Sunday, July 30, 2006
MMMB- Oh, the pain of it all!
I felt it! Just driving home from the grocery store a few minutes ago. On a whim I drove up into a neighborhood in our town I had never noticed before. It was gorgeous! Big houses on big lots with professional landscaping and inground pools on a couple of quiet cul-de-sacs. We've explored our town a lot over the years, and not much of it is fancy. How could I have missed these streets?! Now I started to feel envy! And regret. Why HADN'T we bought a house in this area 5 years ago when we were tentatively looking, before deciding to continue renting our modest apartment and invest our dough in liquid assets instead? Those houses probably doubled, even tripled in value in that time period. AND we could have been entertaining our family and friends in style all this time.
The emotions were overwhelming; I even came home and spilled to Mopey about my feelings. He shrugged and patiently reminded me that no one has a crystal ball, and everyone has regrets at times about where they put their money. No one's perfect, or always lucky. And HE at least is happy he never had to do any yard work, pump out a flooded basement, or spend the weekend running back and forth to Home Depot while trying to build a deck or fix a toilet. Well, I had to admit THAT makes sense. Besides the frustration factor, Mopey wouldn't have had time to invest our money the way we have been so successfully. There's really no free lunch and there are only 24 hours in a day.
Those emotions sure can get ahold of you and make your decisions for you sometimes. Be careful out there!
-Moopy
The emotions were overwhelming; I even came home and spilled to Mopey about my feelings. He shrugged and patiently reminded me that no one has a crystal ball, and everyone has regrets at times about where they put their money. No one's perfect, or always lucky. And HE at least is happy he never had to do any yard work, pump out a flooded basement, or spend the weekend running back and forth to Home Depot while trying to build a deck or fix a toilet. Well, I had to admit THAT makes sense. Besides the frustration factor, Mopey wouldn't have had time to invest our money the way we have been so successfully. There's really no free lunch and there are only 24 hours in a day.
Those emotions sure can get ahold of you and make your decisions for you sometimes. Be careful out there!
-Moopy
MMMB- What does money mean to you?
Perhaps this could be part of the book's intro:
Ask the reader: "What does money mean to you?"
1- freedom from worry/fear of the future
2- not having to work
3- buying fancy stuff/things you deserve (nothing but the best for the _______ family!)
4- a reward for working hard in your career
5- opens social doors (dreams of fame/hobnobbing with important people)
6- ego reward (feel like you're keeping up OK with the Joneses_
7- sense of responsibility to use it for the good (JD Rockefeller)
Ask the reader: "What does money mean to you?"
1- freedom from worry/fear of the future
2- not having to work
3- buying fancy stuff/things you deserve (nothing but the best for the _______ family!)
4- a reward for working hard in your career
5- opens social doors (dreams of fame/hobnobbing with important people)
6- ego reward (feel like you're keeping up OK with the Joneses_
7- sense of responsibility to use it for the good (JD Rockefeller)
MMMB- Other thoughts
1- Americans like to fantasize about wealth and the toys it can bring them. But few really want to achieve wealth, because it's too hard and humans are naturally lazy. Now if they could just win the lottery..........
2- Being wealthy means you HAVE money. Not that you MAKE money, or that your stuff COST you a lot of money (most of it borrowed from a credit card company or bank and not yours anyway, until the interest comes due). Being serious about having money means you are reluctant to spend it, or at least that you take the movement of money OUT of your bank account very seriously, and consider each transaction on a case-by-case basis against your values (ie how much is this big-screen TV or pair of Manolo Blahnik shoes costing me in time working as a slave for The Man?).
Example: shopping with a friend who gravitates toward tasteful but very expensive stores, pulling designer clothes off the rack and truly contemplating a purchase that I wouldn't dream of making myself. If I can't afford that shirt in terms of the hours worked at my job (which pays me more than I know she earns at her job), then how in the world does she think SHE can afford it? Well, her thinking might go like this, and she pats herself on the back for it: I used to spend money I didn't have (credit card debt), but my hubby taught me to only spend the money we DO have, so now I just look at the checking account and spend ONLY what's in there!
2- Being wealthy means you HAVE money. Not that you MAKE money, or that your stuff COST you a lot of money (most of it borrowed from a credit card company or bank and not yours anyway, until the interest comes due). Being serious about having money means you are reluctant to spend it, or at least that you take the movement of money OUT of your bank account very seriously, and consider each transaction on a case-by-case basis against your values (ie how much is this big-screen TV or pair of Manolo Blahnik shoes costing me in time working as a slave for The Man?).
Example: shopping with a friend who gravitates toward tasteful but very expensive stores, pulling designer clothes off the rack and truly contemplating a purchase that I wouldn't dream of making myself. If I can't afford that shirt in terms of the hours worked at my job (which pays me more than I know she earns at her job), then how in the world does she think SHE can afford it? Well, her thinking might go like this, and she pats herself on the back for it: I used to spend money I didn't have (credit card debt), but my hubby taught me to only spend the money we DO have, so now I just look at the checking account and spend ONLY what's in there!
MMMB
Don't forget some of these other "metaphors"
One particular friend who has money, and doesn't really have money problems, but who just can't conquer his lack of confidence and his emotions when making investment decisions. He buys tech stocks, watches them go up a lot, sells them at a profit, and then watches the stock go higher still, a LOT higher. He hates himself for missing that big move. So he puts the money into ANOTHER tech stock that goes to zero. He hates himself again. Other times he's hamstrung when it comes time to buy more of a stock that goes against him. Lots of self loathing for a guy to do battle with.
Another "former friend" who is a single girl with a great career but after 13 years of working for the man has NOTHING to show for it economically. Well, except for a big slug of credit card debt, and the fact that she firmly believes she deserves to have a new fancy leased car every two years. Of course after seven cars she can't even really remember some of them. :)
And of course let us not forget Jukie and Jad. Some day I should send them (severally likely) a fruit basket for giving me one of my most formative experiences about debt and unhappiness. How a lifetime of "short-term greedy" decisions, a lack of teamwork, and an astonishing lack of understanding of what a cash "buffah" is can drive people to divorce, laughable conversations (No more manicures! No more computer games!!) and utter misery.
And then my business school classmate who despite her high end wall street career and pretty meaningful savings, still has surprisingly Victorian ideas about women and money.
How about the former colleague who put $75 grand into a hole in the ground? And who couldn't handle it when his coworker didn't own a house and didn't want to BUY a house?
And the other colleague who couldn't help but ride that colleague, teasing him about his "Yugo" and the "hubcaps in his front yard"...?
How about me? I didn't become a truly confident analyst with good skills until I didn't really need a job to work. Actually more accurately when I hit the "13 year buffa" mark...
Aunts (one in particular)
Siblings (two on my side, one who says "gimme something that'll double!") and one on your side...
Parents, including crying at the kitchen table but aggressively tackling a subject and learning and getting pretty good at it. And another parent who confuses "risk-taking" with testosterone.
More later!!! What do you think???
One particular friend who has money, and doesn't really have money problems, but who just can't conquer his lack of confidence and his emotions when making investment decisions. He buys tech stocks, watches them go up a lot, sells them at a profit, and then watches the stock go higher still, a LOT higher. He hates himself for missing that big move. So he puts the money into ANOTHER tech stock that goes to zero. He hates himself again. Other times he's hamstrung when it comes time to buy more of a stock that goes against him. Lots of self loathing for a guy to do battle with.
Another "former friend" who is a single girl with a great career but after 13 years of working for the man has NOTHING to show for it economically. Well, except for a big slug of credit card debt, and the fact that she firmly believes she deserves to have a new fancy leased car every two years. Of course after seven cars she can't even really remember some of them. :)
And of course let us not forget Jukie and Jad. Some day I should send them (severally likely) a fruit basket for giving me one of my most formative experiences about debt and unhappiness. How a lifetime of "short-term greedy" decisions, a lack of teamwork, and an astonishing lack of understanding of what a cash "buffah" is can drive people to divorce, laughable conversations (No more manicures! No more computer games!!) and utter misery.
And then my business school classmate who despite her high end wall street career and pretty meaningful savings, still has surprisingly Victorian ideas about women and money.
How about the former colleague who put $75 grand into a hole in the ground? And who couldn't handle it when his coworker didn't own a house and didn't want to BUY a house?
And the other colleague who couldn't help but ride that colleague, teasing him about his "Yugo" and the "hubcaps in his front yard"...?
How about me? I didn't become a truly confident analyst with good skills until I didn't really need a job to work. Actually more accurately when I hit the "13 year buffa" mark...
Aunts (one in particular)
Siblings (two on my side, one who says "gimme something that'll double!") and one on your side...
Parents, including crying at the kitchen table but aggressively tackling a subject and learning and getting pretty good at it. And another parent who confuses "risk-taking" with testosterone.
More later!!! What do you think???
More MMMB
Another character: Middle-aged guy who buckles down to create some personal wealth/retirement savings for himself and his wife. He reads all about personal finance, divines the secrets of investing and spends hours, no days, putting together a detailed spreadsheet calculating his future wealth. Problem is, his plan relies heavily on SAVING. And wifey doesn't like to save, she wants to SHOP. In fact it's a major hobby, one she practices with family and friends, which also makes it an EMOTIONAL need for her. Not shopping would take a lot of joy out of her life. Sooooo, hubby's financial strategy and longterm dreams of financial independence come into direct collision with wifey's near-term goals for her personal happiness. What can they do? How much investment does hubby now have to make, not only in his career to make the money he plans to save, but in educating wifey about money (of which she knows little), how his scheme will work, and how it will ultimately (but NOT immediately) make her happy. Mmmmmm. Tough one. She knows she's relatively happy now, with her current spending allowance, though she would like some new furniture and gee, when they have kids she really doesn't want to have to work, but then that's what marriage is for, right? Hubby can work! He really seems to like it (he's doing it all the time) so what's the big deal? And who doesn't work, anyway? Why would I give up shopping, fixing up our home, and going on vacation now, all so we can sit around 15 years from now and get in each other's hair?
MMMB- Oooooo, this is KA fun!
Mopey!
I really think we hit on something this time! Yes, yes- how DOES a surfer dude support himself without worrying about money all the time? Answer: he lets Apu do all the work!
Granted, we have to come up with another metaphor for Apu. I don't want to be crass, or un-PC (really, I'm pretty PC for real, folks!). Besides, it's too convoluted a reference (I'd have to get into the whole Sims story, and most people won't know it).
I also want this "book" to be unpractical. Not a do-it-yourself thing. That won't sell. People feel too guilty about why they're not successful with money, and too apathetic when faced with the stress of handling their finances. I think self-help financial literature will be out of vogue, as the Boomers discover just how much trouble they're in financially in the next few decades. Money will go from being an intoxicating subject, to an overwhelming and unwelcome one.
So, I want to write more of an "interesting" book about money. We'll be the Malcolm Gladwells of personal finance, creating a voyeuristic way of thinking about money rather than a participatory one. No judgement at all- just what we've observed. The theme: anecdotal ways that money and social decisions intersect. Take the emotion out of it and just do some story-telling. Take the mystery out of it- one's financial situation is just a consequence of many, many tiny actions over many years. It's hard to see because the human mind doesn't grasp things longterm (no fire-fighting qualities needed here!). As we may recall, Steven Levitt gets into this a bit when he describes why policy-makers and the general public can't get their arms around the stats and see the truth in cause and effect- it's just not how the human brain works to see distant consequences of past actions, etc.
We could do it like this:
We describe a dude's life and break down his behavior into discrete segments, highlighting the various decisions, conscious or unconscious, that he makes along the way to lead him to his current position. There could be several characters we dissect in this way, each being a different chapter maybe:
1) a person in his/her mid-30s who hasn't changed his/her financial situation at all in an entire decade (who am thinking of here? ;))
2) the unconventional surfer who is living on muni-bond income (how does he do that?!)
3) the married couple in their early40s who want it all but unknowingly pared down their options when they had kids and are just now realizing it.
We make them mini-stories so that by the end of the chapter/book the reader starts anticipating the ending, happy or sad, financially independent or not for each character.
What do you think?
-Moops
I really think we hit on something this time! Yes, yes- how DOES a surfer dude support himself without worrying about money all the time? Answer: he lets Apu do all the work!
Granted, we have to come up with another metaphor for Apu. I don't want to be crass, or un-PC (really, I'm pretty PC for real, folks!). Besides, it's too convoluted a reference (I'd have to get into the whole Sims story, and most people won't know it).
I also want this "book" to be unpractical. Not a do-it-yourself thing. That won't sell. People feel too guilty about why they're not successful with money, and too apathetic when faced with the stress of handling their finances. I think self-help financial literature will be out of vogue, as the Boomers discover just how much trouble they're in financially in the next few decades. Money will go from being an intoxicating subject, to an overwhelming and unwelcome one.
So, I want to write more of an "interesting" book about money. We'll be the Malcolm Gladwells of personal finance, creating a voyeuristic way of thinking about money rather than a participatory one. No judgement at all- just what we've observed. The theme: anecdotal ways that money and social decisions intersect. Take the emotion out of it and just do some story-telling. Take the mystery out of it- one's financial situation is just a consequence of many, many tiny actions over many years. It's hard to see because the human mind doesn't grasp things longterm (no fire-fighting qualities needed here!). As we may recall, Steven Levitt gets into this a bit when he describes why policy-makers and the general public can't get their arms around the stats and see the truth in cause and effect- it's just not how the human brain works to see distant consequences of past actions, etc.
We could do it like this:
We describe a dude's life and break down his behavior into discrete segments, highlighting the various decisions, conscious or unconscious, that he makes along the way to lead him to his current position. There could be several characters we dissect in this way, each being a different chapter maybe:
1) a person in his/her mid-30s who hasn't changed his/her financial situation at all in an entire decade (who am thinking of here? ;))
2) the unconventional surfer who is living on muni-bond income (how does he do that?!)
3) the married couple in their early40s who want it all but unknowingly pared down their options when they had kids and are just now realizing it.
We make them mini-stories so that by the end of the chapter/book the reader starts anticipating the ending, happy or sad, financially independent or not for each character.
What do you think?
-Moops
Saturday, July 29, 2006
MMMB: a scenelet
Surfer dude, how can you afford to do this?
Dividends...they eventually pay you back ALL your capital (see MO example) and then you just collect the annuity for forever into the future. As opposed to putting 20 grand into a nice car and not only not getting ANY money back (the car eventually depreciates to zero) but you have to put IN extra money (insurance, gas, repairs, lease payments, etc) to keep it and operate it.
Okay but nobody has the patience to WAIT long enough for the dividends to be meaningful like that. It'll take 20 years for you to get all your money back on a stock that pays a 3% dividend!
Moops, do we want this to be a conversation between EACH OTHER or between regular people (using our family members and friends as examples/metaphors--sufficiently disguised of course)? Or a combination of both?
Dividends...they eventually pay you back ALL your capital (see MO example) and then you just collect the annuity for forever into the future. As opposed to putting 20 grand into a nice car and not only not getting ANY money back (the car eventually depreciates to zero) but you have to put IN extra money (insurance, gas, repairs, lease payments, etc) to keep it and operate it.
Okay but nobody has the patience to WAIT long enough for the dividends to be meaningful like that. It'll take 20 years for you to get all your money back on a stock that pays a 3% dividend!
Moops, do we want this to be a conversation between EACH OTHER or between regular people (using our family members and friends as examples/metaphors--sufficiently disguised of course)? Or a combination of both?
