Saturday, October 13, 2007

Blog of the Week: Alan Haft

This week's Blog of the Week without question goes to: Alan Haft and his blog post

6 things Star Wars Teaches Us About our Money

The name pretty much says it all. I may be a little bias being a pseudo-Star Wars fan myself but the advice is not only entertaining it makes sense as well. For example:

#1 Start by wiping the slate clean

Master, moving stones around is one thing. This is totally

No! No different! Only different in your mind. You must unlearn what you have learned.

Lesson Learned: I totally agree with Yoda. After all, who wouldn’t? The creature not only managed to live nine-hundred years, but he beat the pants off an Evil Emperor four times his size.

When it comes to learning a few things about successful investing, the first place many folks should start is not by learning complicated investment formulas that ultimately few wind up remembering, but with a willingness to do what Luke was basically forced to do: unlearn some of the things you perhaps already know.

I guess the part that makes sense for me is the media in general presses upon you certain guideposts of what success is- advertising and the media tell you that success is:
  • a leased fancy new car,
  • a McMansion in the suburbs at 'interest only' rates,
  • And a platinum credit card that allows you to 'keep the line moving' instead of paying with slow, boring cash.

The reality though is usually a little bit different:

  • people with paid-off older cars have more capital to invest because they lack the added expense of a monthly car-note.
  • A McMansion with interest only rates initially will correct up sharply when interest rates adjust or when it's finally time to bite the bullet and start paying for some principal on your loan - this is all assuming that your McMansion wasn't overvalued in the first place.
  • Despite advances in technology, I think cash still pays quicker than credit or debit for that matter and as opposed to being 'slow & boring' cash is still pretty sexy in my opinion especially when you know that cash is yours.
As a final side note on paying cash over credit; The myth put out in society that credit is now somehow 'better' than cash, was quickly squashed twice back in Chicago, during my pre-good credit days:

  1. I was out on a hot*1st date, didn't have my checking account anywhere near balanced and decided to pay via my shiny 'platinum' card - to show what a big shot I was. I quickly handed the waitress my card, which was approaching the high 4 figure limit but not at it (at least I didn't think so) a few minutes later the waitress came back and said something to the effect of 'I'm sorry sir this card doesn't seem to be working, do you have another form of payment?" I was a little mortified and pulled out my wallet which was completely devoid of cash. I do believe, at this point I pulled out my debit card which I was iffy about already and handed it to the waitress. The conversation between me and my date was quickly getting 'frosty'. A few minutes later the waitress came back and with the same apologetic face said "I'm sorry sir, this card doesn't seem to be working either" I was double-mortified at this point and asked the waitress to run my first card a 2nd time. She agreed and the conversation between me and my date ceased and the embarrassed staring at the wall ensued. Finally, after a few minutes that seemed like hours, the waitress came back with a much cheerier face and said simply "it looks like we were having a problem with our card machine, your card went through". I was somewhat relieved but the damage to my image in my dates eyes was already done as it was obvious that I was close to my limit or else I wouldn't have been sweating bullets like I was. Needless to say there was no 2nd date.
  2. I was out with the girl I had been dating for a few weeks and I was trying to be 'spontaneous' (since I am a consummate planner) and I 'surprised' her by taking her out to a show and then a fancy dinner at a high end restaurant. The girl wasn't that impressed as she had already seen the show I was surprising her with and she even pretty much told me, she wasn't in the mood for fancy restaurant fair and was more in the mood for something very casual. Anyway, the waiter in this instance was very snobby and could tell by our age and inability to pronounce menu items that we were not as 'refined' as his typical customer. When the bill came, again, I pulled out the 'platinum' card to pay and this jerk-waiter pointed out the likely inability of me being able to pay cash by stating "Credit, I see" in a very condescending tone when he returned to pick up the bill. The card did not get returned this time but, If was able to whip out a $100 bill at the time instead of my 'platinum' credit card and it would have limited the ability of the waiter to continue treating me like the second-class citizen he seemed to think I was. By paying with 'cool' & 'hip' credit it only reinforced his opinion. Needless to say this waiter didn't get a very nice tip but, that respect I thought my platinum card would immediately provide was completely absent.
Anyways, Got off track by a bunch there but, definitely check out the article above, funny, entertaining and informative.

*by 'hot' I mean approaching the attractiveness of my current super-hot, dime-piece , sexy girlfriend. I mean honestly, for the record, above 1-date-wonder really pales in comparison.