Lazy Man and Money

Is It Really “Game Over” Financially When You Turn 25?

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Quartz media yesterday came out with an article stating “Your financial fate is sealed by the time you turn 25”.

That title was so strong that I knew I was going to write it before I read it. I simply couldn’t believe how it could be true.

In fact, I typed all the above before finishing the article. As I read the article, it seems like a case were the title doesn’t match the article’s text completely. Here are a few reasons why your financial fate isn’t sealed by the time you turn 25:

  1. The text of the article cites averages. Your particular case may not be the average. It might be, but it might not be. It certainly doesn’t feel that everyone’s financial fate is sealed by age 25 as the title seems to state.
  2. You might meet your mate after age 25. I did and it made a tremendous difference in both of our financial fate. It reduced our living expenses while increasing our income.
  3. We were mindful about our financial situation – The reduced living expenses allowed us to save and invest more. I put more time into learning about personal finance. Compound interest has been wonderful for us. All of this happened after age 25.
  4. Percentage gains are not what they seem – The article seemed to show that the average person got their biggest percentage gains from age 25-35. It seems to me that you could at the Salary.com data for almost every profession and see that the biggest change is going from a starting salary to a person with 10 years of experience. It’s easier to make bigger percentage gains when you are starting out at smaller numbers. If you were making $50,000 and got a $25,000 raise, that’s a 50%. If you are experienced and making $125,000 and get a $25,000 raise, it’s only a 20% raise. It’s still the same $25,000, it’s not like your employer became cheap in not giving you 50% raises all the time. After you have gotten a few raises, the raises are naturally going to be a lower percentage.

    (I don’t mean to suggest that $25,000 raises are normal, I just wanted to make the math easy.)

I get the idea that the article that the magazine is trying to express. It makes some interesting points elsewhere that may be worth analyzing. However, it got a little dry and it seemed like the numbers were so broad that it was make any useful conclusions.

So, instead, I’ll defer to common sense: Your financial fate is far from sealed by the time you turn 25. In a lot of ways, it might not be formed at all.

Welcome to Jack Johnson Week

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jack-johnson-guitar

This week I’m going to do something a little different. Don’t worry, we’ll still cover personal finance like we always do. I’ll just be covering some broader topics as well.

I’ve been wanting to write about Jack Johnson for some time. I had planned to simply write about his wisdom when it comes to personal finance and one other topic. However, it felt like writing about Michael Jordan and not mentioning basketball.

As this point, some of you may be thinking, “Who the heck is Jack Johnson?” The rest of you are probably thinking, “He’s that singer who sings that song from 2002.” (The song is Flake and the lyrics don’t don’t mention the title.)

I can’t imagine anyone is thinking, “Hey I need to read a week’s worth articles about this guy.”

Trust me, you do.

Why Now is Jack Johnson’s Time

There are two reasons why this is the perfect time for Jack Johnson Week.

  • This past Saturday was Earth Day.

    While Jack Johnson is known for his music, he might be best described as an environmentalist who happens to play guitar. I’ll pay tribute to that tomorrow in a longer post.

    Because saving the environment has oddly recently become a political issue in the United States, I feel it’s a great time to emphasize that we all benefit from things like clean water.

  • I’d like to recognize the amazing things that can some from a single person from an island in the Pacific.

I will be the first to admit that Jack Johnson comes off like a big hippie. What else would you expect from a former professional surfer/singer/acoustic guitarist/environmentalist? I’m sure his style isn’t for everyone, but I can appreciate messeages of sharing love. And as a father of a 3 and 4 year old, the message of sharing toys has been invaluable.

If this kind of stuff isn’t your thing, then I ask that you kindly check back next week.

Plan for Jack Johnson Week

Nothing is set in stone for this week, but here’s what I’m aiming for:

Tuesday: Jack Johnson on the Environment
Wednesday: Jack Johnson on Personal Finance
Thursday: Jack Johnson on Miscellaneous Topics. (This highly likely to change)
Friday: Jack Johnson on Something Different. (This is a bit of a surprise. A surprise that I don’t think even Jack Johnson could expect.)

Where Did the Idea for this Jack Johnson Week Come From?

I should make it clear that this isn’t an advertisement, but because I’m a big fan it may sound like one. He’s how I became a Jack Johnson fan in the first place. After all, five years ago that I was probably like you, a person who didn’t think twice about a one (or two) hit wonder from 15 years ago.

My fandom couldn’t have been more innocent. Our newborn loved this Curious George Opposites book. Back in 2013, I described it as one of the best frugal baby “toys”.

So with a background that our pre-toddler loved Curious George, it made sense to get the Curious George Movie.

That Curious George might be a top ten movie of all-time. It sounds crazy and if it is, then just blame it on me being sleep-deprived, new parent. I have rewatched more than 50 times… and not because the kids like it. (They did for the first 20 times and then they decided their father is crazy.)

Here are my Top 3 reasons why it is so good:

3. Drew Barrymore as a unique cartoon figure – Her character is an extremely intelligent teacher delivering the most insightful line of the movie. Also, from a male perspective, it’s refreshing to see her get a little tongue-tied talking to a man she has a crush on… and her self-effacing reaction for not doing better with the conversation. (Maybe it’s because I have been on the other side of that my whole life.) The illustrators made her physical appearance stand out, but not in an overly ridiculous way like Jessica Rabbit. Finally, Drew Barrymore’s voicing is just perfect for all the above.

2. Will Ferrell as The Man in the Yellow Hat – I am a huge Ferrell fan and I’d say this role might be one of his best. From the DVD extras it appeared he created much of the dialog and jokes… he wasn’t just lending his voice. It takes a special talent to keep a 2-year old and 40-year old entertained.

1. Jack Johnson’s music – Musicals are my wife’s thing, but I feel like the movie was a borderline musical. And why not? Kids love music! Every song does exactly what a good musical should do (IMO) which is “amp up” the emotion of the moment by 10x or 100x. There’s a reason why it was a best-selling soundtrack.

Jack Johnson’s music was so good that it bested a top comedian’s great performance and an iconic cartoon character (especially considering the limited screen time.)

(I’ve probably oversold the movie, but I came in low expectations. I love Office Space and Serenity for the same reasons.)

My wife bought that soundtrack. The last 4 or 5 songs are lullabies which are perfect for young kids (even better in a car!). I’ve been listening to many of his other songs on Amazon Prime via the Amazon Echo. Unfortunately the soundtrack isn’t available on Prime streaming. Fortunately, I’ve learn a lot from the other songs that are available on Amazon Prime.

That brings us full circle on why I’d have a Jack Johnson week.

I can identify with the lyrics and I feel he presents a positive message that we should all embrace.

Dependent Care: 20 Children or a Dog?

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I usually try to write to a more national audience, but today a local news story caught my eye: “Substitute Shortage Leaves Six Classes Uncovered.”

The story explains that there was a flu outbreak and 8-9 substitute teachers were covering classes (aside from the 6 uncovered classes). While that sounds like a one-time thing, finding substitute teachers seems to be a continuing problem according to the town officials.

What really caught my attention is that substitute teachers are paid $70 a day. A quick search tells me that the school day goes from 7:30AM to 2:30PM.

At 7 hours that works out to be $10/hour. The minimum wage in my state (Rhode Island): $9.60/hr.

Let that sink in…

Let’s Look at Dog Sitting

I’ve been writing about my dog sitting gig for a couple of years now. I love dogs to the extent that I believe they are better than people. That’s a topic for another day.

I have to make that clear because I don’t want to diminish the value of dog care.

Some of the competing dog sitters in my area charge $55 a day. That’s for an overnight stay. It’s not worth doing an hourly rate, because dogs don’t need hourly care.

Would you rather have a dog (playing with your dog) in your home for 7 days or spend 5 days teaching 20 children? If money is a motivator, you’ll make more sitting the dog.

Dog sitting isn’t for everyone, but neither is being a substitute teacher. In order to be a substitute teacher it seems you need a Bachelor’s degree and certification (according to the article). Dog sitting doesn’t require either.

As a result of this incident (6 classes going uncovered), the town officials voted to raise the rate for substitutes to $90/day. That seems to be competitive with other surrounding towns. It still doesn’t seem enough, does it?

Milk Money: Get $10 in 20 Seconds

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If you live (or have lived) in the following states, you are likely able to get $10 or $20 in as little as 20 seconds:

Arizona, California, the District of Columbia, Kansas, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, Oregon, South Dakota, Tennessee, Vermont, West Virginia, Wisconsin

There’s a class action lawsuit that potentially gives residents from those states from 2003 until the present between $10 and $20. The residents have to have bought milk or other dairy products mentioned in the lawsuit. That’s a very low bar for most residents.

The website Bought Milk allows you make the claim in around 20 seconds. It is literally entering your first name, last name, email and clicking 3 check boxes.

I don’t want to take any more of your time, but if you think this is some kind of scam here’s more background from the Huffington Post.

Bubbles, Bubbles, Bubbles

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That title isn’t just what my wife sings while at the Bubble Lounge in San Francisco or while in a spa… it’s the topic of today’s article.

Earlier this week, I said I was going to try to be more positive. So before I get into some heavy negative stuff, I feel it’s worth reflecting how awesome life is. It’s not lost on me that I’m part of small percentage of the privileged few in a privileged country. We carry awesome computers with us that have almost any information that people want. We can tell our Amazon Echo to play Jack Johnson and instantly be happy. (Or maybe that’s just me.)

Sometimes I think the negative stuff stands out to me like a sore thumb because of the sharp contrast with all the awesomeness of everything else? What’s that phrase that people use nowadays, “first world problems”? Exactly.

I want everyone to have all the awesomeness and none of the bad stuff. And a lot of that awesomeness comes with money and financial freedom. When I see people or business taking that away from people, it makes me sad… very sad. No one likes a sad, Lazy Man.

Let’s Get to the Bubbles

I’m not really sure if these really meant the definition of “bubbles”, but that’s kind of the road I went down. One might also call it capitalism running amok without regulation… or at least “timely” regulation.

Cable Companies and Bundling

Yesterday, I wrote my experience with Cox cable/Internet pricing. In case you missed it, they seem to automatically assess a $25 fee for a declined credit card. In addition, they require products that some consumers don’t want (me in this case) to get a “bundle deal.” When that expires consumers who fail or forget to complain feel the pain of raised prices. For what it’s worth the FTC does have a page about bundled communication services, but it looks like it really isn’t a priority for them at this time.

I got several comments and not one was in support of Cox or their cable company. Many claimed that because they have a monopoly in their area (like Cox in mine) and lack choice, the pricing just keeps going up and up. I’d say that’s an example of capitalism run amok without regulation. In fact, a few people commenting openly wished regulators would step in.

In the meantime, is it wrong for Cox, or any other cable company, to make as much money as it can? It’s in the business to make money, right? If tactics that some described as “shady” makes them more money that’s just the business doing business stuff, right? I don’t agree with this thinking.

Housing Market in 2008

This is an easy and famous bubble, right? We saw housing prices go up and up. At least part of the reason was because mortgages were easy to get. And as prices of homes got higher, banks created new mortgages to keep putting people in homes. You can reduce the monthly payments on house by making offering a 50-year, interest-only mortgage.

I wonder how many people are still digging out of that mess. The condo I bought in 2005 is worth about $50,000 less than what I paid for it. That’s kind of a big deal, right?

Student Loans

I haven’t followed student loans too closely as I’m passed that age (Thanks for the scholarship, Brandeis!) and my kids are in pre-school. However, it seems to me that colleges have been regularly raising prices (similar to the home market above) and using a similar idea to the new mortgages… people will just get more financial aid.

Medication (such as EpiPens)

I’m sure you haven’t missed the news of late, but prices of medication are drastically shooting up as well. It’s rarely that the products are better or more effective. Instead we find the same kind of passing of the buck as above. In this case, insurances cover some of the cost, so the medications may not seem as expensive, but the result has been raising insurance premiums.

Multilevel Marketing Scams

I’ve covered these extensively in the past. This isn’t exactly like the above products, because you can simply choose not to buy the products, and it doesn’t hurt that like not having a home, education, internet, or medication. Instead, companies found a way to sell hundreds of thousands (maybe millions) of consumers things like $45/bottle juice or $70/bottle salt water make outlandish health claims by its salesforce and bundling the purchase with a “business opportunity” in selling products via an artificially closed market.

What Can We Do?

In all these cases, I’m not exactly sure what we can do. Congress and the FTC are looking into one or more of these areas, but it seems like all they do is talk. I don’t see any meaningful action.

In the meantime, it seems we are left to fend for ourselves as best we can. We try to stay healthy to avoid rising medical costs. We say “no” to $45/juice and MonaVie goes out of business. We decide to look into ways that we can eliminate our cable package. We look schools that present better “value” rather than the very best education.

It’s not ideal, but it’s your money and in the end, you are the only one who can protect it.