Financial Retard of the Fortnight

May 2, 2012

 

This isn't the subject of today's post. This is a guy with the same name, who got nailed on weapons charges and whom the good folks at BustedMugshots.com went to the trouble of photographing.

…In which we’re so incensed by a news story that someone else wrote, we have no choice but to comment on it.

 

Most financial truths are obvious: spend less than you earn, don’t waste your money, note where it’s going, economize where you can, et al. Those truths are so obvious that we barely mention them on this site. Let the other, less imaginative sites handle that.

 

We’re more interested in unconventional, even iconoclastic truths. There’s one that comes up time and again, that’s so important we’re thinking of putting it right up there with our mantra, Buy Assets, Sell Liabilities. 

 

On balance, higher education doesn’t pay off.

 

You don’t need our declaration to make it official. Think about your own life and those of those who surround you. The English literature graduate pouring coffee. The M.A. in philosophy who’s making $30,000 as a research assistant. The criminal justice major who can’t make ends meet selling real estate, which doesn’t even require a university education.

 

Most worthwhile jobs don’t. Some do, of course. But for every research physicist or medical dosimetrist who spent good money studying the hard sciences, there are multiple people who spent comparable money studying something less challenging and with less demand in the marketplace.

 

Oh, here we go again. Don’t you understand that education has an importance beyond dollars and cents?

 

Okay, then why isn’t it free?

 

It’s free in Australia.

 

No, it’s funded by taxpayers in Australia. Let’s rephrase the question: Why don’t college professors work pro bono, if it’s only about enriching young minds?

For the latest example of someone putting his faith in the wrong place, meet the grossly overeducated Andrew Slocum. He’s a junior high school librarian. Last year, at the age of 36, the married father of a 4-year-old spent $10,000 on an “advanced teaching certificate”. Whatever its other merits, this piece of paper qualified him for an annual $3000 raise; in the same way that having a penis qualifies him to be an Army Ranger. The certificate didn’t guarantee him anything.

An advanced teaching certificate is not to be confused with, say, a bachelor’s degree in corporate finance. The latter is a requisite for a career that the degreeholder wouldn’t otherwise be able to enter. The former allowed Mr. Slocum to do the same job he always did, with a possible salary increase simply for holding the piece of paper itself. The certificate had, and has, zero intrinsic value.

Unless you count the $10,000 it cost.

(Without the increase Mr. Slocum was hoping for), he reckons his family would be losing $60,000 over the course of their careers.

Only in academia can a $10,000 investment pay -6 times itself and still have people defending it.

Mr. Slocum has spent his entire adult life in schools, which is of course where he spent his entire pre-adult life. Education for its own sake is the ultimate comfort zone. “I’ve endured 16 years in a classroom. Now that I can go anywhere I want, I think I’ll…spend my life in a classroom.” Mr. Slocum had it out at a school board meeting.

He talked of his sacrifices: vacations, hard-earned cash and perhaps the most valuable — time with family and friends.

Oh, you whiny little princess.
Another fundamental truth: life, especially your financial life, is about results, not effort. Who’s a bigger net contributor: the guy who spends 80 hours a week digging postholes in the hot sun and then filling them up, or the woman who spends 4 seconds unlocking the doors to Target every morning so people can buy what they need?

 

All of it was for naught, Slocum said. Although he received his education raise this school year per the district contract, Slocum said he’s been wary about spending any of it. Instead, he’s been saving it, just in case he’d have to give it back.

Slocum is still saddled with $25,000 in student loan debt from his undergraduate and master’s degrees.

 

You really can’t make this stuff up. Multiply Mr. Slocum’s case by tens of millions, and you’ll have a better idea of where North American society is headed.

 

He earned the undergraduate and master’s degrees more than a decade ago, and is still carrying a balance equal to 5 months’ salary. 5 years ago, he decided to reproduce, because having a child you can’t afford is a great way to get back on track.

 

Again, poor and struggling people are poor largely because they choose to be. Mortgaging your future to cough up $10,000 for an enhancement in your education that might pay off is a retarded bet. Especially when you’ve already flushed $25,000+ down an education hole that’s got you in the position where you are today.

 

Somewhere within a couple blocks of Mr. Slocum’s house is a long-haul truck driver who makes comparable money and doesn’t have that educational albatross around his neck. One (more expensive) neighborhood over is a low-voltage electrician who tangibly improves people’s lives, and who instead of spending $10,000 on a useless certificate, spent it on a down payment for a second house. Which he now rents out for more than the mortgage payment, uses as a tax deduction, and passively finances his vacations with.

 

Mrs. Slocum, a $38,652-a-year teacher, encapsulates her family’s dilemma far better than we could:

 

“(The school board is) basically penalizing us for pursuing higher education. What kind of message does that send to the kids?”

 

Oh, that’s a rhetorical question? We answered it above. In bold.

 

“This is the first time I’ve felt embarrassed to be a teacher because I have to beg for the salary I deserve,” (Mr. Slocum) said, addressing School Board members.

News flash: whether you’re a butcher, drilling rig supervisor, baker, librarian, or candlestick maker, you don’t deserve a damn thing. A smart person would know that. An educated person wouldn’t necessarily.

Coda:  The story mentions that to secure the $10,000, Mr. Slocum had to raid his son’s college fund. That might be the best thing that could happen to that kid.

Filed Under: Bad Examples, Education Tagged With: , , , ,

Stupidity Before Bed, And After Every Meal

January 27, 2012

Trent Hamm, after flossing

 

Kudos yet again to everyone’s favorite purveyor of pointless personal finance advice, Trent Hamm of The Simple Dollar. Our hero has discovered a groundbreaking new way to avoid the tartar and dental caries that have plagued mankind since we started walking upright. Tired of having a smile that looks like a truck drove through it? You’re not going to believe how easy it is to solve that particular problem. Check out Trent, coming hard with the wisdom on November 5, 2009:

Brush your teeth. An unclean mouth is a perfect place for unwanted bacteria and germs to take root. Good oral hygiene reduces the chance for bacteria to grow in your mouth.

(Italics and boldface his.) And because repetition is the key to education, here’s another golden excerpt, this one from February 28, 2008:

Brush your teeth every day and floss them, too. Also, visit the dentist sometimes to make sure your teeth are still in good shape.

A clean mouth and clean teeth give you a nice smile and fresh breath, both of which are major positives for one’s personal appearance. It just takes a good scrubbing in the morning to cause it, so don’t skip over brushing your teeth.

No one’s going to remember something that complicated, so here’s yet another passage, from November 16, 2006:

Practice strong oral hygiene and use a strong mouthwash. Brush your teeth thoroughly at least twice a day; your breath is a key part of your appearance and “cover up” items such as Tic-Tacs often only work for a short while. It’s much better for your appearance to make sure your mouth is truly clean.

And finally (finally for our purposes, that is. We’re pretty sure Trent will still have much more to say about the value of brushing one’s teeth), here’s one from January 23, 2010:

…clean your teeth. If you have a habit of using more than just a dab of any product, read the directions and make sure you’re not over-using. If you’re using three times as much as you should, you’re buying three bottles for every one you actually need to buy.

Get the last little bit out. When the toothpaste tube seems empty, put the cap back on and cut off the bottom – you can still squeeze out a surprising amount.

Okay, so now that Trent has established that a good way to preserve the health of your teeth is to…

/going back to check, making sure we get it right

brush them, how to do so? Presumably, you’re going to need toothpaste to accomplish this bit of hygienic sorcery.

 

Aim is the cheapest toothpaste in existence. You don’t have to look hard to find it selling for around $1 for a 6-ounce tube. That’s less than a penny a brushing. Or as Trent would describe it, highway robbery courtesy of those rapacious capitalists at Church & Dwight. 

Trent was tired of Big Sodium Bicarbonate profiting off the mouths of the 99%. True to his pathologically frugal nature, he devoted a recent post to, of course, making your own toothpaste. At this point, we’re fairly impressed that he deigns to spew this drivel via a commercially manufactured computer, instead of one that he grew from saplings in his back yard. From last March 1:

The best recipe I’ve found is mixing 1/2 cup baking soda, 1/4 cup hydrogen peroxide, a packet of stevia (a natural sweetener that also is good for your teeth), and either a dash of cinnamon or a drop or two of peppermint oil (for flavor). Mix these together until they form a paste.

The baking soda and the hydrogen peroxide in the quantities required will run you about 30¢. Not to go Trent on you and spend inordinate amounts of time calculating minutiae, but we’re going somewhere with this. Trent continues:

For dispensing it, just head to the travel toiletries section of your local department store and pick out a small empty travel squirt container.

Yes, because when you’re already in the drugstore, it’s SO MUCH EASIER to pick out baking soda, hydrogen peroxide, stevia (assuming they sell stevia at Walgreens), cinnamon and/or peppermint oil, and small empty travel squirt containers, than to just walk over to aisle 6 and drop a single George Washington on a tube that someone else already went to the trouble of filling and sealing.

Oh, and is there anything missing from that list of ingredients? That is, between the sugar substitute and the chemical they use to clean bathroom tile with?

How about SODIUM FLUORIDE? You know, the ionic compound whose discovery spawned modern preventative dentistry as we know it? The stuff that does to cavities what The Simple Dollar does to common sense?

Look, we try to avoid all caps and boldface as much as possible. The intensity of our words alone should be enough. But good Lord, this idiot’s Rube Goldbergian methods are now going too far. Trent Hamm claims 750,000 or something readers per month. NONE of them have attempted to brew up a batch of Trent’s dangerous and counterproductive homemade dentifrice, probably not even the author himself. Which is good, because otherwise their teeth would start falling out. This NaHCO3H2O2  bouillabaisse of Trent’s creation is literally a recipe for disaster. What an imbecile.

Filed Under: Bad Examples 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: , , , , , , , , , ,
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