After watching Friday's Oprah episode (America's Debt Diet), and reading the front page of Seattle Times' Sunday paper (Nabbing the King of Con), I can't help but feel pity for all these people who make a good living but only have $250 left in their bank accounts (and have probably destroyed their credit scores in the process). Both stories have opened my eyes and made me rethink my desire for a full-size pickup truck and other toys.
I also feel a lot of pride for my friends and family who have been able to achieve financial stability and live within their means. My friends seem to appreciate the little things, like homemade meals, shelter and transportation, even though most of them make well over $100K a year. I wouldn't call any of them cheap... they just don't care about driving the newest car, buying the biggest house, or trying out the newest trends. But they're always willing to go grab a beer or some sushi to celebrate good news.
Oprah's episode talked about America's obsession with status, tangible goods, and spending money. They showed 3 families who are all in huge amount of debt (I believe one family had $170K in debt) and who live lifestyles that are too focused on nice homes, cars, and eating out at restaurants.
The King of Con article is about a 26-year old guy from Seattle who posed as a Microsoft millionaire to gain approximately $4.5 million in loans from local area banks! (He did this by lying, forging documents, and lying some more). But instead of creating a legitimate business or doing something productive with that money, he bought 2 planes, at least 4 cars over $100K (multiple Porsches, multiple Ferraris, a BMW M5, and a Lotus Elise), boats, motorcycles, a segway and traveled the world, all while blowing the bank's money.
When I was 21, I started my own company and learned how to manage and save money. I felt like I took full advantage of my opportunity, both professionally and financially, and am grateful for the experience I had. I saved up enough money to buy my first condo (which turned out to be the best investment I have made so far, appreciating $80K when I sold it after 3 years).
What's interesting to me, is that back when I was running Reaction Snowboards, I thought that $500 for an ad in the paper, and $500 for a camera were way too much money to spend. These days, I'll spend twice that, just because performance is a little more important, but mainly because I've become jaded. I used to think $50 was too much to spend on a pair of jeans, but now I have multiple pairs that cost more than that. I hate it.
I wish I could revert to the middle school days when I would save lunch money for weeks just so I could have enough money to buy a cool sweatshirt (I was really into the Huskies back then) and then realize that a college sweatshirt wasn't worth weeks of saving. So instead, I would keep the money in a shoebox. I remember how proud I was to have saved $5K during one summer, just by working 2 jobs. I wasn't going to let that money go easily.
Sadly, those days are over. I have sold Reaction Snowboards, and am now in real estate. In snowboarding, you work with a lot of people who have the same passion as you, just being on a snow covered mountain. Nothing else mattered. I didn't need fancy gear, clothing, and gadgets. It was me and the mountain, all anyone cared about was how well they performed. I had a little extra weight on my shoulders, because people always expected me to ride a little better (and still do), and I also wanted to be the face of the company. Truth be told, I wasn't too worried about being the best rider, I was happy to take that weight just to let some of the other younger riders do their thing with less pressure. That was fun.
In real estate, you work with a lot of agents who want to "look" like they're successful (big SUVs, fancy clothing), but you know that most are really only making $20K a year. What's disappointing to me is that too many agents aren't worried about performance / customer service first. They're worried about commission first. I couldn't believe one conversation I had with another agent. A client asked me to list a piece of property. The client also asked me to list the selling agent commission as 2.5% (most homes offer 3.0%, but there are plenty listed between 2.0% and 2.5% these days). I got a call from an agent who said he was interested in showing the place, but then asked, "What's up with the 2 and a half percent?"
"Sorry, that's what my client asked me to do. But there are others in the area listed at 2.5% as well."
We ended our conversation soon after, and he ended up never showing the property. Who knows, it might have been the right place for his client, but his client will never know. People like that make me sick. No wonder so many forums exist on the internet that discuss one scumbag agent after another.
My cousin was in town last week. And as wealthy as his family is in Korea (at least I think they're wealthy), he was amazed at how American's live. He doesn't have a DVD player, nor his own car. Yet, it seems like everyone here has several of both.
I would strongly suggest that anyone who reads this blog entry check out Oprah's Debt Diet at www.oprah.com. I'm happy to say that the only ding to my debt is the student loan I'm currently paying off.
Hallelujah.
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