It used to be that the study of man’s foibles was the province of philosophers and religious theorists. By and large, those people wanted to understand us to improve our lot, whether on earth or in heaven. Now, we are the constant subjects of randomized double blind experiments with control groups. Of surveys. Or marketing data collection. And sociologists and behavioral economists are delving deep into the psychology of our behavior, but not out of concern for our souls, or even for the general state of mankind. They want to know what we do and why so they can tell professionals of all kinds how to deal with us. Manipulate us. Gain our support. Con us into buying stuff we shouldn’t, whether it’s political nonsense like death panels or physical garbage-to-be like huge entertainment devices.
I’ve recently been reading a book on public administration, which is a fancy term for the nuts and bolts of government. Because I have led my life on the creative, artistic side, I was surprised to learn just how codified and studied are all the behaviors that go into the running of our systems, whether public or private. And right along with that is the constant study of we the people, since we are either the clients or the customers of such organizations. It’s not enough that every bit of our buying habits that can be pulled from store discount/loyalty programs is marketed in hopes of piercing the truth of our grocery buying habits. It’s that today there is a specialty within economics that is all about every aspect of our behavior.
This idea can give you the creeps. Malcolm Gladwell has made the study of people and their snap judgments into a bestselling book, Blink, which is fascinating reading. He tries to come off like a scientist, and technically perhaps he is. But he undertook all those studies for commercial clients who wanted to sell us stuff.
Which leads me back to the real life of people who act without any self-consciousness that they are following a herd mentality—other than that they want to be fashionable, which is to be in the herd, after all. To be like the others. These people begin to ache to own iPhones and plasma TVs and blu-ray because well-educated marketers have used all their behavioral data to shape the hype. Which then enmeshes us in an ever-escalating series of created (rather than innate) desires, most of which are for ephemeral crap. The televisions of yesterday, which still operate, cannot even be given away today—despite the fact that anyone with cable can hook them up easily and receive all the channels with no problems. Why? Because thousands, if not millions of us have decided to “upgrade” our televisions. Without marketing, we wouldn’t be thinking this at all. We are treated as cattle to be herded first this way and then that. And without deliberate marketing, no one would be wasting a moment on mythical death panels, either. Someone is selling and deliberately pushing our emotional buttons to make us buy.
And the kicker in all this is that we, the cattle, get blamed for following what others have pushed upon us. The media says we spend too much, that it’s our fault that we buy too much. We listen and believe too much, too. Yet at the same time, the lingering recession is our fault because we’re spending too little. And we don’t listen and retrain ourselves into employees-to-be of towering technical skills. (Talk about satori!) Forget the fact that people aren’t spending because they don’t have jobs and don’t have money. Or that they can be very highly skilled professionals, but still be undercut by talent elsewhere on the globe because of the financial rate of exchange. After years of criticism because we as a nation don’t save, our savings rate has gone up dramatically. But we still get the tsk-tsks. Spend, cattle, spend. And tell me exactly why you buy, so I can pitch something new (and unnecessary) to you with deadly accuracy. And blame you in almost the same breath.
I don’t want to carry this cattle analogy to extremes, but herding people is a frightening concept. Yet, every day, some interest or other is trying to do exactly that.
Monday, September 28, 2009
Thursday, September 17, 2009
Craigslist Junkie
A month or so ago, we bought an expensive mattress and springs. Today on Craigslist, in the Free section, I have so far counted listings for three queen mattress sets, one twin set and one twin springs, and one unspecified set that is probably a full size. That’s a lot of free mattresses on a weekday, and the night is young.
The homemade pictures look okay. Out of five mattress sets, probably at least one is quite acceptable and has substantial life left in it. And these are just the free ones. Over in the Household section, somebody wants $750 for a king size mattress only. I don’t think he’ll get it, but you never know. Somebody else is selling a twin mattress, springs, and frame for $60. Now that’s more like it. Another person is selling a twin mattress only, for $25. The deals keep on coming.
Yes, I have become a Craigslist junkie. This is my latest Internet addiction, and it’s totally free. I check to see what people are selling and giving away. Luckily for me, I live so far from where all this personal retail activity is taking place that it is not practical for me to rush out and get one of these deals. Gas costs too much. But I can see what fun it would be to be a young man out to furnish a new apartment cheap with his buddies: All they need is a truck or van, some rope and old blankets, and their healthy young backs. They can totally get everything free. There are so many free couches and recliners that no self-respecting young person should even consider buying one. Free TVs. Free bedding. Free dishes and kitchen implements. Free everything. Makes me want to hop in the car and start collecting things.
There even are dirt cheap recycled wedding gifts floating around, in case one is invited to events. “Unopened, in original box” is a common theme in the descriptions. From the photos, it looks as if Mikasa, Lennox, and other well-known manufacturers are creating these items—overdone vases, serving bowls, large decorative platters, and more hideous stuff—just for the wedding gift crowd. Which apparently does not like them. So why buy one on Craigslist? Because they are decorative, they are giftlike, and you can get them at a fraction of retail. Just be careful to know the true retail price (after sales events and discounts) of these items. It often is substantially less than what the Craigslister claims. Also, a lot of glassware is described as crystal on Craigslist. Dream on, ignorant ones.
The real crystal and objects d’art in the Antiques and Collectibles sections do tempt me, and their prices are often substantial, though fair. But then I remember that I have nowhere to put anything new—first, I’d have to buy one of those handsome china cabinets that are also on the list. There’s a time in life for acquiring, and a time for reducing the load. Right now I am edging into the second period. The serious one, not mere de-cluttering but giving away or selling or otherwise getting rid of high-quality belongings. Downsizing for real. I’m not quite there yet. Meanwhile, I get a lot of fun out of seeing everyone else either at the beginning or at the end of the same cycle. The Recycle of Life, if you will.
The homemade pictures look okay. Out of five mattress sets, probably at least one is quite acceptable and has substantial life left in it. And these are just the free ones. Over in the Household section, somebody wants $750 for a king size mattress only. I don’t think he’ll get it, but you never know. Somebody else is selling a twin mattress, springs, and frame for $60. Now that’s more like it. Another person is selling a twin mattress only, for $25. The deals keep on coming.
Yes, I have become a Craigslist junkie. This is my latest Internet addiction, and it’s totally free. I check to see what people are selling and giving away. Luckily for me, I live so far from where all this personal retail activity is taking place that it is not practical for me to rush out and get one of these deals. Gas costs too much. But I can see what fun it would be to be a young man out to furnish a new apartment cheap with his buddies: All they need is a truck or van, some rope and old blankets, and their healthy young backs. They can totally get everything free. There are so many free couches and recliners that no self-respecting young person should even consider buying one. Free TVs. Free bedding. Free dishes and kitchen implements. Free everything. Makes me want to hop in the car and start collecting things.
There even are dirt cheap recycled wedding gifts floating around, in case one is invited to events. “Unopened, in original box” is a common theme in the descriptions. From the photos, it looks as if Mikasa, Lennox, and other well-known manufacturers are creating these items—overdone vases, serving bowls, large decorative platters, and more hideous stuff—just for the wedding gift crowd. Which apparently does not like them. So why buy one on Craigslist? Because they are decorative, they are giftlike, and you can get them at a fraction of retail. Just be careful to know the true retail price (after sales events and discounts) of these items. It often is substantially less than what the Craigslister claims. Also, a lot of glassware is described as crystal on Craigslist. Dream on, ignorant ones.
The real crystal and objects d’art in the Antiques and Collectibles sections do tempt me, and their prices are often substantial, though fair. But then I remember that I have nowhere to put anything new—first, I’d have to buy one of those handsome china cabinets that are also on the list. There’s a time in life for acquiring, and a time for reducing the load. Right now I am edging into the second period. The serious one, not mere de-cluttering but giving away or selling or otherwise getting rid of high-quality belongings. Downsizing for real. I’m not quite there yet. Meanwhile, I get a lot of fun out of seeing everyone else either at the beginning or at the end of the same cycle. The Recycle of Life, if you will.
Wednesday, August 26, 2009
It's All About the Coins
I performed that old familiar money ritual again. I opened my Superman bank (Motto: “Saving money is Powerful!”) and counted the coins. This is the ritual that so many of us find ourselves performing when our finances are suddenly uncomfortable. We check under the couch cushions, in the crevices of the car, and of course, we eye that huge bottle, jar, or actual pig-shaped container into which we usually throw all our change.
We put change in these banks for two reasons: 1. It is not cool to pay with exact change. Supposedly, only fussy old ladies do it, and no matter how fussy we secretly are, we don’t want to look fussy. We want to look cool and careless with money. 2. We formed the habit as children of keeping our extra cash in a container we could look at to see our wealth increasing, or shake to hear the lovely sound of coins clanging against each other. Reason #3 is a guy thing, but it’s actually just a subset of #1: Not wanting to ruin pants pockets fast by constantly loading them with change. Which cycles back to reason #1 again, because they sell change purses for men, those half-moon-shaped leather things that unfold with a little tray for your coins to be displayed. But supposedly, only fussy men, men who probably wear socks with sandals, carry those. Catch-22.
Anyway. A somewhat large, unexpected expense came up recently. (I should be expecting these by now, shouldn’t I? Didn’t I have an unexpected expense about a year ago?) Unfortunately, I find that cash is a bit tight this month (welcome to the club, right?), but I need to spend this money immediately. Even more unfortunately, I discovered that my rainy day savings, carefully laddered as the finance gurus have suggested, are months from being available without taking a major penalty hit. Ouch. When those CDs open, I’m going to change my strategy. Meanwhile, no way am I going to take a penalty to get my own money. I’d rather pay (less) to use someone else’s.
So I have been searching for the best option. Take money from an IRA? That adds to my taxable income for the year (and for some people would also mean an automatic 10% penalty), and I would rather not. Plus, anything I have invested in stocks, while certainly more liquid than a bank CD, I prefer to keep in the recovering market. It’s nice to see the values of stocks going up, but they aren’t back to where they were last year. No, I plan to leave my stocks alone.
Credit cards? Not the best time to be playing with them, but still, better than getting an unsecured bank loan at 15% or more. Or going through all the rigmarole to open a home equity line of credit, when there are penalties for not using at least $30,000 of it. That’s way too rich for my blood, and completely unnecessary when the issue is cash flow, not lack of funds. (Even as I write this, I have contracted to do a freelance gig that will more than pay for the loan I need to take out. It’s all a matter of timing.)
I was disappointed to learn that Chase has decided not to do those lovely, cheap wire transfer loans anymore such as I took out last year for a mere 3% fee and once before, entirely free. Everybody’s cash advances seemed to be at 19.99%. Yikes. I ended up examining the credit card statement junk inserts that arrive each month, comparing the language and the fine print on the offers accompanying “convenience checks” and “balance transfer checks.” And trying to figure out if they are one and the same thing. Which it turns out they are not. A convenience check, unless it is otherwise stated, is a regular cash advance, and thus is going to incur a cash advance finance charge rate (in this case, 19.99%) and might also include a transaction fee of several percent (in this case, 4%). Not what I want. Eventually, I found a good enough deal from Citi, a balance transfer with a 1.99% finance charge plus a 3% transaction fee. It also has the advantage of not involving me in excess transactions such as starting a new credit card account just to get a super low rate. I only need the loan for a very short term. (I could have tried a loan shark, but the rates wouldn’t be good. And I couldn’t do a payday loan, lousy as their rates are, because I am not an employee. I wouldn’t even consider a car title loan; again, lousy rates. Even as volatile as credit cards currently are, they remain less dicey than these choices.)
Imagine my surprise when, having gone through all my options, researched the details, and settled on a satisfactory plan, I suddenly found myself wanting to count the money in my Superman bank. I even got out my stash of coin wrappers and packaged up the coins. And then put them back in the bank. There is just something about cash. To the visceral child in me, coins represent cash even more strongly than bills do. Asking myself why, I realized that as a child, I seldom had any dollar bills in my possession. A nickel, dime, or quarter was exciting. On some level, this childhood valuation of money still has resonance, still connects to my financial life as an adult. And maybe I’m not alone. Maybe that is the real reason #3, why so many of us keep jars, bottles, pigs, and even superheroes filled with coins. Coins symbolize wealth. They have heft and character. They shine. They clang. I know that for some people it’s all about the Benjamins. But to me, it’s all about the coins.
We put change in these banks for two reasons: 1. It is not cool to pay with exact change. Supposedly, only fussy old ladies do it, and no matter how fussy we secretly are, we don’t want to look fussy. We want to look cool and careless with money. 2. We formed the habit as children of keeping our extra cash in a container we could look at to see our wealth increasing, or shake to hear the lovely sound of coins clanging against each other. Reason #3 is a guy thing, but it’s actually just a subset of #1: Not wanting to ruin pants pockets fast by constantly loading them with change. Which cycles back to reason #1 again, because they sell change purses for men, those half-moon-shaped leather things that unfold with a little tray for your coins to be displayed. But supposedly, only fussy men, men who probably wear socks with sandals, carry those. Catch-22.
Anyway. A somewhat large, unexpected expense came up recently. (I should be expecting these by now, shouldn’t I? Didn’t I have an unexpected expense about a year ago?) Unfortunately, I find that cash is a bit tight this month (welcome to the club, right?), but I need to spend this money immediately. Even more unfortunately, I discovered that my rainy day savings, carefully laddered as the finance gurus have suggested, are months from being available without taking a major penalty hit. Ouch. When those CDs open, I’m going to change my strategy. Meanwhile, no way am I going to take a penalty to get my own money. I’d rather pay (less) to use someone else’s.
So I have been searching for the best option. Take money from an IRA? That adds to my taxable income for the year (and for some people would also mean an automatic 10% penalty), and I would rather not. Plus, anything I have invested in stocks, while certainly more liquid than a bank CD, I prefer to keep in the recovering market. It’s nice to see the values of stocks going up, but they aren’t back to where they were last year. No, I plan to leave my stocks alone.
Credit cards? Not the best time to be playing with them, but still, better than getting an unsecured bank loan at 15% or more. Or going through all the rigmarole to open a home equity line of credit, when there are penalties for not using at least $30,000 of it. That’s way too rich for my blood, and completely unnecessary when the issue is cash flow, not lack of funds. (Even as I write this, I have contracted to do a freelance gig that will more than pay for the loan I need to take out. It’s all a matter of timing.)
I was disappointed to learn that Chase has decided not to do those lovely, cheap wire transfer loans anymore such as I took out last year for a mere 3% fee and once before, entirely free. Everybody’s cash advances seemed to be at 19.99%. Yikes. I ended up examining the credit card statement junk inserts that arrive each month, comparing the language and the fine print on the offers accompanying “convenience checks” and “balance transfer checks.” And trying to figure out if they are one and the same thing. Which it turns out they are not. A convenience check, unless it is otherwise stated, is a regular cash advance, and thus is going to incur a cash advance finance charge rate (in this case, 19.99%) and might also include a transaction fee of several percent (in this case, 4%). Not what I want. Eventually, I found a good enough deal from Citi, a balance transfer with a 1.99% finance charge plus a 3% transaction fee. It also has the advantage of not involving me in excess transactions such as starting a new credit card account just to get a super low rate. I only need the loan for a very short term. (I could have tried a loan shark, but the rates wouldn’t be good. And I couldn’t do a payday loan, lousy as their rates are, because I am not an employee. I wouldn’t even consider a car title loan; again, lousy rates. Even as volatile as credit cards currently are, they remain less dicey than these choices.)
Imagine my surprise when, having gone through all my options, researched the details, and settled on a satisfactory plan, I suddenly found myself wanting to count the money in my Superman bank. I even got out my stash of coin wrappers and packaged up the coins. And then put them back in the bank. There is just something about cash. To the visceral child in me, coins represent cash even more strongly than bills do. Asking myself why, I realized that as a child, I seldom had any dollar bills in my possession. A nickel, dime, or quarter was exciting. On some level, this childhood valuation of money still has resonance, still connects to my financial life as an adult. And maybe I’m not alone. Maybe that is the real reason #3, why so many of us keep jars, bottles, pigs, and even superheroes filled with coins. Coins symbolize wealth. They have heft and character. They shine. They clang. I know that for some people it’s all about the Benjamins. But to me, it’s all about the coins.
Tuesday, August 11, 2009
More Money, Fewer Problems?
Why does every problem (mine and yours) seem really complicated only because there is no extra money to throw at it? Recently I heard someone say that throwing money at problems does not solve them. But I can readily think of at least half a dozen people whose lives would not seem to be messy failures if they just had more money.
For instance, the young man who lives with his grandmother, and is decried by older family members for not having a life, etc. All he needs is enough income to rent an apartment (or share one), and instantly, his status in the family will improve. He will no longer be viewed as a problem. Aunts and grandmothers will no longer call his mother and harangue her about him. And outside the family, his new independence will make him more attractive to others. Girls will date him. Boys will date him. Whatever. He might actually start to have a life.
Or what about the elderly single lady (and most elderly people are women, and most of them are single, because you men are fragile beings who die young) who never had much income, and now must live with other family members to pool meager resources? If she had more money coming in, she could have the dignity of her own home, or better respect in the shared home because she could stay there out of family togetherness, not dire need. And she could afford to go off on a vacation away from her family members, thus reducing the stress of litter-mates returning to a shared nest after a lifetime of making their own choices: Brillo versus S.O.S. Miracle Whip versus Hellmans’. Oreos versus Hydrox. You get the picture. There’s even the way the paper towels and toilet paper rolls are hung to bicker over. A bit more money, and they’d be able to laugh at their different tastes and habits.
It works similarly in other relationships, though perhaps not as tidily. The spouse who seems to constantly be buying new clothes would not be criticized at home if there was an obvious cause and effect of wearing new clothes to work and staying employed or getting promoted. My friend who keeps buying the latest little technology gadgets is forgiven if the tweets he generates land him a media deal. The person who contributes to a 401(k) even though she is in serious credit card debt would be told she has foresight—if only she wasn’t in debt. These are indirect benefits, sometimes long-term benefits, and when money is tight, personal choices and stylistic differences cause relationship friction. If there’s plenty of money, only control freaks still care.
And yet...we all know that most people claim they’d be well set if they just had a little more income. But studies show that when someone gets a raise in income, the tendency is to increase spending on all fronts. The person now earns more but owes more, too, whether in additional debt or in new obligations. So, according to the behavioral scientists, I’m dead wrong about money solving any problems. After all, the kid living in his grandmother’s basement needs to put down the video game controller and leave the house and find a job. Giving him the money to launch a future does not automatically give him the courage to live his life.
But I still am teased by the idea that with just a little more money, so many thorny relationship issues would be smoothed out.
For instance, the young man who lives with his grandmother, and is decried by older family members for not having a life, etc. All he needs is enough income to rent an apartment (or share one), and instantly, his status in the family will improve. He will no longer be viewed as a problem. Aunts and grandmothers will no longer call his mother and harangue her about him. And outside the family, his new independence will make him more attractive to others. Girls will date him. Boys will date him. Whatever. He might actually start to have a life.
Or what about the elderly single lady (and most elderly people are women, and most of them are single, because you men are fragile beings who die young) who never had much income, and now must live with other family members to pool meager resources? If she had more money coming in, she could have the dignity of her own home, or better respect in the shared home because she could stay there out of family togetherness, not dire need. And she could afford to go off on a vacation away from her family members, thus reducing the stress of litter-mates returning to a shared nest after a lifetime of making their own choices: Brillo versus S.O.S. Miracle Whip versus Hellmans’. Oreos versus Hydrox. You get the picture. There’s even the way the paper towels and toilet paper rolls are hung to bicker over. A bit more money, and they’d be able to laugh at their different tastes and habits.
It works similarly in other relationships, though perhaps not as tidily. The spouse who seems to constantly be buying new clothes would not be criticized at home if there was an obvious cause and effect of wearing new clothes to work and staying employed or getting promoted. My friend who keeps buying the latest little technology gadgets is forgiven if the tweets he generates land him a media deal. The person who contributes to a 401(k) even though she is in serious credit card debt would be told she has foresight—if only she wasn’t in debt. These are indirect benefits, sometimes long-term benefits, and when money is tight, personal choices and stylistic differences cause relationship friction. If there’s plenty of money, only control freaks still care.
And yet...we all know that most people claim they’d be well set if they just had a little more income. But studies show that when someone gets a raise in income, the tendency is to increase spending on all fronts. The person now earns more but owes more, too, whether in additional debt or in new obligations. So, according to the behavioral scientists, I’m dead wrong about money solving any problems. After all, the kid living in his grandmother’s basement needs to put down the video game controller and leave the house and find a job. Giving him the money to launch a future does not automatically give him the courage to live his life.
But I still am teased by the idea that with just a little more money, so many thorny relationship issues would be smoothed out.
Friday, July 31, 2009
A Good Time to Save for the Future
A friend just lost a job, and the spouse’s work hours also got cut to almost nothing. They worked at the same company. This is not exactly the best plan, to double up in such a manner, but initially, the one spouse used the job connections to bring the other spouse on board. So you can understand why they both worked at the same place.
Now what happens to them? I don’t know. They’re really hurting from the psychological blow, and they had just spent big money on a home improvement, thinking that their jobs were fine. They’ll have a couple of months of severance as a cushion, but then what? Can they find new jobs in this economy? Will they get rehired if their former employer’s situation improves? I hope they have family who can help. I think they do.
What about you? And me? I’m doing as much work as I can find. So far, my spouse has a job and we have no financial issues. But just in case, we’re selling some items to build up savings for our next vacation. (I know, it sounds obscene to talk of a vacation in the same breath as a double job loss. But our situations are different--today, at least.) Still, we are being cautious. Instead of charging the trip and planning to pay it off with future income, we’ll put the money in the bank in advance. And if between now and then we do lose our main source of income, well, at least our savings will be that much greater for having built them up.
Are we that perfect on all fronts? Of course not. We just bought a new mattress set and a car warranty insurance policy. Those put us thousands in the hole, even though both purchases are for the express purpose of being able to sleep better at night. They could take a year or more to pay off. Thus it would be nice to continue to have income so we can do exactly that. But if we don’t, will we be okay? Yes. Will we still have our current income a year from now? There’s no way of knowing.
Life’s like that. For a while now I have been aware that our current personal situation of financial peace is likely to be temporary. There will be a family crisis. Or we will have a crisis. Or both. Is there any way to avoid these possibilities? Nope.
So meanwhile, we save a large chunk of money regularly, and then we spend the rest. We are cautious about it, of course. We learned how not to fritter money away in a very hard school. Someone else is spending our national average for eating out or buying fast food meals. Someone else is buying our share of the national average for clothing, and shoes, and cars, just as for decades, someone else has been spending our share of the national average of liquor, cigarettes, and drugs. Are we alone in being savers and careful spenders? No. Plenty of Americans are saving these days. It’s fascinating that the U.S. has gone from a 0% savings rate to 7% in a mere matter of months. People are saving like crazy. They aren’t spending. That makes the economy bad, but it keeps them sleeping at night. Until a job loss, that is.
I like sleeping at night. Which is why I push myself to keep working hard every day, trying to create future income and bring in current revenue, too. I’m not going to let the future take care of itself. My spouse is the same way. That’s why, when we take our vacation, we will feel entitled to it; we’ll have earned it.
What are the rest of you doing? Every day I ask myself if I can or should do more. Are you asking yourself the same question? If there is anything you can do, from turning clutter into cash, to reducing waste and improving the comfort of your home, why not think about taking action? Not all contributions to your happy life need be in cash, after all. And if you create more peace, pleasure, and health through careful management of your current resources, you won’t necessarily need so much cash as you might imagine. Today is a good time to save for the future. Whatever the future turns out to be.
Now what happens to them? I don’t know. They’re really hurting from the psychological blow, and they had just spent big money on a home improvement, thinking that their jobs were fine. They’ll have a couple of months of severance as a cushion, but then what? Can they find new jobs in this economy? Will they get rehired if their former employer’s situation improves? I hope they have family who can help. I think they do.
What about you? And me? I’m doing as much work as I can find. So far, my spouse has a job and we have no financial issues. But just in case, we’re selling some items to build up savings for our next vacation. (I know, it sounds obscene to talk of a vacation in the same breath as a double job loss. But our situations are different--today, at least.) Still, we are being cautious. Instead of charging the trip and planning to pay it off with future income, we’ll put the money in the bank in advance. And if between now and then we do lose our main source of income, well, at least our savings will be that much greater for having built them up.
Are we that perfect on all fronts? Of course not. We just bought a new mattress set and a car warranty insurance policy. Those put us thousands in the hole, even though both purchases are for the express purpose of being able to sleep better at night. They could take a year or more to pay off. Thus it would be nice to continue to have income so we can do exactly that. But if we don’t, will we be okay? Yes. Will we still have our current income a year from now? There’s no way of knowing.
Life’s like that. For a while now I have been aware that our current personal situation of financial peace is likely to be temporary. There will be a family crisis. Or we will have a crisis. Or both. Is there any way to avoid these possibilities? Nope.
So meanwhile, we save a large chunk of money regularly, and then we spend the rest. We are cautious about it, of course. We learned how not to fritter money away in a very hard school. Someone else is spending our national average for eating out or buying fast food meals. Someone else is buying our share of the national average for clothing, and shoes, and cars, just as for decades, someone else has been spending our share of the national average of liquor, cigarettes, and drugs. Are we alone in being savers and careful spenders? No. Plenty of Americans are saving these days. It’s fascinating that the U.S. has gone from a 0% savings rate to 7% in a mere matter of months. People are saving like crazy. They aren’t spending. That makes the economy bad, but it keeps them sleeping at night. Until a job loss, that is.
I like sleeping at night. Which is why I push myself to keep working hard every day, trying to create future income and bring in current revenue, too. I’m not going to let the future take care of itself. My spouse is the same way. That’s why, when we take our vacation, we will feel entitled to it; we’ll have earned it.
What are the rest of you doing? Every day I ask myself if I can or should do more. Are you asking yourself the same question? If there is anything you can do, from turning clutter into cash, to reducing waste and improving the comfort of your home, why not think about taking action? Not all contributions to your happy life need be in cash, after all. And if you create more peace, pleasure, and health through careful management of your current resources, you won’t necessarily need so much cash as you might imagine. Today is a good time to save for the future. Whatever the future turns out to be.
Monday, July 20, 2009
Collectors and Collections
A recent article about baby boomers who grew up playing with certain toys and now as adults feel entitled to expensive toys of a similar nature reminded me of the sad demise of each generation’s hobbies. Just as today’s middle-agers collected Star Trek toys as kids, so today’s nonagenarians as children collected first day airmail covers from all over the world. Back then, the airlines were beginning to establish the routes that exist today, and sometimes, such flights were fraught with dangers. Some of my mom’s airmail covers have scorch marks because the plane went down and most of the mail on it burned.
At one time, about when my mother was middle-aged, those airmail covers were worth a lot of money. The kids who had collected them or yearned for them were middle-aged themselves, and some of them had money to buy their childhood desires at last. I remember my mother selling a few Graf Zeppelin first day covers for hundreds of dollars. And I remember how angry she was that she needed the money and had to break up her collection. Now, at nearly 95, she is too far gone into the twilight of dementia to care. But the people who might have bought the rest of her collection with great enthusiasm are mostly dead. Or at the disposal point in their own lives.
Which got me thinking about my comic books. When people come to my house and see them, they always comment on how valuable my comics must be. I put them straight: I don’t have old Marvel comics. I have Superman DC comics, and most of them are in so-so shape. I read them over and over, or I bought them from other kids, or they were subscription copies that were mailed folded. In other words, these comics are pretty near worthless as collectibles. The good thing about it is that I can enjoy them with a clear conscience instead of feeling that I ought to sell them for big bucks right now.
My mother, who did not like parting with her Graf Zeppelin covers, did not sell her collection when it was worth the most money. She loved her collection and did not want to sell it for ten cents on the dollar to a dealer. And back then, that would have been her most likely option. Now, despite eBay, the value of airmail covers and stamps in general has plummeted. EBay and other online options make it easy for buyers to find sellers and for sellers to compete with each other. This forces prices down if there is more supply than demand. You can buy dozens of such covers for under $100, easily. And stamps, too. And old paper money. And old coins not made of precious metals.
In other words, collectibles have a bust and boom cycle based largely on who cares about them. True, some kids who have seen the recent Spider-Man movies might become deep fans and want the first issue of the comic in which he originally appeared, Amazing Fantasy 15. That comic, which sold on newsstands in 1962 for twelve cents, is currently worth many thousands of dollars. But the majority of the fans who care about that specific comic and want to own it are the ones who were kids when it came out, and who are nearing or at retirement age now. And most of them can only afford to buy an expensive comic (between $500 and $250,000 depending on condition) while they are still working.
So...what does this mean for you and your collectibles? Probably the same thing: that your generation will always value them, but once your generation starts retiring or dying off, the value will plummet because the demand versus the supply will slacken. If you want to get the most money from your collectibles, you have to sell them while they are still valuable.
Yes, it is true that some items will still have residual value as rarities, but remember that online auctions make rarity less likely. Any mass-produced collectible could be competing with thousands more just like it. I once knew a girl who kept the historic issue of Sports Illustrated that had Sammy Sosa on the cover because he broke the record for home runs. But millions of copies were printed, and millions of people kept that issue, thus making the eventual value of it very low indeed. If there are many sellers, it becomes a buyer’s market and prices go down.
There is a time in everyone’s life when they acquire, and rightly so. And there is a time when they should be letting go of things. If you have a large collection of Star Trek or Star Wars memorabilia, this could be the right time to sell most of it. And by the way, don’t be swayed by dealers who want you to part with whole sets. Keep and display just one representative item if that’s what you want to do. But don’t imagine that your collection will send your children to college, because it won’t. Most collections are of items that were produced in the millions. China and silver, too, as so many people have discovered, although with precious metals there is always the option of selling them by weight, with no regard to the artistry of the piece itself. Original works of art are a different story, since they are unique, but they too suffer the vagaries of fashion. If the artist or style of art is hot, you may get an enormous price for yours. If not, the final figure might be disappointing.
Another sad fact about selling collectibles is that unless you personally have the time and energy to sell your collectibles on an auction site, you will only receive the wholesale, dealer’s price for them. Depending on the market, that price could be as little as 10% of the current retail price. Yes, only 10%. If dealers in your kind of collectible all offer you around the same percentage, you know you won’t get a better cut no matter how many more dealers you contact. For many collectibles, 25-33% of the current retail value is considered very good. The cut is different with auction houses, but the principle is the same. The moment you decide not to be the retailer yourself, you lose the majority of the profit on the item because you have to assign it to the middleman who actually makes the sale.
People who resell their used books that are not collectibles already know this. The resale prices they get are extremely low. For a book that originally cost $5.99 at a bookstore, and might have been discounted 10% but then been subject to sales tax, the 17 cents a used bookstore will offer for it is about 3% of the original cost. Three percent! It might make more sense to give the book to a charity and claim the thrift store price as a tax deduction. It is bound to be higher than 17 cents per book. Can you do better on an auction site trying to sell a mass-produced book? No, not if you take into account your time and trouble to market each one individually.
Am I back to exploding the eBay myth? Yes. Although I know people who make good money selling collectibles on this or other auction sites, they are retired and have no other responsibilities. And eBay’s new rules have sent some of them scurrying to collectibles shows to sell their items directly to the public. But that’s a major devotion of time and personal effort. If the object is to get cash no matter how much time it takes, fine. But for most of us, that is not the preferred situation.
Much as we love our possessions, eventually, they must all be disposed of. The ideal is that they go to good homes, to people who will cherish them, either relatives or friends, or even strangers. The next best scenario is that they sell for huge prices, thus justifying the collector’s effort in originally obtaining and then storing them carefully for many years. But the sad reality for most of us is that the items we or our relatives prized simply go to the first dealer who offers a fair price. Or to the junk dealer. Or to the dumpster, if their value is not recognized or has been lost to the vagaries of time. This is what makes the television show, Antiques Roadshow so interesting. At any moment, some odd item that has been taking up space in an attic will be identified as worth a lot of money. Which the owner will not be able to sell it for, alas.
At one time, about when my mother was middle-aged, those airmail covers were worth a lot of money. The kids who had collected them or yearned for them were middle-aged themselves, and some of them had money to buy their childhood desires at last. I remember my mother selling a few Graf Zeppelin first day covers for hundreds of dollars. And I remember how angry she was that she needed the money and had to break up her collection. Now, at nearly 95, she is too far gone into the twilight of dementia to care. But the people who might have bought the rest of her collection with great enthusiasm are mostly dead. Or at the disposal point in their own lives.
Which got me thinking about my comic books. When people come to my house and see them, they always comment on how valuable my comics must be. I put them straight: I don’t have old Marvel comics. I have Superman DC comics, and most of them are in so-so shape. I read them over and over, or I bought them from other kids, or they were subscription copies that were mailed folded. In other words, these comics are pretty near worthless as collectibles. The good thing about it is that I can enjoy them with a clear conscience instead of feeling that I ought to sell them for big bucks right now.
My mother, who did not like parting with her Graf Zeppelin covers, did not sell her collection when it was worth the most money. She loved her collection and did not want to sell it for ten cents on the dollar to a dealer. And back then, that would have been her most likely option. Now, despite eBay, the value of airmail covers and stamps in general has plummeted. EBay and other online options make it easy for buyers to find sellers and for sellers to compete with each other. This forces prices down if there is more supply than demand. You can buy dozens of such covers for under $100, easily. And stamps, too. And old paper money. And old coins not made of precious metals.
In other words, collectibles have a bust and boom cycle based largely on who cares about them. True, some kids who have seen the recent Spider-Man movies might become deep fans and want the first issue of the comic in which he originally appeared, Amazing Fantasy 15. That comic, which sold on newsstands in 1962 for twelve cents, is currently worth many thousands of dollars. But the majority of the fans who care about that specific comic and want to own it are the ones who were kids when it came out, and who are nearing or at retirement age now. And most of them can only afford to buy an expensive comic (between $500 and $250,000 depending on condition) while they are still working.
So...what does this mean for you and your collectibles? Probably the same thing: that your generation will always value them, but once your generation starts retiring or dying off, the value will plummet because the demand versus the supply will slacken. If you want to get the most money from your collectibles, you have to sell them while they are still valuable.
Yes, it is true that some items will still have residual value as rarities, but remember that online auctions make rarity less likely. Any mass-produced collectible could be competing with thousands more just like it. I once knew a girl who kept the historic issue of Sports Illustrated that had Sammy Sosa on the cover because he broke the record for home runs. But millions of copies were printed, and millions of people kept that issue, thus making the eventual value of it very low indeed. If there are many sellers, it becomes a buyer’s market and prices go down.
There is a time in everyone’s life when they acquire, and rightly so. And there is a time when they should be letting go of things. If you have a large collection of Star Trek or Star Wars memorabilia, this could be the right time to sell most of it. And by the way, don’t be swayed by dealers who want you to part with whole sets. Keep and display just one representative item if that’s what you want to do. But don’t imagine that your collection will send your children to college, because it won’t. Most collections are of items that were produced in the millions. China and silver, too, as so many people have discovered, although with precious metals there is always the option of selling them by weight, with no regard to the artistry of the piece itself. Original works of art are a different story, since they are unique, but they too suffer the vagaries of fashion. If the artist or style of art is hot, you may get an enormous price for yours. If not, the final figure might be disappointing.
Another sad fact about selling collectibles is that unless you personally have the time and energy to sell your collectibles on an auction site, you will only receive the wholesale, dealer’s price for them. Depending on the market, that price could be as little as 10% of the current retail price. Yes, only 10%. If dealers in your kind of collectible all offer you around the same percentage, you know you won’t get a better cut no matter how many more dealers you contact. For many collectibles, 25-33% of the current retail value is considered very good. The cut is different with auction houses, but the principle is the same. The moment you decide not to be the retailer yourself, you lose the majority of the profit on the item because you have to assign it to the middleman who actually makes the sale.
People who resell their used books that are not collectibles already know this. The resale prices they get are extremely low. For a book that originally cost $5.99 at a bookstore, and might have been discounted 10% but then been subject to sales tax, the 17 cents a used bookstore will offer for it is about 3% of the original cost. Three percent! It might make more sense to give the book to a charity and claim the thrift store price as a tax deduction. It is bound to be higher than 17 cents per book. Can you do better on an auction site trying to sell a mass-produced book? No, not if you take into account your time and trouble to market each one individually.
Am I back to exploding the eBay myth? Yes. Although I know people who make good money selling collectibles on this or other auction sites, they are retired and have no other responsibilities. And eBay’s new rules have sent some of them scurrying to collectibles shows to sell their items directly to the public. But that’s a major devotion of time and personal effort. If the object is to get cash no matter how much time it takes, fine. But for most of us, that is not the preferred situation.
Much as we love our possessions, eventually, they must all be disposed of. The ideal is that they go to good homes, to people who will cherish them, either relatives or friends, or even strangers. The next best scenario is that they sell for huge prices, thus justifying the collector’s effort in originally obtaining and then storing them carefully for many years. But the sad reality for most of us is that the items we or our relatives prized simply go to the first dealer who offers a fair price. Or to the junk dealer. Or to the dumpster, if their value is not recognized or has been lost to the vagaries of time. This is what makes the television show, Antiques Roadshow so interesting. At any moment, some odd item that has been taking up space in an attic will be identified as worth a lot of money. Which the owner will not be able to sell it for, alas.
Tuesday, July 7, 2009
Stop Whining about Getting Organized
I don’t know about you, but I am tired of all the whining. People are whining everywhere, about everything. Legitimate beefs, such as lack of a job, lack of a home, lack of a spouse, lack of health care. And stupid complaints, which can be lumped as one big general whine about lacking a mommy to tidy up their messy lives for them.
Have I been overdosing on Clean House, the TV show that finds people who like to buy and hold onto cubic tons of worthless possessions, which they seem to throw up in the air and let lie where they drop, and then live amongst like pigs? Probably. I can (just barely) understand buying too much stuff. I will never understand tossing it about like a burglar and then sitting in the same room with it for years, never cleaning it up.
But it’s not just these crazy people who are addicted to buying and to lazing about who are getting on my nerves. It’s the other people, the smarter people, if you will. Only they don’t act smart. They keep telling me that all they need to do is get organized. They feel overwhelmed, they say. They are looking for a system that will finally help them address their messes. And even more annoying, they keep finding such systems, and claiming that everything will now change. But of course it doesn’t.
Just yesterday I read a NYTimes piece by Ron Lieber about how he had taken a financial health day and finished many of his undone financial tasks. He finally spent some serious time on a long laundry list of unfinished money-related chores. He even claims, as you can read if you follow the link, that he saved a couple of thousand dollars by this day of attention to his finances. But to my mind, he missed the boat completely.
Here’s where I’ll probably start sounding like Suze Orman. Her most potent message has always been to protect you and your loved ones from catastrophe. And this NYTimes reporter freely mentions that he does not have a will even though he has a very young child. He gives himself props for finally (during his day of financial attention) investigating a few lawyer choices to make a will. But he does not finish the day as a man who has a will. He finishes it by rewarding himself with more stuff. He uses up a gift card and buys (overpriced) socks. Great move, Ron. What if you die tomorrow, and your kid’s guardianship has to be determined by a court? Everything gets messy. For the same $15, Lieber could have bought a will via the Internet that would have assigned the guardianship of his child. A simple trip to his bank, and it would be notarized. Done. The kid is safe. But no, the man goes shopping for socks, even though the most important task of his financial day remains undone.
Of course I understand that a will is a complex document, but covering the basics should not be put off because you haven’t got a trust yet, or you’re not sure how to include your spouse’s interests, or whatever picky little details you’re indecisive about. Lieber can always write another will, after lengthy consultation with a high-priced attorney. But in his drive for perfection, he leaves the critical task undone, that of protecting his child.
And that’s the same as what happens with all the whiners who claim that if they could just find the right system to organize their stuff (and of course, the time to do it), all their issues would be resolved. No, they won’t be. It’s not organizing the chaos of your life that is important, it is separating the important from the unimportant. And then doing what is important.
Too many people don’t get this. Their lives feel empty so they fill their physical spaces with clutter, or they act out with addictions and crazy behavior. Which does not get the basic job done, of dealing with the important issues. So stop whining, will you? Look around and identify your most important tasks, the ones that affect the core of your life. And then do them.
Have I been overdosing on Clean House, the TV show that finds people who like to buy and hold onto cubic tons of worthless possessions, which they seem to throw up in the air and let lie where they drop, and then live amongst like pigs? Probably. I can (just barely) understand buying too much stuff. I will never understand tossing it about like a burglar and then sitting in the same room with it for years, never cleaning it up.
But it’s not just these crazy people who are addicted to buying and to lazing about who are getting on my nerves. It’s the other people, the smarter people, if you will. Only they don’t act smart. They keep telling me that all they need to do is get organized. They feel overwhelmed, they say. They are looking for a system that will finally help them address their messes. And even more annoying, they keep finding such systems, and claiming that everything will now change. But of course it doesn’t.
Just yesterday I read a NYTimes piece by Ron Lieber about how he had taken a financial health day and finished many of his undone financial tasks. He finally spent some serious time on a long laundry list of unfinished money-related chores. He even claims, as you can read if you follow the link, that he saved a couple of thousand dollars by this day of attention to his finances. But to my mind, he missed the boat completely.
Here’s where I’ll probably start sounding like Suze Orman. Her most potent message has always been to protect you and your loved ones from catastrophe. And this NYTimes reporter freely mentions that he does not have a will even though he has a very young child. He gives himself props for finally (during his day of financial attention) investigating a few lawyer choices to make a will. But he does not finish the day as a man who has a will. He finishes it by rewarding himself with more stuff. He uses up a gift card and buys (overpriced) socks. Great move, Ron. What if you die tomorrow, and your kid’s guardianship has to be determined by a court? Everything gets messy. For the same $15, Lieber could have bought a will via the Internet that would have assigned the guardianship of his child. A simple trip to his bank, and it would be notarized. Done. The kid is safe. But no, the man goes shopping for socks, even though the most important task of his financial day remains undone.
Of course I understand that a will is a complex document, but covering the basics should not be put off because you haven’t got a trust yet, or you’re not sure how to include your spouse’s interests, or whatever picky little details you’re indecisive about. Lieber can always write another will, after lengthy consultation with a high-priced attorney. But in his drive for perfection, he leaves the critical task undone, that of protecting his child.
And that’s the same as what happens with all the whiners who claim that if they could just find the right system to organize their stuff (and of course, the time to do it), all their issues would be resolved. No, they won’t be. It’s not organizing the chaos of your life that is important, it is separating the important from the unimportant. And then doing what is important.
Too many people don’t get this. Their lives feel empty so they fill their physical spaces with clutter, or they act out with addictions and crazy behavior. Which does not get the basic job done, of dealing with the important issues. So stop whining, will you? Look around and identify your most important tasks, the ones that affect the core of your life. And then do them.
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