Net Worth And Lipidity

August 17, 2012

“2 more reps, and I’ll let you think there’s a chance that someone like me would ever ask you out.”

 

We recently discovered this awful place called Planet Fitness, which demonstrates how financial objectives can sometimes get in the way of more important ones. (Yes, we just admitted that some things are more important than money. Not many, mind you.)

We’ll get to the personal finance aspect of this in a second, but first the non-financial parts. Planet Fitness is a gym chain that, while we weren’t looking, opened up over 500 locations across the country (including 3 in our hometown, no less.) The chain recently entered into a sponsorship deal with NBC, where it’ll serve as the home gym for some show about fat people trying to get thin.

Last month we wrote about free riding, and how the unmotivated members of a gym chain (or any other membership business) subsidize the frequent users. Planet Fitness found a way to get even more money out of the clichéd husky bunch who sign up for gym memberships every January 1 and then disappear. Those folks were great for an annual shot of revenue, but there had to be some method of getting them to come back throughout the year without having them run the risk of improving their bodies even slightly.

Planet Fitness’s secret? Pizza! And candy! We are so, so not joking. Get a load of this, and if you think it’s an Onion News Network parody, you wouldn’t be the first:

 

 

Here’s a partial transcript (FF to :45):

Member: One of the best parts about the gym is the Tootsie Rolls.

Manager, who looks like he could use a real gym himself: …Let (members) know that fitness doesn’t have to be this serious thing, “Oh my God, I’m going to the gym, like, I’m going to have to work out, it’s going to be awful”, like, you can come, you can have fun, you can reward yourself for what you’re doing here.

Yes, because that’s how fitness works. Expending sufficient anaerobic and aerobic effort entitles the subject to consume fuel that makes it harder to further expend said effort. That’s why Usain Bolt has 4 chins and a belly, because after he works out he “reward(s) himself for what (he’s) doing”.

At Planet Fitness, if you do a set of exercises to failure (the only non-pharmaceutical way to tear muscle so it can build back stronger) and drop your weights to the ground, or make the guttural noises that naturally accompany exerting one’s body and recalibrating its limits, doing so will set off an alarm on the gym floor. (Again, you think we’re lying. 5:10 on the video.) The alarm sounds like an air raid siren, is 8000 times more annoying than any grunt could be, and of course is designed to get the attention of the other members who are meandering through their low-impact visits.

Which would be reprehensible on its own, but it’s made far worse given the perfect irony that Planet Fitness bills itself as a (and has even registered the trademark of) Judgement Free Zone®.

This is utter genius. Planet Fitness took a bogeyman – the nonexistent catcalls fat people suffer at the hands of healthy people in real gyms – and turned it into cash. That’s in addition to the other ludicrous things those fat people believe about fitness, including and not limited to:

  • Getting fit is easy and fun
  • Quantification means nothing. If you think you’re fit, you are. (It almost goes without saying that Planet Fitness doesn’t have scales, which is like a doctor’s office not having blood pressure monitors.)
  • A gym that offers its customers pizza and Tootsie Rolls, and doesn’t even charge them extra for it, is sincere about getting its fat members to lose weight.

Planet Fitness’s target audience is convinced that legitimate gyms have created a culture of intimidation. In these members’ solipsistic minds, should any of them walk into a gym where strong and healthy people are working out, those same people will stop what they’re working on to point at and make fun of the pasty and flabby newcomers. (Doubling down on the irony, Planet Fitness offers tanning booths.)

The truth, of course, is that the pasty and flabby newcomers – Planet Fitness’ bagels and butter, as it were – create any culture of intimidation themselves. When they’re surrounded by beautiful people who have worked to sculpt firm physiques, they feel inferior. The Control Your Cash principals have spent much of their adult lives in gyms, and have yet to see anything similar to a reenactment of the Charles Atlas sand-kicking scene. Quite the contrary, in fact. For the most part, the most diligent gym members are only too happy to share their routines with aspirants.

But lies are more palatable than the truth, even without a schmearof cream cheese. Marlboros really are light. Corona really will turn your life into a beach. Lucky Charms really can be part of a complete breakfast. Planet Fitness has exploited this defect in the human mind, this wanting so badly to believe, to the tune of millions of dollars.

A membership is $10 a month (with a $29 signup fee), but that restricts you to a single location. A perversely motivated member could attempt to make it back in pizza. $20 a month ($39 signup fee) lets you travel. These memberships are quoted monthly but assessed annually. Activate 2 alarms, and you risk forfeiting your membership. Cancellation fees start at $58. You have to cancel in person or by certified mail, which for most fat people is going to be more embarrassing than passively authorizing another series of credit card payments.

If you want to be part of the exploitation, buying a franchise requires $500,000 in liquid assets and $1.5 million net worth.

“You get what you pay for” is an ancient observation, but it always fits. If you’re weak (in multiple senses of the word), Planet Fitness will gladly take your money and perpetuate the belief that lets you think you’re doing something tangible for your body while paying for the privilege. Other gyms will give you a venue in which to actually improve/maintain your body. Or if you’re the New Year’s Resolution type, a venue in which to subsidize the folks referenced in the previous sentence.

Exploiting the poor, gutless, naïve, gullible, stupid and self-defeating is part of the human condition. It will never change, and only a fool would think otherwise. Does that mean you have to either exploit or be exploited? Not directly. You don’t have to peddle snake oil, but you don’t have to buy it either. That being said, if other people are going to buy it, you can use that to your advantage. (See our comment about buying Altria stock.) Thus it goes for something as tangential to personal finance as personal fitness. Find out where the dumb people are throwing away their money (at Gold’s, 24 Hour Fitness et al.) and ride on their back fat.

Filed Under: Bad Examples, Healthy Living Tagged With: , , , , , ,

Financial Retard of the Month

August 26, 2011

Time for a new feature on Control Your Cash, where we’ve taking to scouring the internets to find personal finance bloggers we can hold up as examples of what not to do with your money. We’re thinking of doing this weekly, although we could probably feature a different retard every hour.

Our heroine (artist's conception)

Today’s honoree is Sallie’s Niece, who lives in New York state and is busy creating an anti-nest egg. (NOTE: We’re not providing links. She doesn’t need the traffic from a popular blog like ours. But you really should witness this foolishness firsthand.)

Her disclaimer (everyone has a disclaimer, except us) starts off with the funny:

I am in NO way qualified to answer any financial questions

You’ll find out why shortly. The “Sallie” in question is Sallie Mae, the money-losing boondoggle that enables people ostensibly on the cusp of adulthood to defer productivity for years if not decades. To hear the niece in question describe it, 



I’m a 30 (gasp!) year old professional woman struggling to pay off my student loans, live on a budget, and plan for the future.

Here at Control Your Cash, we’re old enough to remember when “professional” meant something. It meant that you were a doctor or an engineer, not that you simply had a job.

Guess how many student loans this financial drain took out? Remember, she’s an individual, not sextuplets.
SIX. Six freaking student loans. Including a law school loan that she managed to pay off. We’ll let you know the parade route once it’s scheduled. Rounded to the nearest thousand, her remaining loans total $40,000, $33,000, $21,000, $19,000 and $6,000. For a total of $118,000, a debt which no 30 (gasp!) year-old should incur unless she’s buying a house.

Still got some food remaining in your gullet? Here’s an emetic we can all enjoy. This woman works in some level of government and is, well, we’ll quote the original source:

Assuming I make the same salary for the next 6 years I will have contributed about $14,000 to my pension. Then I stop contributing but keep working for at least 10 more years. How much do I get?
Using a final average salary of $49,312, when I am 57 years old I will have 30 years of service credit. I will thus be eligible for a Single Life Allowance of $29,587 a year. That’s 60% of my final average salary. All for contributing just $14,000! This is totally morbid but even if I only collect for one year I am getting 2x my money back!

Why are state and municipal governments (to say nothing of the big one in Washington) drowning in debt? No idea whatsoever. Can’t quite place our finger on it.

Where would your priorities be if you were carrying $118,000 in student loans, while financing a laptop; carrying a credit card (you’re not going to believe this, but there’s credit card debt, too); borrowing money from a friend, a fiance-cum-husband and your mom; and aren’t even organized enough to pay your water bill on time? Don’t know about you, but we’d spend $7000 on a wedding!

You know, that change in your legal status that any justice of the peace can handle if you spend $40 on a license. But what’s the fun in that, when you can spend $6,960 more? You’d have to be crazy to apply that money to your student loan balances instead.

It’s the brazenness that gets us more than anything else. One of this woman’s stated goals is to increase her net worth to -$100,000 this year. She hopes to one day achieve the rarefied financial air of her husband (she calls him “DH”, for “dear husband”, and isn’t that precious?), who last clocked in at a robust -$15,000.

She uses terminology such as “fun money”, which we can only assume goes for pedicures and other non-assets. Listen: if you’re $100,000 in the hole, you don’t get “fun money”. You get debt reduction money, and maybe a buck or two to feed and clothe yourself with.

People often ask the CYC principals how we’ve managed to lead lives of relative affluence. Two answers. One, read the book. Two, by not doing the same idiotic, self-destructive crap that other people do. This doesn’t require anything beyond a 1st-grade comprehension of math. At its absolute most basic, income > expenses. Replace the > with a = or a <, and you can’t build wealth. Even if you’re sucking at the public teat like our friend Sallie’s Niece.

Here’s our favorite line from her archives, from April:

(The husband and I) recently combined finances.

Oh, this is going to end spectacularly. If you’ve never heard Mark Steyn’s line about dog feces and ice cream (or in this case, dog feces and slightly less pungent dog feces), Google it.

It gets even better. She donates to the Corporation for Public Broadcasting, completely unaware that she’s the charity case. What’s the best way to help poor people? Not adding to their ranks. This isn’t a case of there always being someone less fortunate than you. This is a case of needing to get your own house in order before vacuuming the neighbors’ carpets.

(NOTE: We’d originally used American Cancer Society as our example in the preceding paragraph, but a couple of clicks later we found she’s also donating to the starving unfortunates who run taxpayer-sponsored television that nobody watches. In her words, “I can’t imagine a world without PBS.”)

$200 concert tickets. Trips to Mexico. A “fabulously unfrugal (sic) Hawaiian honeymoon.” She used boldface 24-point type with exclamation points to announce when her consumer debt got down to $122,000. And there’s also:

The base price of my (wedding) dress is $1100, plus planned alterations of $150 and taxes of $104, the total comes out to be $1354.

It never stops. You know what? Forget about the two-pronged advice we just gave about how to build wealth. Instead, simply do the exact opposite of everything Sallie’s Niece does and you’ll be swimming in it.

Make sure you read the congratulatory comments, too. If there’s one thing we Americans do better than anyone else, it’s celebrate non-achievement. Like the morbidly obese woman who shrinks from 800 pounds down to 780, and whose case worker commemorates the meaninglessness by passing out hugs and Pixy Stix. Instead of celebrating the woman who’s always weighed 120 pounds and who goes to the gym every day and eats healthily to maintain that weight.

Oh, and sure enough, Sallie’s Niece is fat. It stands to reason: if you’re grossly undisciplined in one aspect of your life, you’ll be grossly undisciplined in most of them. We couldn’t locate any pictures of her, but people who aren’t fat don’t join Weight Watchers. (Nor do they join a gym as a New Year’s resolution, the surest sign that those pounds are not only staying on but inviting some friends to join them.)

Also, it’s a cleft palate, not a “cleft palette”. (Worst art supply ever.) Look, it’s one thing to make worse financial decisions than a Holstein cow would make. What we don’t understand is why she considers her stunning lack of acumen to be something worth sharing with the world.

And she smokes. Of course. And she “could use a Halloween costume.” (Again, 30 [gasp!] years old.)

Damn. The Chinese can’t invade our shores us fast enough.

**This article is featured in the Carnival of Personal Finance #324: The Universe Edition**

Filed Under: Bad Examples, Financial Retard of the Month Tagged With: , , , , , , , , , ,

It’s only money. Tens of thousands of dollars of money.

May 13, 2010

Sasha Obama, taken the day Digging Out From Our Mess got out of the red.

We spend so much time online looking out for fellow travelers, people who encourage you to spend your money, invest it wisely, and take ownership, that we never dreamed there was an online subculture of financially irresponsible people and their enablers; people who pay nominal attention to increasing their net worth, and who think that intending to get out of debt trumps actually doing so.

We recently discovered Digging Out From Our Mess, a blog posted by the female half of a couple who have an autistic kid, a normal kid, four credit card balances, two student loans, and $71,930.29 in consumer debt. Is this cause for shame? Possibly, but not when you can brag about it!

The anonymous 30ish woman behind the blog qualifies that total, admitting that her and her husband’s cumulative debt load does not include a “retirement loan”. We’d never heard that term before, and you probably haven’t either: Google only returns 628 results. It turns out that a retirement loan is an advance on a 401(k). Yes, a woman in the prime of life is borrowing now to avoid incurring penalties on a forced retirement plan that the law prevents her from touching until she turns 59½. But if you’re going to borrow against your 401(k), why even have it in the first place? Borrowing against it defeats the purpose of “forced saving”. We’re guessing the author also carries life insurance, although she’s coy about any weekly lottery ticket budget she might have (every ticket a potential winner!)

We’ll resume attacking her in a second, but in the meantime know that if you attempt to touch your 401(k) before you turn 59½, for anything other than emergency medical expenses, you’ll pay a 10% penalty.*

Anyhow, Mystery Blogger is proud that she’s 6% of the way to getting out of debt. (There’s a graph that illustrates this on her website. DON’T VISIT IT.) This means she’s en route to getting out of debt in her early 50s. Excluding the retirement loan, of course, which she’ll have to start paying back shortly thereafter. She recently posted that she spent $1000 to send her kids to camp for the summer, and is upset that her mother, maybe mother-in-law, it’s hard to remember which, didn’t contribute.

$1000 is close to 1.4% of her family’s ostensible consumer debt total. She could have moved her debt arrow that much closer to the end of the graph. When you’re only at 6%, that $1000 makes a visible difference. Yet she chose to put her money in something fleeting instead.

Incur debt, cry about it, go public with your halfhearted attempts to reduce it, then do something that increases it, while hoping that someone else might subsidize it. In which universe does that make sense? (We’re finding out that it does make sense in the world of international finance, but that’s a different and more ominous story.)

Alright, we give you permission to visit Digging Out From Our Mess, but only to witness this exchange in which Mystery Blogger defends herself and her methods against a humble Control Your Cash sniper. Mystery Blogger is the financial equivalent of the fat woman who loses 3 pounds and is so proud of her accomplishment that she has to share it with everyone and act as an authority on the topic of weight loss, even though she needs to lose another 77. Congratulations, you went 10 minutes without a cigarette. Here’s your Medal of Honor.

Once again, and this will be far from the last time: the only way to build wealth is to buy assets and sell liabilities. It’s elegant, it’s symmetrical, it’s simple and it never fails. Your kid’s summer indulgence is a liability. You should sell (i.e., not buy) it. A 401(k) is an asset. You should buy (i.e., contribute to) it. A loan you borrow with your 401(k) as collateral is a grenade. You should throw it at the Viet Cong.

It’s at times like this that we wish Tim Berners-Lee had majored in women’s studies instead of giving people like this an outlet. Maybe the Chinese have the right idea about censoring the internet, because Digging Out From Our Mess is far more obscene than anything you’ll find on 2 Girls 1 Cup, LiveLeak or Lemon Party.

If you’re $78,000 in debt, log out of BlogSpot, back away from the keyboard and spend that time at a second job.

* If you don’t have a 401(k), and you qualify, get one. Yes, it’s something you can’t enjoy for years, but it lowers your tax obligation. It’s a way of giving the federal government a few ounces of flesh instead of the requisite pound. Plus, most employers offer matching contributions up to a certain level. If your company is willing to exploit its own tax situation by giving a few dollars to your retirement rather than a few more to Uncle Sam, let ‘em.

Note: We didn’t bash the autistic kid, we bashed the mother. Relax. If anything, she should hand the autistic kid the keys to the checkbook and the bank passwords. He couldn’t do much worse than her.

Filed Under: Bad Examples, Consumer Debt, Making Smart Choices Tagged With: , , , , , ,