product of an initial round of mediation held during an interview. Some think it’s even less complicated than that, and that a salary is simply what the employer deigns to pay you. It isn’t. Once again, it’s the difference between what you bring in and how much of that the employer decides to pocket. Even Karl Marx understood this, and Marx was one of the most overrated thinkers of all time. (Come to think of it, this was about the only thing he understood.)

Finally, as investors we could give a damn about any company that claims that its employees are #1. Your customers should come first. Well, your investors should come first, but that usually implies having customers. Satisfied ones, repeat ones, as many as possible. Brinker International, parent company of Chili’s, generated $2.82 billion in revenue last year. You know what its “most valuable assets” are? Hint: Not the flair-wearing hostesses and servers, thanks.

The beer kegs. Each one contains about 140 pints, which the restaurants can sell for 3 or 4 times what they paid. Few employees offer that kind of return, and if they could, they’d be crazy not to demand far more money. Beer kegs can’t negotiate. Nor can the soda fountains, which offer an even greater profit margin, albeit on smaller volume.

It’s like politicians who say “children are our most valuable resource”, a proverb which was cloying if inaccurate back when people started saying it in the 1970s, and which should only incur scorn today.

From an employee’s perspective, you want the profit margin on you to be as low as possible. Not so low that it costs money to keep you around – in which case the sensible thing to do is fire you – but low enough that you’re earning a lot relative to your value.

Every commodity – beer, soda, cigarettes, labor – has a markup. People think that the last one shouldn’t be on the list for some reason, or that jobs can’t be quantified and subjected to cost-benefit analysis the same way that non-human assets can. But of course they can. No employee has ever been fired because he made too little money. In fact, the opposite is true. Employees who make “too little” (which, obviously, management would never cop to) are instead held up as emblematic of something larger: the “valuable assets” worthy of mention in the company mission statement. Or vision statement, whichever. Meanwhile, every hour of every day some employees somewhere get fired because management can no longer justify their salaries. Short of stealing company secrets or having sex on the photocopier, overpayment is the #1 reason for being let go.

With the possible exception of pack animals, no asset was ever more valuable than a slave. You got your cotton picked, you got musical entertainment, and you didn’t even have to pay a living wage.

Filed Under: Capitalism, Healthy Living, Making Smart Choices, Math Tagged With: , , , ,
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