Am I the only one who just noticed that it’s Wednesday? The holiday week with the free day is completely screwing me up.
Just to make this a relevant post:
Spend less!
Save more!
Invest!
Wee!
Delayed Gratification, Take II
How much would you pay for a kiss from the world’s sexiest celebrity?
That was the focus of a recent study that I can’t find today. There is no celebrity waiting in the wings to deliver the drool, and the study doesn’t name which celebrity it is. That’s an exercise for the reader.
This was a study into how we value nice things.
The fascinating part of the study is that people would be willing to pay more to get the kiss in 3 days than they would to get the tongue slipped immediately.
Anticipation adds value.
Instant gratification actually causes us to devalue the object of our desire.
This goes well beyond “Will you respect me in the morning?”
The last time I talked about delayed gratification, it was in the context of my kids. That still holds true. Kids don’t value the things that are handed to them.
The surprising–and disturbing–bit is that adults don’t, either. If I run out to the store to buy an iPad the first day I see one, I won’t care about it nearly as much as if I spend a week or two agonizing over the decision.
The delay alone adds to the perceived value. The agony turns the perceived value into gold.
If I spend a month searching for the perfect car, the thrill of the successful hunt adds less value than the time it took to do the hunting.
Here’s my frugal tip for today: Delay your purchases. While it may not actually save you any money, you will feel like you got a much better deal if you wait a few days for something you really want.
Handling a Windfall
What would you do if you were handed $10,000 tomorrow? $20,000?
The easy default answer–if you spend time in the personal finance world–is to pay off debt and save the rest.
But is that the right answer?
When my mother-in-law died, we inherited a little bit of money, a house that hasn’t been updated since the 60s, and a new-ish car that still has an active loan.
We also have about $16,000 in credit card debt and a small mortgage.
The Dave Ramsey answer would be to pay off the card at all costs and worry about the inherited house later, but that seems off. If we modernize the house and fix the things that are broken, we have a mortgage-free rental property. Our local rental market is strong; we should be able to clear $800 per month after expenses.
Is the right answer to pay off our card and scrape to get the house ready or should we fix up the house and use that new income to pay off the card?
My wife has also inherited an IRA that–due to its status as a Beneficiary IRA and the fact that there have been disbursements–has to be drained within 5 years. It’s not huge. After taxes, it’s about the size of the car loan. Should we make the $200/month payments, or cash out the temporary IRA and make the car loan go away immediately? Should we cash out the IRA and open one for my wife?
Although the cause was sad, these are good problems to have. If we manage this right, we’ll be more financially stable than we would have been for decades, otherwise.
I want your opinion, please.
2 questions:
1. House or credit card?
2. What would you do with a $10,000 IRA that has to be cashed out over the next 5 years?
Horseback Riding Lessons
For the past couple of years, my daughters have been riding in horse shows with a local saddle club. We’ve been lucky in that my wife’s cousin has let us borrow her horse for the shows, so costs have been minimal.
Unfortunately, that horse isn’t available this year. We knew that a few months ago, so the plan was to take a year off from the shows and focus on lessons, to get the girls some real skills. We found a great instructor at a stable about 30 miles from our house. Since we live less than two miles from the border of the biggest city in the state, that’s a comparatively short drive.
We pay her $200 per month for 1 lesson per week for both girls. They each get 30-45 minutes on the horse during each lesson.
Now that show season has started, the plan seems to have changed. The girls will be riding a different borrowed pony tomorrow. The shows cost about $50 for registration, lunch, and gas. Our club has 1 show per month, but my wife has assured me they’ll only be hitting three shows this season and limiting the number of events to keep the cost down.
The direct costs aren’t too bad, but there’s a problem with keeping-up-with-the-Joneses accessorizing. Vests and boots and helmets and belts and shirts, oh my.
I’d guess our costs for the summer will be $300 per month.
One thing we’ve been considering is buying a pony. We can get an older pony for around $500-1000. Older is good because they are calmer and slower. Boarding the thing will cost another $200 per month. We’ve been slowly accumulating the stuff to own a horse, so I’m guessing the “OMG, he let me buy a horse, now I need X” shopping bill will come to around $1500, but I’ll figure $2000 to be safe. We already have a trailer, a saddle, blankets, buddy-straps, combs, brushes, buckets, rakes, shovels, and I-bought-this-but-I-will-just-put-it-in-the-pile-of-horse-stuff-so-Jason-will-never-notice stuff. We’re certainly close to being ready to buy.
(FYI: If you’re starting from scratch, don’t think you’re going to get into horse ownership for less than $10,000 the first year, and that’s being a very efficient price-shopper.)
So we’re looking at $5400 for a horse, gear, and boarding the first year. If we cancel the lessons, by spring we’d have $2000 of that saved and most of the rest can be bought over time.
On the other hand, if we go that route, we’ll never save enough to buy the hobby farm we’re looking for.
Decisions, decisions. I should just buy a new motorcycle. Within a year, I win financially.
Integrity
I’ve spent my entire adult life trying to live to a fairly strict code of behavior.
I don’t cheat. Not at games, in my relationships, on my taxes, nothing. I don’t cut corners or try to get away with things.
The reason isn’t that I’m trying to be some fictional knight in a storybook. It’s been my experience that cutting those corners always seems to be more expensive in the long run, whether it’s fines, lost friends and relationships, or even a general crappiness of life. The people I know who are always trying to get away with stuff or get ahead at someone else’s expense have the least, whether that’s money, friends, loved ones, or happiness.
Living a noble, honorable life has benefits.
I don’t pay fines and penalties often. Just the occasional speeding ticket, but that’s been one in the last 10+ years. Not getting fined for parking in a handicap spot or cheating on my taxes makes it far easier to save my money and build my wealth than constantly handing money over to the government. I’ve got a friend who can’t keep himself away from the justice system. Spending 3 or more months in jail every year makes it hard to keep a job or have a relationship with your family.
My friends know they are my friends. They can count on me and that means I can count on them. They also know that if that equation falls out of balance, it will be over. I only want friends I can count on. If you can’t have my back, or you feel a need to gossip about my life, I don’t want you in it.
My kids have no insecurities about my love. They know I am here for them, no matter what happens. Even if the occasional temper tantrum has them screaming that I clearly hate them, they know better. They know this father’s love is unconditional.
Work trusts me. Last year, I basically created the department I work in my telling my boss that I was sure I could make it work.
I have some badass karma. In general my life if pretty good, and I like to think it’s because I work to be a good person, do good things, and treat the people in my life right.
There are some downsides. Not everyone lives like this and I have problems relating to them. I’m not a sympathetic person to someone who tries to duck out on child support or who has to spend 30 days in the workhouse for trying to hock a stolen stereo. I can come across as a bit self-righteous.
I expect the people in my life to live the same way and treat me the same way. When that fails to happen, those people are nearly always evicted from life.
Life’s too short for people willing to screw you over.
Sometimes, though, that eviction is too complicated to do quickly, cleanly, or easily. That’s can be a turmoil in my life, and I hate turmoil. I don’t normally have to debate the correct course of action. Something is either right or it’s not. If it’s not, I know it and it doesn’t get done. If I have to wonder, then it’s definitely not right.
Every once in a while, I get stuck with a choice between shitty options and that’s where this system fails. Sometimes, no option is good, right, and proper. Every choice has a big downside, and none of the choices are clearly right.
That’s turmoil. Indecisive, emotional, horrible turmoil.
How was your day?
Does Amanda Bynes Need a Conservatorship?
The publicly documented downward spiral of Amanda Bynes may be reaching its breaking point. She has been on psychiatric lockdown for the past three days, and her parents are petitioning for conservatorship in California
on the grounds that they believe she is suffering from acute schizophrenia. They claim that the troubled starlet is unable to make safe decisions regarding her own well-being, not to mention the safety of others. The issue is complex, but the former childhood star has demonstrated that she meets the criteria to have external guardians instated to protect her from unpredictably irrational behaviors.
This development is the latest in a long saga of antics for Bynes, and the recent news report inserts a tragic twist into her somewhat comedic downfall. She had a pristine public persona only a year ago; however, at this time, she was caught publicly smoking marijuana. No one expected this incident to escalate, and it was treated like an innocent youthful infraction; however, the act recently turned criminal when she was reported for smoking in the lobby of her apartment complex.The comedian ran from the arriving police officers, and hurled a large cannabis apparatus out of a skyscraper window. The water-pipe was never found, but it presumably shattered upon impact. Bynes was incarcerated by the New York Police Department. During this time, the actress accused law enforcement of sexual assaulting her in a very lewd manner. Her absurd claims were never substantiated. The case against her is pending, and she has been evicted from her residence.
This was not the first criminal case against Bynes; she is also dealing with hit-and-run allegations in California. It was also not her last interaction with the police. Most recently, the actress doused an elderly woman’s driveway in gasoline and set it ablaze. She accidentally covered a puppy in the flammable liquid, so she ran down the block looking for something to save the animal from catching fire. After ransacking a convenience store, officers accosted her. The exchange resulted in the psychiatric hold that has been placed on Bynes.
Unfortunately, grounds for conservatorship can be exceedingly challenging to meet. Clear proof of mental illness needs to provided, and the standards are rigidly strict; however, if anyone has showcased the fanatical craziness that constitutes a lack of personal responsibility, it is Amanda Bynes.
Her schizophrenia is no longer dormant. The actress has become obsessed with plastic surgery, and she has deformed her face with cheek piercings. She uses online social networks to decry public figures for their ugliness. Victims of this attack include even Barack and Michelle Obama. Furthermore, she makes offensive sexual remarks towards rappers, and she wants to be a hip-hop artist herself. She has spent fortunes on a wig collection, and she employs a different style at every court appearance. The actress even used one as a disguise for an incognito trip to a trampoline emporium.
Anyone that has seen her Nickelodeon program would not be shocked to learn that she was schizophrenic. The role had her switching between dozens of identities for different skits, and she even played a character that was, in effect, obsessively stalking the star herself. “The Amanda Show” was neurotically fast-paced. Ultimately, the entire program can now be viewed as an eerie foreshadowing to the budding of a latent psychological disorder. If the legal standards of insanity are not met, then she will be free to wreak havoc on herself and others.
