How to Give Yourself a Financial Fighting Chance

Despite our government’s attempts at self sabotage , it’s looking like the recession must be on its way to being over. Because wouldn’t you know it, some folks are back to making what I would consider questionable financial decisions.

Nothing major, really. Individuals I know are just taking out small (sarcasm) loans and financing a vehicle for nothing less than forty thousand dollars. Not bad, right?

No, not bad if this loan was going to a CEO, an attorney, or a chemical engineer. You know, where that type of vehicle is affordable and not a budget stretching extravagance. But actually, this car was being purchased by an “average joe” like you and me. A member of the working middle class.

And to make matters really sound stupid, this working class dog makes a landlord rich by making rent payments, and carries large credit card balances with interest attached. The type of person that when they decide to attempt to straighten out their finances, they focus on minutiae like clipping coupons and skipping one Starbucks trip a week.

Genius. Apparently, no one read my post about the myth of our American Dream.

To give yourself a fighting chance financially, you have to focus on making smart choices concerning major money decisions. Like maybe not buying a car that you suddenly have to live in because your landlord put you on the street for non-payment. Or making your college choice that will force you to take the loan with the most zeroes at the end of it.

I’ve made my financial gaffes. They are mistakes that I will share with my kids to ensure that they don’t do the same thing and put themselves in a debt filled hole. But I can say that I’ve never laid out 40K for my commuter car.

Remember, people!! Concentrate on the big stuff!

Big Ones

Home Sweet Home – 18 years ago, my wife and I bought a small colonial style home on a main street in our town. Our family has grown (and grown up) in about 1200 square feet of living space. People will get a puzzled look on their faces, wondering how four people can possible co-exist in such a small area. Honestly, I could never see what the big deal is.

Have I been tempted to upgrade my house at times? You bet. But in the end, more space is not required. We have a large deck on the back of the house, which greatly expands our living area for three seasons. And we initially bought the house for the big back yard, which we knew our kids would love to play in.

Speaking of love, I mostly like my home for the miniscule tax bill, and the miniscule mortgage that goes along with it. When it comes to house loans, small is better.

Whoa, Sweet Ride – 40K? Really?? Sure, buy a $40,000 car or SUV – if you have a half million in investment accounts or cash. Or you’re a neurosurgeon. Otherwise, you can’t afford it! Didn’t your parents tell you this stuff?

And what’s with the trading in of a practically brand new vehicle for the latest model? Why don’t you just light a couple thousand greenbacks on fire before your new spirit crushing car loan comes in??

This is probably the poorest financial decision most people make. It’s a hunk of metal, for God’s sake. You’re already going to spend a boatload on commuting, gas, tires, maintenance… is a payment necessary? And if it is, does it need to be $800 a month??

My broken financial rule - charging a beach vacation — My broken financial rule – charging a beach vacation

Destination: Beach! – Let me tell you a story of how I was stupid, as in young and stupid. I liked credit cards. I liked the idea of using them instead of cash, enough where the honeymoon trip to Mexico for the wife and I was mostly paid for via the plastic. Among other things.

That trip was incredible. Ever been to Cancun? What a place. It’s the spot to go for super authentic tortilla soup, scorching sunlight, fancy cocktails, and learning to evade drinking water that doesn’t come in a sealed bottle.

What can I say? I was in love. Using Visa to pay for what is now memories seemed like a no-brainer!

My wife and I have been married for almost 20 years, and that card balance hung around at 12K for the longest time. Instead of being smart and paying it down as soon as possible, I made the minimum payments (cringe worthy, I know). I eventually got tired of looking at that balance. Earlier this year, with $3,000 left, I blew it up and paid it off.

Yup. Your math is correct. That’s almost 20 years of making interest payments. Totally brilliant.

Which will show you that even those who know what to do are still capable of doing stupid things. Hopefully, your mistakes increase your intelligence and awareness. Then, when someone tells you they just bought a $40,000 vehicle, instead of saying “nice, sweet ride”, you exclaim:

“Perfect! Now you can apply for the food stamps you’ll need.”

The Takeaway?

For my kids, it’s this: forget about the 4,000 square foot house, the 400 horsepower car, and life events that suck all of your money into a debt riddled vortex.

Three things. House, car, consumer debt. Get them right and you’re golden.

What say you? Are the “Big Three” enough to turn you into a financial shining star? What would you add to take it further? Let me know with your comment!

How to Harness the Power of Summer: Falling Off the Grid

Many of you that commented on the last post may have noticed it took a painfully long time for me to respond to those comments. It wasn’t because of a sudden surge of laziness or arrogance – I appreciate every comment I receive, whether I respond or not, and think they equal internet gold.

The reason is I simply fell off the grid – and I have nothing to blame but this beautiful season they call summer and the equally important summer vacation. There was no checking of blog stats, no Facebook or email notifications. For the better part of two full weeks.

The obvious thing to do is when traveling, leave the technology at home. The kids did have their iPods with them to entertain during rainy periods – and there were a few of those. But my wife and I left the laptop at the house – and if you read the last post, you probably figured out we don’t own an iPad or a smartphone. This sets us up to enjoy important vacation activities.

Our most anticipated summer activity is the trip to Cape Cod, to enjoy the Atlantic Ocean and its breathtaking views. We usually splurge on this trip, renting a loft room at a hotel facing the ocean, just a few steps from a beautiful beach. We are all about being beach bums here, so we spend a lot of time sitting on/ walking down the shoreline and jetties. We also do our fair share of dinners out, drives for ice cream, and a round or two of mini-golf. Total relaxation.

Whenever we cross the Bourne Bridge to head to the highway and leave the Cape, it is always with a heavy heart. It’s our favorite getaway destination, bar none. This year, we stopped at home to refresh our suitcase, and we were gone again. Many of our summer weekends are spent boating and swimming in Lake George, and we are fortunate that my wife’s parents have a house nearby that makes for a very short trip to the lake. Total relaxation mode is still in high gear here, as the boat is anchored in the warm bays of the lake for the kids to swim, kayak, and snorkel.

Done on the lake, we’ll head back to the house we call “camp” and spread out on the spacious front porch for cocktail hour. Accompanied by fine hors d’oeuvres, drinks will be had and dinner preparations made. From the comfort of Adirondack chairs, I may spy my daughter on her iPod, and feel a slight twinge of internet deprivation.

“I could be missing important information!”, I’ll think to myself. Thankfully, the feeling lasts only a few seconds and I’m back to sipping vodka.

Another favorite summer pastime is attending rock concerts in Saratoga Springs. Thanks to a good friend, we were able to see Tom Petty & The Heartbreakers from 5^th row seats to initially start the vacation. Of course, high technology was prevalent at the show, with the majority of people in front of us using their phones to take photos of the band…and themselves. My “dumb phone”, which takes 1890’s quality photos, stayed right in my pocket. Had no choice but to simply enjoy the music and watch a band whose talents have been honed razor sharp over the last 35 plus years.

Actually watching the band play their entire set without taking a single photograph with your phone is a very old-school way to enjoy a concert. Very few people do it that way.

Yup, we were this close. Thanks to my friend Jeff for the primo seats!

I know it sounds like the above was enough to fill vacation time, but I enjoyed yet more low tech, high touch activities. I played golf with my Dad and his friends in a country club setting, read a couple of chapters in a book (yup, I turned pages on an actual book), and cast a fishing line into a river a few times as well.

A summer vacation like this one reminds me of the summers of past, free from school. Outdoor activities were the norm and the only “high technology” that was enjoyed was falling asleep to the television, being too exhausted to watch. Or spinning albums on my stereo turntable long into a warm, breezy night.

It also brings back memories of my grandparents. Television was their technology of choice. Or perhaps an old transistor radio, its sound echoing to the back yard patio, among the fruit trees and grape vines.

Twitter, Facebook, and email fade into the distance. The summer sunset, my family on our deck, and the rising of the moon are all important in the seasons of here and now, and those that we may be privileged enough to have in the future.

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Blowing Up the Fallacy of the “American Dream” – Old School Style

Our nation has a happiness fetish…much of economic misery we see today is due to the unbridled pursuit of bigger houses, fancier cars, and more exorbitant trips. The lure of consumer culture and an obsession with more is precisely what keeps so many from contentment – Alexander Green, Beyond Wealth.

In the last post, I spent time imploring my kids to cut their own path. To not mindlessly follow the siren song of excessive consumerism – which is an advanced skill for many Americans. But how, you may say. How do we go without the necessities of life?

Well, you can start with the realization that they’re really not necessities at all. Just part of this overly comfy, cozy world that you’ve grown accustomed to.

I stated that my grandparents’ generation had it far tougher than we do presently, and they “made do”. Our country is far richer and loaded with more opportunity now than in their day. That statement proved to be a lightning rod, prompting one commenter to label my post propaganda and a “total load of crap”.

Here’s the real propaganda: Marketing geniuses are at work 24/7 to separate you from ALL of your money, to convince you that happiness is found with things, and not with people or shared experience.

I will, no doubt, be taken to task for comparing the sophisticated modern American to Depression era immigrants in taste and consumption. That’s the way it goes. I grew up observing these amazing people as happy and satisfied, and not deprived. I figure if they can do it, we can to.

Don't they look happy? My grandparents at our wedding, with my Uncle Mario (standing). Exemplified success without needless luxury. — Don’t they look happy? My grandparents at our wedding, with my Uncle Mario (standing). Exemplified success without needless luxury.

So, kids, if I haven’t lost you yet, put down the iPod, and read along. I have a list for you (it’s the format web readers like the most) that you will enjoy looking at.

Disclaimer: First and foremost, nobody’s perfect. We’re human. I can still be tempted by the latest and greatest, just like everybody else. And I am not deprived by any definition. In my house there is an opulent new (albeit small) kitchen. I like expensive beer/wine, typically spend summer weekends in a boat on a lake, and I’ve grown enamored with the heated leather seats in my wife’s VW. Yes, I’m a little fancy.

With that said, here’s a few things that your average neighbor deems absolutely necessary, but your great grandparents’ generation would see as frivolous and pointless:

1. Oversized House / Oversized Mortgage – This may not be much of an issue, as it seems more and more people are smartening up and realizing they don’t need a 4000 square foot house with 2 fireplaces and a hot tub. And you have the great experience of growing up in 1,200 square feet and being creative with your space. You also spent time growing up in your great grandparents’ house, a modest brick ranch that they built and (gasp!) paid cash for. While it’s not entirely possible to pay cash for a house these days, you can still do yourself a favor by thinking “small house/big down payment”. You’ll thank yourself when you’re sending a tiny payment to the bank each month, instead of taking out a loan to pay down your loan.

2. Luxury Car. Or A Massive Car Payment – My grandparents were immigrants with little education. But they never drove or owned a car, preferring to take public transportation or, believe this, actually WALKING to get to where they had to go. I know, crazy right? But think of the thousands of dollars they saved never paying for gas, insurance, maintenance, or a ridiculous monthly obligation to the bank. Looking smart now, aren’t they?

In this life, massive car payments are NOT a requirement, despite what you’ll hear. At 18, I bought my first car with $1,000 cash, and although I’ve done the payment thing since then, the trick is to keep it small and then keep driving your car without the payment.

And those BMWs and Mercedes that everyone is fooled into thinking are the best cars? Mostly bought on credit by people that can’t afford them. Trust your Dad on this one. The Chevy, Honda or Ford does most of the same things. Cars = transportation (not status). Period. Point A to Point B.

3. Gigantic TV with 10,000 Premium Cable Channels – One of the advantages to owning a small house is the lack of room to squeeze a 92 inch television screen. Which to me, is a good thing. Do I really need any more incentive to sit on my lazy ass?

Again, this is American over consumption at its finest. Kids, its totally unnecessary to own a TV that can crush and kill you if it tips over at an inopportune time. Don’t bother. And that $200 monthly to the cable company for the privilege of watching multiple channels filled with garbage? If you must have cable, at the very least don’t subscribe to 300 channels and become a couch crashing sloth. The “premium” service is a premium rip-off.

4. All The Latest Gadgets – Yup, I know you love your iPods and the laptop (both of which are becoming old-school themselves). But when the iPad 10 comes out and dopes are standing in line at midnight to get one, I know you won’t be one of them, because you will have read this. The new will be obsolete in no time at all. Repeat after me: The latest and greatest is a scam. I can be perfectly happy paying much less money for last year’s model.

There. That felt good, didn’t it?

5. Restaurant Take Out – Here’s another disclaimer: I love restaurants. My grandparents’ owned two, and I grew up and worked in one for decades. I like going to restaurants now. But what I can’t fathom is getting lunch at a restaurant every day. That’s at least a couple thousand dollars out of your pocket at year’s end. Sweet!

At my office, I garnered the nickname “Joey Leftovers”. You probably know why. Because I was bringing my lunch from home. Every. Single. Day. Will I occasionally take a trip to my favorite import store to grab a nice Italian American lunch? Absolutely! However, it’s a treat. Not a daily requirement.

6. Fancy Coffee – This one could fall under restaurant take-out, but I feel it deserves its own category. Again, I like fancy coffee. My grandmother always made it. But she would have keeled over if she ever had to go to Starbucks and pay $7 a cup for it! I highlight this just to show you how ridiculous that price looks. Starbucks has great product. It’s not that good.

You can make great coffee at home for pennies a cup. You don’t need a mortgage to support your caffeine habit. Baristas should be lonely once in a while. Make your coffee at home!!!!

7. Outrageous Vacations – After sending my daughter on a school trip to Italy, I had second thoughts on including this one. However, that trip was a deal (and an opportunity) that could not be passed up. In the age of Facebook, it certainly seems that we are all trying to “one up” each other when it comes to our luxury vacations. That’s where things get dangerous. The keeping up with the Joneses mentality.

Kids, I think you should travel. See as much of the world as you can. And keep going to your favorite beaches long after your parents prefer to stay home in the rocking chair.

But here’s something to think about. Nonna and Pop went back to Italy – once. As far as I know, it may have been their only vacation in 60 years. And I don’t think the lack of vacations really mattered to them. Do travel, but know it is a luxury and a privilege when you do so.

8. Convenience – There are many other facets of luxury that your great grandparents had no or little use for. They worked their asses off, so a gym membership wasn’t required. Nonna used the clothes dryer more as an end table than a dryer (she preferred drying racks). And there was no recreational shopping. Unless it was at the aforementioned import store and she decided to splurge on cheese.

There were a myriad of ways they shunned convenience, and that’s not necessarily a bad thing. Making a practice of that will save you money, keep things simple, and make you happy. Advancements are cool in terms of medicine and technology, but don’t make your life so convenient that you never have to actually move to change a channel or turn off a light.

They did many things the hard way. Once upon a time, that’s what the American dream was all about.

OK, fire away. I know I’ve pushed some buttons here, especially if you’re what I like to call a “new-schooler”. Am I right? Have we become too fancy and accustomed to luxury? Or am I stuck in the Dark Ages, with not the sharpest torch in the shed? Start a conversation in the comments section.

Chasing Your Version Of “The American Dream”

The American Dream is dead.

At least, that’s what I’ve heard. You know the culprits – High fuel prices. A “can’t shake it” unemployment percentage. (And in a 2017 update) The impending automation of just about all of our jobs.

The dream is dead.

Do you disagree with that? I sure do. The time is here where you should try to capture your own slice of this attainable Dream, and the easiest way to do it is go old-school.

Are you ready for old-school? It’s the place where luxuries are luxuries (and not “needs”), and that the ultimate goal of convenience is looked at with a jaded eye.

It’s that crazy place where if the word entitlement even crosses your mind, it’s how you feel entitled to this: the opportunity to grab a job (sometimes two) or start a company and then proceed to scratch, claw, and earn everything that you have.

It’s the school where our previous generations roamed, survived, and subsequently kicked some ass.

As a responsible parent of two kids, I feel it is my duty to inform them of the advantages of old-school thinking and philosophy.

I believe I’m a good parent, but self doubt can creep in, leaving me wondering, “Am I doing enough?”

You can think of this post, if you want, as a letter of love and advice to my children. It is. But, I’ve no doubt that 90% of adults, myself included, can be helped by it as well. For me to do my job as a Dad, the American Dream needs to be outlined in a certain manner: the way it used to be.

You see, kids, back when my grandparents (your great grandparents) were around, they were the embodiment of the American Dream. Emigrating from Italy, they got off a crappy boat to walk our shores and make their lives here, in your city. There were mighty struggles back then, but they made a true success story as entrepreneurs, homeowners, and generally fantastic people.

Here’s where things get interesting for me. While modern Americans decry the Dream as dead, with their own struggles to make ends meet, I’m certain your ancestors would have thrived in an environment that we have today. This is the richest country around, with boat loads of opportunity to do well.

Yes, we had a Recession… but it was far from the Great Depression they lived through. And while this country is involved in wars currently, its arguably not the magnitude of World War II. I’m gonna say they had it a little bit tougher.

Nowadays, life is moving pretty quickly. The future is beckoning. Everyone wants to know what you’re going to do with your life. Peer pressure will ebb and flow, and the most well meaning people will tell you what you should do, what you should buy – and what you need to do to get it.

Dad Advice – I know it’s unsolicited, but here it is: Get your own version of the American Dream. Be different. Non-conformist. Don’t follow the herd. See the latest version of the Dream as it really is: a sham, a lie perpetrated to us by marketing execs with PhDs, determined to coerce you to part with all of your money – and lead you into a stressful life.

My grandparents did not have much education, but they had wisdom and common sense, in spades. As far as finances and economics, they were brutally smart on what to leave alone. Kids, I have to admire the fact that as I watch you grow up, you look like you will be treading the same path. You care about the environment like Nonna did (for Pete’s sake, she recycled potato chip bags), and you make purchases thoughtfully like she did. Buying things when she needed to.

You’re on the right track. Without a doubt. You want to hear how Nonna and Pop really blew it up? Most of the stuff that you grew up with, that people will tell you are life’s necessities, are in fact the very definition of luxuries. Nonna and Pop did without most of these luxuries – and wound up happy and successful anyway.

Next post: For the kids, and any adults that care to listen, I’ll detail all the stuff – cool, stupid, or completely unnecessary – that my super smart grandparents avoided on the way to forging their version of the Dream in the country they loved. Until then, feel free to liberally use the sharing buttons below to make your friends aware of this wonderful content!

Mike & Johnny

I was a bartender in my family’s restaurant for nearly 20 years.

It was probably the best job I’ll ever have. I served thousands of drinks to some of the most unique personalities I’ve ever known. I served lawyers who couldn’t stay sober, served guys who thought they were losers but they weren’t. Some were the best that humanity had to offer.

Lately, I think about sitting at the bar with my friend Mikey. Sitting with our drinks at the end of the night, as I was getting ready to close up. Closing time. Talking to each other through the murky haze of cigarette smoke.

And watching Johnny Carson. The Tonight Show. Remember Johnny? One of the funniest bastards to ever walk the Earth. With his sidekick, Ed McMahon. Hilarious.

I’d lock the front door, and sit back down. Have a drink. Smoke our own cigarettes. Maybe listen to a little Sinatra after Johnny signed off. And talk.

Mikey’s gone now. The memories remain. Thinking about the future is one of my favorite things to do. At times, it seems limitless. In my mind, I’m blessed with the best of everything. Even at my advanced age, my health is still pointed in the right direction.

Yes, there is a future. I have plans. Hopefully, God does not laugh. Even with the future ahead, it’s still fun to roll it all back. Play the movies in my head. The memories retreat occasionally, then come roaring back.

We’re at the bar, sipping a drink. The music of our lives playing in the background. Johnny sits at his Tonight Show desk, laughing. Closing time. Everything has to come to a close.

Image of Johnny Carson courtesy of Wikipedia.