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Act Your Age (Financially)

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When I was young, I used to write a fake company name on all sorts of papers to make it look like my company stationary, like I was this big swinging successful entrepreneur like Andrew Carnegie. We’d play football in the streets and pretend to be Joe Montana throwing yet another touchdown pass to Jerry Rice. We tackle each other in the field and pretend we were LT (no, not Ladainian Tomlinson, the real LT, Mr. Lawrence Taylor) getting Joe Theisman, minus the snapping leg. The point is, when we were young we’d fantasize of a time when we’d be older and in situations that were fantastic (and, in the case of football, unlikely to happen too!). This is something that, for a lot of people, we never grew out of and that ultimately impacted our finances.

Well, I’ve been wanting to get a coffee grinder since we brought back some Kona coffee beans from our honeymoon. This item is a $20 little gadget that takes beans and turns them into powder that I can used in my free Gevalia coffeemaker (haha!). I was talking to Cap about it when he asked if I already had it (then he told me coffee was bad, fish don’t sleep, and that he doesn’t drink juice either — he’s quite the eclectic conversationalist), I expected him to tell me it was crap and that I shouldn’t buy it! That’s when I suggested that a coffee bean grinder is a luxury good, it’s an item that exists simply because man’s desire for a theoretically better product (freshly ground coffee) has created a device that will deliver it to him for a small price (fixed price of $20). It’s $20 that I feel is “beyond my age,” which I’ll explain momentarily, but one I’m still going to spend.

If you imagine that everything you buy is on a “path,” then you’ll want to progress on this path in a nice orderly and chronological way. The prime example is a car. If you work during high school and college, save for a car, you’ll probably get a “beater” or otherwise inexpensive car because that’s what you can afford. The point is to get from point A to point B in a means faster than by foot or by bicycle (or by parent). Knowing the awfulness that is a beater helps you appreciate the awesomeness that is a car that doesn’t need a rolling start. Unfortunately, some people get the benefit of their parents’ finances and get a beamer (BMW), rather than a beater. Those kids also, in many cases, seem to have much higher expectations of what the world is supposed to do for them (this is not a good thing). Those kids were supposed to go down this “transportation path” but were spiked in somewhere farther than they were supposed to be, thus causing them developmental harm.

For coffee, the path is less clear but I see it as: instant coffee, ground coffee & coffeemaker, whole bean coffee & coffeemaker & coffee grinder, etc (I’ll let you know when I get there). I know that ground coffee made from a coffeemaker is better than instant coffee (not that much better, but I’m a lazy person) because I drank instant coffee, perhaps I’ll find whole bean coffee, freshly ground, will be better than regular ground too. The point is, I may appreciate the luxury because I’ve had the regular or the economy versions, not because someone told me it was so much better.

What’s my point? My point is that so many people don’t follow the path from the beginning or time warp through the journey to a point in the future. They get a job and their first thought is to buy a luxury vehicle because they see executives driving them and they want to be a big shot. They see football players with enormous televisions on MTV Cribs and they want an enormous house with a pool and a pool table. They see the luxury brand names being worn by celebs and they want to feel special too so they break the bank getting LV. What funds all this? Credit.

The result is that many people fund their relatively lavish lifestyles on credit and then end up in thousands of dollars of debt. There’s value, both financially and developmentally, for following the path in an orderly fashion and not jumping farther down. You can’t skip your teenager years and you shouldn’t skip drinking instant coffee (it’s really not bad at all), enjoy the bad so you can truly enjoy the good (and not be in debt!).

{ 16 comments, please add your thoughts now! }

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16 Responses to “Act Your Age (Financially)”

  1. saladdin says:

    Lawrence Taylor. As a ‘Skins fan that name still scares me.

    He is the only defensive player I have ever seen that could win a game for a team, all by himself.

    saladdin

  2. GBlogger says:

    LT was a beast. I wish he hadn’t gone and done stuff like professional wrestling later…. but he still broke the mold for linebackers.

    I liked this post and especially the example of cars. I see a lot of young professionals just starting their careers — seeing a lot of 0s in their salaries for the first time — running out and buying expensive cars. Some of them are being careful and can probably afford it. But I get the sense that many are stretching out their credit, as Jim suggests. For me though, I give a pass if they or Jim want to indulge in the $20 coffee product. :-)

  3. jim says:

    He changed the game and elevated the importance of the blind side (the left side for right handed QBs) tackle… The Blind Side by Michael Lewis (author of Moneyball, another great book) is a great book that discusses it, both should be available at your local library now.

  4. Very well said Jim.
    I have discussed this at length on Dividend Money as well and found out that there is a flipside to the argument.
    I was VERY poor grwoing up. Trailer park and the whole nine – no joke.
    Anyway, now that I am at the point in my life where I feel comfortable financially becasue I have no debt (other than 4% mortgage) I have realized that I am highly risk averse.
    This has to do with your article because my experience down the path has now halted me becuase I am too afraid to take the next step. Not that buying nice “stuff” is exactly what I am talking about, but being scared to go into debt even on a well-thought out business plan that seems almost foolproof.
    Bottom line: Growing up at either extreme of the socioeconomic ladder messes with your head!
    -Tyler

  5. Micah says:

    You make a good point, but anyone who claims that instant coffee is “really not bad at all” loses a lot of credibility.

  6. jim says:

    hahaha Micah, cut me some slack :)

  7. Paul Petillo says:

    I agree with Tyler. But it seesm that whatever rung of the ladder you are on, there is enough financial pornography out there to mess up any one’s mind. I am beginning to think that there is so much information that most of us don’t need or want to hear, we have begun to turn a deaf ear to the fact that he/she who ends up with the most money wins. My household is in excellent shape but I still think twice about nearly every purchase. Not so when I was a young buck.

    And Jim is right as well. The whole idea that life is a path almost makes you wonder why are they all so different. I suspect that avoiding low hanging branches, working your way over downed obstacles are, for some folks, simply part of the journey. As Edna St, Vincent Millay once said, “It’s not true that life in one damn thing after another; it’s one damn thing over and over.”

  8. I like your point. There are no shortcuts, or if there are, at least you have to earn them (e.g., a young person who takes a big risk to start their own company, which is then hugely successful). Alas, this lesson isn’t taught enough by parents and teachers alike.

  9. Anonymous says:

    What if you never progress financially? It is very hard living on minimum wage when you are old enough to join AARP.

  10. I couldn’t agree with you more on this! I went to a high school in a very affluent neighborhood, and many parents’ gave their children new BMWs for 16th birthdays (and gave them additional new ones if they wrecked them). It made me sad for those kids — they were never going to appreciate that luxury later in life when they could actually afford it themselves. I totaled my first car, but it was a used 4Runner. I would have felt horrifically guilty had it been a luxury car. I graduated college in May and have been slowly upgrading my purchases — getting rid of the old full mattress for a nice new queen, upgrading linens from old hand-me-downs from my brother to nice new (and more girly) sheets and quilt. I still have many hand-me-downs, and will hang onto most of them as long as they continue to be satisfactory. But it is very enjoyable to slowly progress financially and earn the better things in life as I get there. I feel like I have acted my age financially quite well, but it’s sad for people who are given all of life’s luxuries before they’ve really earned them or know what it’s like without them. Or for people who think just because they have a credit card, they should live above their means. Thanks for this post.

  11. I agree. Live within your means and have common sense. We bought a coffee grinder a year ago and a Bunn Coffee Maker. We buy our Hawaiian coffee beans from Sam’s. I see it as a HUGE money saver compared to the $5 a cup StarBuck alternative. This is how we’ve gotten to the point we are today. We have five kids, am totally debt-free (including mortgage) and can sleep well at night.

    Wayne

  12. What a great article and so very true. Thise people that try to grow up too quickly (i.e. borrow money) will pay the consequences when they are older.

  13. Jim, I gotta agree with Micah: you blow your credibility with the insistance instant coffee “isn’t that bad.” I’d rather drink Army field coffee mer-mited out at noon!

    It’s a shame because you bring up some very good points, *especially* about cars. I saw a 19 or 20 year old college kid with a Jaguar on campus just this past week. Granted, it was a few years old, but still … a Jaguar!

    Although you do redeem yourself by acknowledging the Real LT as the greatest defensive player EVER.

  14. Laura says:

    I think if you work hard you´ll be Successful.
    laura.
    debt consolidation

  15. Laura says:

    I think a good way to be Successful is working hard.
    laura.
    debt consolidation

  16. mjmcinto says:

    Jim, I’d hate to see what ground coffee you were drinking that was just a bit better than instant. I will say this though, once you get to whole beans, yes, the fresh ground does make a difference. But the biggest difference is in the different types of beans. By this I mean the region and roasting of the bean. It sounds like you have some Hawaiian, which might be good, or you might find you don’t like it. The biggest thing is to try different beans from different regions and roasters until you find one that you like. My wife and I order ours online, as we LOVE good Guatemalan coffee, and while we can find some around town, the roaster we found online has the best.

    As for your financial path, I agree totally. When I have kids, they will be taken care of, but they won’t be given brand new expensive cars. They’ll either get cheap new cars, or dependable used. It’s my money, not theirs, and they need to learn to respect money, as I won’t be taking care of them forever, and once their on their own, they’ll feel a great sense of pride in knowing what they’ve accomplished if they aren’t spoiled from the beginning.


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