Lazy Man and Money

When 92% Isn’t Enough

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Every few days, I get a test back from my kids’ school. Either I’m really spoiled or the tests are too easy. It may be a combination of both. They do well at school, so they probably get 96% on average. I figure that because they are in the first and second grade the school is building confidence in them.

Over the long term, they won’t always get A’s. They probably won’t even get A minuses. Competition gets greater and the pressure to be the best all the time is probably not the healthiest lifestyle.

I’ve found in most cases in life, 92% is great. Of course, there are a few exceptions – I expect more out of pilots and surgeons.

Last week, something happened that made me wonder if 92% isn’t good enough.

The 92% Wealthiest People

Our net worth is probably somewhere between the top 90% and top 95% in the United States for our age. Every now and again, I find a tool online and it fits somewhere in that range. For lack of a better figure, let’s call it in the 92% range.

In many ways, I feel that being in the 92 percentile makes it difficult to relate to some of the challenges of my younger readers. We’re on different parts of our money journeys and the changing world makes today’s challenges different than the ones I had. We had the benefit of having invested early and a long, long bull market. We also are high income – my wife much more than me as I focus more on kids and household stuff.

In any case, being in the top 92 percentile of net worth is a good place to be in. We don’t have many day-to-day money troubles. At the same time, we do have a small-ish house (by today’s standards), a mortgage, and I drive a 2012 Subaru Forester. I don’t have a pair of jeans that isn’t ripped. To outsiders, we probably look like “The Millionaire Next Door”, except without the millionaire part.

Our greatest splurge is that our kids go to a very good private school. Even with a generous military discount, it is a lot of money. We love the education that the kids are getting, but the families are extremely wealthy.

Last week, I found out that Millionaires Next Door and the One-Percenters don’t mix well. I’m sure this isn’t surprising, but it also isn’t the kind of thing that most people have the privilege of even thinking about.

My son and I were invited to one of his friends’ birthday parties. It was just a few families and the kids were all from the same school. There’s not a lot of COVID in our area and through one means or another (age, health care worker, connections maybe?) the vaccinated percentage was high.

I Zillowed the house beforehand and saw that it was a 3M mansion. The family was new to the school, escaping COVID of NYC for their summer house where the kids could be in school full-time. Their Maplethorpe-like original art was very much my kind of humor, but not something I’d consider appropriate for kids. The host casually mentioned that it was probably worth more than the house… and I’m not sure that’s a stretch. (People can pay a lot of money for art.

They had complaints about their refrigerator, but I couldn’t get past that it was bigger than my closet. It was a historic house and parts of it always seemed to need fixing… at crazy prices to keep up with the neighborhood code. Our house, at a fraction of the cost, is cheaper to maintain – a great feature of being constructed around 1990. Our yard is just as big or bigger, but the location is a little farther from the center of town.

(Funny side story about the fridge, my son got thirsty so he went to the kitchen sink and poured himself some water. When he saw another kid get water from the refrigerator door, it completely blew his mind. I know the feature isn’t limited to the one-percenters, but our fridge was brand new when we bought the house, and it didn’t have the feature – my kids had never seen it.)

They were really great people. However, we are just from different worlds. Every so often something came out like, “Johnny doesn’t own a shirt without a collar”, I would blurt out that my kids barely own any shirts WITH a collar. (It’s not true that my kids don’t own shirts with collars, the school has a dress code, but they would never choose to wear them.) My son wore his Minecraft T-shirt on the outside of a Pokemon long-sleeve T-shirt because those were the characters that the birthday boy liked. Like every day, his socks didn’t match. (I dressed up for the occasion in my best Newport pastels with the tiny whale logo, so I at least looked like I fit in.)

I kept trying to find a way to bridge my 92% life experience and their 99% life experience. Our kids seem to be great friends. (It has been hard to tell because COVID has prevented us from meeting all school year.) Maybe we’ll be spending a lot of time together as things start to open up. I just couldn’t find that common ground.

Overall the kids had tremendous fun. Truth be told, I did too. It was much more fun than I expected, but maybe it’s because this was my first socialization in over a year.

When I got home that night, I couldn’t help but think what they thought about us. I wonder if they were thinking that we were great comic relief as such commoners. I know that being in the 92% is enough for us and that’s all that matters. However, it’s strange to live in two different financial worlds and not fit into either.

Just before I drifted off to sleep, I laughed to myself as I imagined the other family writing in their bedside journal. The entry was “When 99% Isn’t Enough.” You see, there are a couple of families in my kids’ class who are semi-famous with (what I would estimate as) 9-figure wealth.

What’s the Difference between a Promotion and a Lottery?

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A few months ago, a friend pointed me to this news story about a Seattle car dealership, Jet Chevrolet, having to pay out money for a promotion it ran. The promotion was that if the Seattle Seahawks shut out the NY Giants, they’d give away $420,000 to 12 people ($35,000 each). I’m not sure where they came up with the $35,000 number, but I’m guessing the picked the 12 for Seattle’s famous 12th man, another term for the fans.

Life does crazy things sometimes. This time, it caused havoc for the car dealership as the Seahawks actually did shut out the Giants. One of the owners said, “This is crazy. We never expected that we’d actually be giving away the money.” My response would be, then don’t offer it and advertise it everywhere.

Fortunately for the dealership, they bought insurance for $7,000. They were paying $7,000 anyway, so this is almost a best case scenario since it got them so much extra publicity. Sure that insurance company is going to raise the insurance premiums on the car dealership, but I hope they’ll never run a promotion like this again they ran it again with increased premiums, but didn’t have to pay up again.

Before I get to the main point of the article, I’ll share one other oddity that my friend, Kosmo, spotted:

Reached Sunday night, Johnson said he still doesn’t know how the dealership will actually work the drawing and was waiting on guidance from the insurance company.

“We’re a car dealership, we’re not used to doing something like this,” Johnson said.

His email to me nailed exactly what I was thinking:

Uh, what? You paid the insurance company $7000 to insure against a shutout. Once they give you a check for $420K, their job is done. If they are smart, they don’t touch the drawing with a ten foot pole – that’s just begging for a lawsuit.

Ahhh the drawing. Let me tell you about those details. The company worked with their legal department (kudos to them) and realized that they had to make the opportunity available to everyone. It’s for the same reason you always hear the “no purchase necessary.” If you charge people money for a chance to win a big jackpot you are essentially running a lottery, which is only legal for the government I guess. Similarly, in many states 50/50 raffles are illegal… and in some they have extensive restrictions.

Jet Chevrolet made the opportunity available to the public. You could enter the drawing without buying a car (I presume by going to the dealership and filling out an entry.) If you bought a car during the promotion, you got 100 entries. It turns out that 12 people filled out a form who didn’t buy cars and 20 people bought cars. Thus there should have been 2012 entries in the “hat” when the 12 names were picked.

There’s some information on the winners here, but I couldn’t tell if they were the ones who bought cars.

Clearly the odds are greatly, greatly (it bears repeating) in favor for those who bought cars, right? Jet Chevrolet made up their own terms for the promotion and they had their legal team involved, so of course everything is on the level, right?

I’m not going to comment on the specific representation of their promotion. They said that they ran it by their lawyers and it was legal. However, I was thinking about extrapolating it as an example for myself. Let’s imagine that I create a one-page ebook with just average content… nothing special about it at all. I sell it for $10 and offer a prize of $100 where people who buy the book get a million entries and other people can enter once for free. While it is technically open to the public, it is essentially a contest where the only reasonable chance to win is to buy my book.

Suddenly it looks a lot like running a lottery, right? Running a lottery is illegal in most states (perhaps all of them).

At what point does running a “promotion” become running a lottery? I don’t have the answer, so I’ll just end with that question.

Forget Money…

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It seems like everyday I come to this space to write something related to money (which should surprise you due to the blog name). Today, I’d like to tell you to forget about money. We’ll have a lot of other days to deal with money. Plus if you are reading this, you are likely pretty responsible with your money anyway.

It’s okay to be irresponsible sometimes. One of the best times to be irresponsible is Valentine’s Day. So while I may write about dozens of ways to save money on Valentine’s Day, I must admit that today can be like one of those cheat days on your diet.

Consider this to be a reminder that money is (typically) most valuable when it is spent. (Having it also valuable from a piece of mind perspective.)

Take the day to tell someone you love them. Hey if Bill Belichick is going to say he loves you, it should be easy, right?

I’ve already spent too many words on money for this article about not about money. With that in mind, I’m quit while I’m behind.

What Fantasy Football and Personal Finance have in Common

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This year I finally gave in to the pressure and decided to play fantasy football. In the past, I’ve skipped it because I never wanted to get in a situation where I’d have to choose between rooting for my favorite team and rooting for my fantasy team. I would like to say something magical resolved the issue. I wanted to find out what all the hubub was about and the pressure finally got to me. In hindsight, it was a great learning experience… and I’m not talking about learning about football X’s and O’s. In the end, I learned a bunch of lessons that can be applied to personal finance:

  • I was unjustly over-confident – Another reason why I wanted to play is that I thought I could win… easily. My co-workers never seemed to talk about football. I knew this stuff. Sometimes I think I know a player, team, stock or industry, but it turns out that…
  • …I didn’t account for uncertainty – Picking football players is a lot like picking individual stocks. Sometimes there are winners who don’t seem to perform as you’d expect (Tom Brady’s fantasy football numbers until Sunday Night’s game) and sometimes you things play out just like you thought (Aaron Hernandez’ rise from obscurity to being a great value at tight end). Even if you feel you have a great team, a number of unexpected factors can sideswipe you.
  • I wasn’t diversified – You may have noticed from the previous point that I mentioned two Patriots players. To avoid having to root against my favorite, I drafted nearly an entire team of Patriots players. I have QB Tom Brady, WR Wes Welker, TE Aaron Hernandez, TE Rob Gronkowski, and K Stephen Gostkowski. If the Patriots don’t have a good day, I’m practically sunk that week. Plus with the Patriots, you never know who is going the target that week. Hernandez has lead the team in receptions and only 10% of the leagues in CBS Sports had him drafted. Randy Moss and Wes Welker were drafted at the top. This past week Gronkowski got all the playing time as Hernandez sat. Gostkowski got injured for the season, so I had to pick up another kicker.

      • While I can’t related it to personal finance, I’ve learned that football isn’t at all like fantasy football. In the world of fantasy football, my backup Kyle Orton is better than Tom Brady because he can pick up a bunch of garbage time statistics. Maurice Jones-Drew, one of the top picks, almost had to bench himself in his fantasy league because he got off to a slow start. Brandon Marshall, one of the most talented players in the game, has been a bust as he gets all the attention from opposing defenses. Stephen Jackson, one of the best runners in the game, has been pretty good, but not his usual self.

      What is the result of my “superior team”? I have a 2-8 record. In fantasy football you control how many points you score, not how much your opponent scores. In a 12 team league I have scored more points than 6 teams, yet I have the worst record. The team with the 3rd best record has scored fewer points than me.

      I think my fantasy football experiment is going to be a one-time only thing.

When you Sue a School, Does Anyone Win?

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If you’ve been following the news lately, you may have come across a story where a Pennsylvania school system has been allegedly spying on their students. The Rosemont’s Harriton High School’s computers included software that would allow them to turn on the webcam whenever they wanted. This would effectively allow them to spy on students in the privacy of their own home. This came to light when the school allegedly informed student Blake Robbins’ parents that he had been selling drugs and even showed a still photograph as evidence. The Robbins’ family claims these accusations are false. You can read more details here or watch this video:


CNET noted that the school system could be sued for violating a number of laws/regulations such as, “the Fourth Amendment, the Electronic Communication Privacy Act, the Computer Fraud Abuse Act, the Stored Communications Act, Section 1983 of the Civil Rights Act, the Pennsylvania Wiretapping and Electronic Surveillance Act, and Pennsylvania common law.” They didn’t even get into the potential child pornography charges that could potentially come from the girl who said that she shower with her laptop open to listen to music (if they are shown to have violated that).

I find the story interesting on many levels. Having a Computer Science degree and working in the technology industry for the past decade, I usually stay on top of technology happenings. It never occurred to me that a web cam could be used in a nefarious way like this. Take it a step further and imagine a virus that does the same thing. Yikes!

The biggest question for me from a financial perspective is, “What if the school is found guilty of all these violations?” The damages could be millions and spread across numerous families. On the outset it would seem that justice would be served and everyone could just move on. However, the community would be left with a bankrupt school system. That typically means raised taxes. So others in the town would have to pick up the pieces. This leads me to think, the ones who “win” could be the lawyers. It might even be in the community’s best interest to root for the school as outlandish as it sounds.