We’re scrapping the ads. And therefore raising the viewing price.

July 25, 2011

The anti-capitalist manifesto from Macmillan Publishers, a division of the $2 billion Georg von Holtzbrinck Publishing Group. Oh GOD I hope Naomi Klein sues us for unauthorized use of the No Logo logo.

Just kidding, we aren’t. Nor would we. Nor would such a move do anything but reduce our readership, which is something we’re trying to take in the other direction, thanks.

People love to complain about advertising – not about its artistic or propagandic merits, but about the medium itself. It’s intrusive. It’s unnecessary. It’s wasteful.

No, commercials make stuff awesome. Banner ads, too. If you’ve got the space, monetize it. Your business, whether home-based or otherwise, needs to generate all the revenue it can. If you think that’s going to somehow compromise your soul, you don’t know what a soul is.

It's disgusting. Look at that intrusive Riddell logo, ruining everything and commercializing the sanctity of sports. Is it so important that they emblazon their name on their product? After all, the product's already been sold. Americans really are the most shamelessly media-saturated people on Earth. I weep for us as a nation.

 

See, the Brits have it right. Here we see AIG's own Wayne Rooney, who plays for the Nike Red Devils, sponsored by an entity called Manchester United, which is a local airline or trucking company or something.

Commercials make television (essentially) free. They make magazines really cheap, assuming you’re among the dwindling few millions who read magazines. For instance, Time sells for $5. Apparently 3.3 million people still read Time, which is an amazing enough superlative in itself, but here’s an even bigger one: 75% of Time’s revenue comes from advertising. So if you removed the ads, you’d be left with a magazine that would a) run about 30 pages and b) have to sell for $20 to generate the same revenue.

If Time sold for $20, Time wouldn’t sell. We may complain about advertising, but it makes things cost less.

We preach again and again at Control Your Cash the wisdom of being a free rider. Free ridership means letting credit card companies charge whatever interest rates they want to the people willing to pay them: and while they do that, you can be the person who enjoys the convenience of buying things while not having to pay for them for up to 60 days (while earning rewards in the process.)

There are myriad ways to be a free rider (or at least, a discounted rider.) You do this every time you buy a coach airline ticket. Laugh or look disdainfully at the people in first class all you want, but you should be kissing their rings: their overpriced tickets subsidize your underpriced ones, letting you fly for less than you otherwise would. For another example, supermarkets historically sold milk at less than cost, the strategy being that if they kept it in the far corner of the store you’d be tempted by all the high-markup items on your way to find the cheap milk.

Wikipedia (heck, most of the internet) works the same way. Enjoy the free content, while letting others donate.

(Save your comments. This isn’t an ethical issue, and it’s not stealing. Wikipedia’s managers don’t charge to access the site, and no one ordered them not to. Same deal with the Corporation for Public Broadcasting.)

The Time magazine numbers above were largely estimates, albeit ones we researched. Here’s an example of an advertising subsidy that we can calculate to the penny:

The entry-level Amazon Kindle (yes, we’re mentioning it again) sells for $139 at the only place you can buy it, Amazon. They recently came out with an ad-supported version for $25 less. Apparently the phrase “ad-supported” didn’t test well, so they went with the indirect “Kindle with Special Offers” instead.

Amazon had a lot of leeway with ad placement – they could have stuck a full-screen ad between every two pages of a book, or put a rotating banner at the bottom of each page. Instead, they didn’t even do as much as that. The advertising consists of just a screen saver (which doesn’t even show up until you’ve gone 10 minutes without touching the Kindle), and an unobtrusive banner on the main page.

Commercialization is nothing to apologize for. If your school district is hemorrhaging money, which it is, why not bring in extra cash while making no fundamental changes? Heck, even the freaking Grand Canyon comes with the occasional subtle and suitably placed corporate logo.

And you know what? Not only is it not the end of the world, it frees up capital to go in places where it can do some good. The more money this site makes, the more inclined we are to write good posts. And keep you coming back. And bringing your friends. And increasing our readership so we can charge more for ads.

(Thanks to our wonderful sponsors – CorpNet, Cash4Laptops, Amazon, Shoeboxed and more. That’s Shoeboxed, digitizing your receipts and other documents since 2006.)

**This article is featured in the Yakezie Carnival-Best of Yakezie this week**

Filed Under: Capitalism, Finance, Making Smart Choices, Personal Finance Tagged With: , , , , ,

“Your health is the most important thing.” Uh-huh.

July 15, 2011

Every d-bag in this picture (the "d" stands for "dirt") thinks he or she is rich.

A few weeks ago, the popular personal finance meta-blog Yakezie held a contest for students, asking them to define richness and answer related questions. Even though our studyin’ days are long in the past, we decided to write an essay anyway and modify it for you folks. If this doesn’t spur some comments, nothing G-rated will.

Do you think becoming rich is easy or hard in America?  Please explain your viewpoint.  
What is rich to you?  Is it a dollar amount in the bank, a lifestyle, or perhaps even a state of mind?  
The United States is the richest country in the world.  Will there always be poverty?

In the fashion of a corporate customer service department, let’s answer these questions in the order in which they were received.

Becoming rich in America is easy – maybe not easy in absolute terms, but the qualifier “in America” implies that we’re to compare getting rich here relative to getting rich elsewhere.

In the vast majority of the world, getting “rich” means capitalizing on influence and heredity. The most motivated, diligent, dedicated Kyrgyz camel tender or Mozambican copper miner can’t get rich in any meaningful way that we in the Western world understand the term. The opportunities for entrepreneurship just don’t exist elsewhere, for the most part.  The opportunities for joining the governmental apparatus and perpetuating it abound, however. (But only if you’re connected.) And while the United States still has its share of nepotism, red tape, political maneuvering and corruption, it’s nothing compared to what goes on in the rest of the world.

Your humble blogger has a slightly different perspective, having been born and raised elsewhere and only arriving in the United States at the age of 25. When I did I had no money, nor did I have any connections – unless you count the hotel waiter I’d met in Miami a couple years earlier who let me crash on his couch when I first emigrated*. My dreams were modest, but they were distinctively American: make enough to achieve financial independence, ideally on my own and without having a boss breathing down my neck.

So what is rich to us? You’re not going to hear us give some bromide about it being health and good friends, or any of that crap. This isn’t a box of Kashi cereal. If non-monetary criteria are what make people rich, then everyone’s rich, and therefore no one’s rich because “richness” loses its meaning.

“Rich” as we define it means not having to worry about worrying about money. It means having assets that routinely outpace liabilities. Beyond a certain level of subsistence, that’s all anyone can hope for. If you gross $100,000 a year, spend money on everything you could possibly want and need and have $20,000 remaining at the end of the year, and can apply that to the following year’s assets, you’re rich. If you make $5 million and have a $6 million hooker-and-heroin habit, you’re poor.

Will there always be poverty? Again, it makes all the difference in the world whether we’re talking in absolute or relative terms. Our poorest acquaintance lives far more lavishly than John D. Rockefeller ever dreamed of. She can communicate across the world instantaneously. She can control the temperature of her dwelling with the press of a button. She can travel at speeds that the richest people of previous generations couldn’t fathom. For pennies a day, she can ensure that her teeth will stay strong and not fall out of her head. She can eat thousands of calories daily without having to spend time doing the backbreaking labor of growing the food herself. Or even cooking that much of it.

So yes, there will always be “poverty” in the sense that someone will be at the bottom – even though that bottom has risen throughout the history of civilization and will continue to. Is that a bad thing? Not if the alternative to having some at the bottom is to have everyone at the bottom. It’s important to remember that everything is transitory. The vast majority of people in the lowest quintile of income don’t stay there long: it’s more a function of the point a “poor” person’s at in his or her life – just out of school for instance, or unmarried and pregnant with one’s sixth baby – rather than a permanent condition of status. Both Control Your Cash principals were poor by any modern definition at 19. And are probably rich by most people’s definition a couple of decades later. We wouldn’t have changed any of it to have lived under circumstances where the opportunity to fail and be poor wasn’t available.

*No, it wasn’t the follow-up to a torrid homosexual tryst. Just because a guy sets foot in Miami doesn’t mean he’s gay. You people are perverts.

**This article is featured in the Yakezie Carnival-Best of Yazekie this Week**

**This article is also featured in the Baby Boomers Blog Carnival One Hundred-second Edition**

Filed Under: Economics, Healthy Living, Making Smart Choices, Personal Finance Tagged With: , , , , ,

Public Enemy #1

June 20, 2011

 

Anthony and Mrs. Weiner during gayer times, apparently at the Mauritius Independence Day parade

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This is the problem with our economy, right here. Get ready for the one Anthony Weiner piece that has nothing to do with sex. Or sexting. Or sextuplets.

The man pictured above, as you probably know, is America’s newest ex-congressman. Some embarrassing details recently came out about him, each revelation more damning than the previous one, culminating in by far the most shameful one of all. From the London Daily Mail:

Anthony Weiner owes between $10,000 and $15,000 on his American Express card.

This man was entrusted with 1/435 of congressional spending decisions. Considering that the current year’s budget sits at $3.8 trillion, you could argue that Weiner was responsible for spending $8.8 billion of your money.

Read that again: a man with a 5-digit credit card bill was making financial decisions for you and me.

It gets better. Over each of the last three years he averaged more than $700 in parking tickets. Well, that’s how much he averaged in unpaid tickets. We’re not sure how many parking infractions he incurred and actually paid for. Weiner also committed fraud by placing the registration sticker for one of his cheaper cars on his more expensive SUV.

The story implies that Weiner owns at least 3 vehicles. While living in a two-person household. And carrying up to $15,000 in American Express debt. (Not sure if he has other cards.) As to why someone who lives in the most urbanized part of the country and doesn’t have kids is driving a Nissan Pathfinder (current models run about $30,000), you’ll have to ask private citizen Weiner.

Maybe he paid cash for all the cars, and isn’t carrying any monthly payments. And maybe he and his wife have a healthy marriage, too.

And – we’re so not done yet – that part about not having kids? Weiner recently announced that he and his wife of a year are expecting a child. A fortuitous announcement, made a couple of weeks ago, because the pregnancy status of congressmen’s wives is routinely of interest to the nation. Good for the Weiners, though: when you’ve got a large liability on your books, one that’s costing you probably 19% interest, that’s the time you want to create another mouth to feed. (Never mind that Weiner will be in his mid-60s when the kid graduates high school.)

Look at the details of his expenditures. See those monthly processing fees? Weiner was paying for the privilege of spending his own money – money he collected as a servant of the United States taxpayer.

If you’re on the fence about leaving a comment on today’s post, leave one in response to the following question: What would be the harm in requiring candidates for Congress to carry zero credit card debt? Or at least in requiring them not to be paying processing fees, which are among the most idiotic and unnecessary expenditures a person can incur? Such a requirement would never become law, because the mice are in charge of the cheese, but still.

A man in his mid-40s, with zero dependents (his wife has a full-time job), and a (useless, political science) degree from a state college, making a six-digit salary, and this is what his personal finances look like.

That Weiner’s inability – no, refusal – to build wealth and take responsibility for his finances barely warranted a mention during his recent story arc in the news is yet another symptom of a fatal disease. His negative cash flow isn’t even remarkable by congressional standards. And again, every sentence in this post could be followed by the following: he’s partially responsible for authorizing federal expenditures.

If you’re nonchalant about your credit card bills to the point where you’re incurring processing fees every single month, many of them in the high triple-digits, while incurring parking tickets regularly and buying more cars than you can possibly drive, why on earth would you bother being judicious when spending other people’s money?

Weiner represented less than ¼% of the problem, too. His ilk remain and continue to spend taxpayer money at uncontrollable (and uncontrollably accelerating) rates. It bears repeating that every dollar confiscated from taxpayers doesn’t only carry the potential to be wasted, but reduces the taxpayers’ own autonomy proportionally. That’s one fewer dollar that could have been invested back in the economy as its original owner saw fit. Meanwhile, the congressman who carries no credit card debt, earns money by providing a legitimate service in the private sector, doesn’t draw a pension on principle, and refuses to let his kids put taxpayers on the hook by financing their educations via student loans, is beyond rare.

Weiner can find money when there’s a sufficiently important purpose in the balance, however. He had somehow managed to scrounge up $3 million for a run at a forthcoming New York mayoral race. The people get the government they deserve, indeed.

**This article is featured in the Carnival of Personal Finance #315: Bring on the Long Weekends**

 

Filed Under: Bad Examples, Consumer Debt, Credit Cards, Making Smart Choices, Personal Finance Tagged With: , , ,
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