Allergic to Retail

I hate the mall.

I have plenty of allergies. Dust, pollen, peanuts…and you know those people who claim they are “addicted to retail”? I am their opposite.

Flat out hate. Literally it puts me in a bad mood whenever I come close to it; know I’m going there, or worse have to sit around while someone is shopping.

And it’s not that I really hate shopping that much. It’s just that I hate the malls around here. They lack imagination. They lack originality. And the people are just disgusting.

I just love to look around when I’m there (which thankfully is on average less than once a month) and imagine all the financial standings of everyone around me. I like to think that at least 30% of the people I’m looking at are shopping with money that isn’t close to being theirs. The type that can only afford the minimum interest payment on their 24% APR Nordstrom’s/GAP/Banana Republic/etc. visas. Or less! And they think they’re getting somewhere.

These people talk as if they will die if they don’t get a certain style of jeans. Or the newest fall line, or this year’s hottest accessories. I have to admit - at the least they are keeping this capitalistic economy afloat. All the billions of dollars companies are spending on marketing to them is obviously working.

While living in Fremont before taking the bus downtown, I’d always look at this graffiti that has stuck with me for years. It read, “Consume less, live more”. And I’ve honestly tried to do that. And I hope that there are a lot of people out there who try to live by that same statement. If I purchase something it’s typically for utility. And I agonize over every discretionary purchase. Recently it took me almost a month to purchase my laptop because it took me that long to admit to myself that I needed it enough.

I still wear clothes from 6^th grade. Back then, all the rage (at least from what I saw/what I wore) was to get things oversized. Guess what? All that buying of extra large clothing fits me now. And I’ll be the first to admit - I have more clothes than I need. But the only clothes I do buy? Shoes. When the soles wear down, or there is a hole in the shoe, it’s time for me to get new shoes. When was the last time I made some major purchases of clothing? April of 2005. More than 2 years ago. And what was I buying? Business casual for work. I didn’t have any. And my job required me to wear it. And more than half of my stuff that I have that is considered business casual is hand-me-downs from my dad. The other half? Christmas and past birthday presents. My parents are very good about buying me the necessities – underwear and socks. Since I’ve got what I need as far as clothing is concerned, I never feel the need to keep up with “style”.

This is all based on the fact that I’ve always thought that if someone is going to like me for my material possessions, then that’s probably not a relationship that will be lasting very long. However, I will admit that at times I do feel a bit “out of style”. But as soon as I see those price tags in the stores I’m reminded why I’m so cheap, and why I refuse to buy anything without analyzing the cost/benefit of the product. And most of the time, there is no benefit. I’m not trying to impress anyone right now, and really I shouldn’t have to (nor will I).

While waiting on a mall bench the last time I was there (and I suppose the main reason for this post) I heard a group of teenagers talking together as they were walking. They looked about 13 or 14, and the subject was cars.

One of them said, “Well, I want a BMW.”

“You can’t have a BMW – I wanted a BMW!” the other friend responded.

“Ok, well fine I guess I’ll just go for the Mercedes then”.

Seriously? I couldn’t believe it. I honestly think that there are just so many people out there like this. Maybe it’s just the kids? Naw, I think there’s more people out there like that. Anything to own the car of their dreams. Living with mom and dad at 27 and 3 maxed out credit cards in order to lease the latest 5 series. But they’re happy right? For their sake, I really hope so. I just wanted to stop every single one of them and ask them about their goals/plans for life. Ask them how they were doing in school (if they even cared about school) if they had a plan for higher education, and what they were going to do once they got out. How in the world they were going to make all this money so that they could afford those cars. Sure, they were probably just dreaming aloud, but since there was no laughter within the conversation I only have to assume that these kids really thought they would own these cars soon. For their sake, I am hoping that mommy and daddy won’t be so kind. In my opinion giving children everything they want sets them up for failure later. They’ll expect to just get things without actually working for them…

Maybe I’ve just learned to think a lot differently regarding material wealth than others out there. Or maybe I’m an early adopter to semi-minimalist ideals. There’s a certain point at which I look at people and realize that maybe they’ve got some major money backing them up. When I see exotic cars, classic cars, or just anything top of the line luxurious – I have to draw the line at that point. At some point a person doesn’t front about how much money they have or how much they make. But for every person like that, in my opinion there are 7 or 8 people doing the exact opposite. Putting on a complete front. Sucking up every last dime to hopefully fill some sort of void.

And to those of you who are doing that, the mountain of debt you’re building has a peak. Good luck to all of us over the next few years as this credit crunch might really hit us hard. One of these days, those 0% APR for 12 months, $0 transfer fee cards is going to run out. And when it does there’s going to be plenty of people scrambling to get rid of things they thought they needed. I hope you’re all able to either return the stuff you’ve purchased or pawn them off on Ebay. So that the next time it seems like there’s free money to go around you’ll have learned from this time around and use more discretion in the future.

Consume less, live more.

I’m trying.

Happy Anniversary

In less than a week it’ll be one year that I’ve been married.

Wow.

Now I know how our parents, and their parents made it 40, 50 or even more years as married couples.

Because it flies. And yes, at times it crawls. But on nights like these, you tend to wonder what happened to a year.

I was looking back over my blog for what I wrote in September…nothing. Well done myself.

It’s ok – I’ve got enough pictures from that month and the wedding to fill up volumes (and they do).

I don’t claim to know much about how a successful marriage should be, or should work, but I think I’m trying to teach myself a few things, or maybe learn things from myself from writing them out here. I don’t really have any other way to lay them out properly…eh…anyway.

Advice, Comments, General Sharing of Self Experience and/or Knowledge:

When people ask me how married life is, it’s really no different. Especially if you were living together before you were married. And honestly, I wonder what couple doesn’t live together before they get married. I would actually find that kind of weird…I mean, I would want to know how my future spouse lived in close quarters with me before I could decide whether or not I could spend the rest of my life with her. Wouldn’t you?

I honestly don’t understand the guys who are single in to their mid to late 30s. What is wrong with you guys? I worry about the guys who are in their mid to late 20s and in no hurry at all. I worry they’ll become those mid to late 30s guys. Guys, marriage is not the prison you make it up to be. Unless you marry the warden or prison guard. So choose wisely. Or maybe it’s because nobody wants to marry you? I suppose that could be a possibility too. I’m not going to solve that problem…

Michelle is my 2^nd mom. Thank God. Sometimes I can feel kind of useless because I used to do everything myself when I lived out in Seattle on my own, but her cooking is better than my micro waving so I do my best to be gracious.

Marriage takes a lot of work on both sides. Sure, I wrote it. Do I follow it enough? No. I’m working on it. It’s going to take time. Luckily I’ve got a lot of it ahead of me.

Do I get scared sometimes that this is forever? Absolutely! Do I give shit to other guys about to get married? Definitely! Would I be worse off still living with a roommate or my parents? Exactly. Having someone there…(by law – heh) is always great. Which brings me to my next point…

It’s not going to be puppy love, hot and steamy, I’m going to die without you need you here with me now - all the time. It’s just not realistic. Especially in a household with two working parties and schedules. To try and keep it fresh all the time is just trying too hard in my opinion. Can it get boring and routine sometimes? Yes. But (being the pessimist that I am) think of all the bad things that could go wrong. I could be struck down with lung cancer after only smoking one cigarette in my lifetime. Then what? Then I’d be wishing I was more grateful for those days that we just went to work, then came home and sat around – and were healthy. It’s all about perspective. Something I’ve got to remind myself of sometimes. And being out and adventurous and on the road gets tiring. Sure, a few weeks away from home a couple times a year? Great…wait…does that mean I’m really converting to home body status? Uh oh…

One of the best things about marriage is that you can set goals for the both of you. You can work together to achieve things, and the synergy (woot! Go vocab) that’s created between your partnership does so much more than if you had been working separately (even on the same thing! Confusing…). Having someone there to support your endeavors and dreams however far fetched they may be is one of best things about having a partner “in crime”.

And on that note, Michelle and I are building an amazing base. We’re accomplishing things I wouldn’t have thought would be possible until we were more financially secure. Sometimes I look at us and am blown away by how well we are actually doing. I honestly can’t think of one couple who is doing better (even adjusted for inflation for older couples :p), although I know of one who is close. And of course I’m tooting my own horn (or ours) but I’m just excited about the launch pad that we’re building ourselves…to of course rocket us in to the future. (cheesy) We’re young enough to really shape the direction of our lives and take risks where if we had had kids already or were in more demanding jobs we couldn’t have done these things. It really makes me proud that we are learning together and bettering ourselves. I can’t ask for much more right now.

I started to write advice for other married couples or soon-to-be married couples but then realized I completely flipped from talking about me/us to getting up on the soap box. I don’t feel like preaching that much.

It’s getting pretty late, and I know my posts have been short…but I literally feel like I am so inundated with things right now that I don’t have a clear enough head to write. I’ll try my best to keep pounding these out though…if only for my own sake of reading these later on.

Here’s to one year. We made it. And I guarantee a lot more where this one came from.

Love you darling.

Balance

One of the key ingredients to a healthy life I’ve decided.

Too much of a good thing (or a bad thing) can really ruin you. Make you lose your sense of reality.

Without pain, there is no joy.

A few years ago, sitting in my philosophy class (which was a huge waste of time) we were discussing this machine that would give you any experience you wanted. Any experience ever felt by the human brain.

You can read more about it here (it’s the first google link I found):

http://www.bu.edu/wcp/Papers/Valu/ValuRive.htm

In the class, I was one to argue for plugging in. To give myself the ability to experience things I’d probably never experience in this lifetime. That alone was worth the ability to plug in.

But just recently, my view point on being for plugging in changed. Of course there were the kids in the class who felt they should live their own lives, and they’d prefer their own lives over plugging in. However, from what I recall of the class part of their reasoning was that they would know it wasn’t real life; it was just your brain fooling you in to these experiences.

I had a good enough imagination, so I didn’t go along with what they were saying. If you were stuck in a machine and didn’t know any better – how could you have known any better? You wouldn’t know what real life was like because you had been attached to the machine. Our example was based off of being attached to the machine since birth – not given the opportunity to get plugged in after living in the real world for some time.

But now I’ve realized that I would miss out on all the pain. All the bad things in my life that affected me – changed the person I am – if I had plugged in. Why would anyone in their right mind, hooked up to the experience machine choose a bad experience? One that caused them physical or mental pain?

Over the past few weeks, I’ve felt minor physical pains. I know this is silly, but whatever. About 3 weeks ago, I got this huge cold sore on my bottom lip. Thinking back, I don’t think I’ve ever had a larger cold sore. And it was painful. And annoying. I am a lover of citrus and salt unfortunately, and every time I’d eat something of that nature I was cringing. After using some hydrogen peroxide over the past week it’s finally subsided and I can eat normally again. I was chewing on my right side only for some time – or avoiding foods that I normally love because of this stupid cold sore.

This past Thursday I slid into 3^rd base abnormally during our softball game and received the biggest raspberry on my hip that I’ve had since either 3^rd or 4^th grade. I’ve been hobbling around since then and every few minutes I’ve got to pull my boxers off of the wound because they start to stick together. And every time I do it’s about half as bad as pulling a band aid off. It’s hard to sit, I’ve had to lay only on my right side while I sleep, and getting in and out of cars is the worst.

And because of these two things, I’ve realized how grateful I am to be in such a good condition (only compared to myself in minor pain). My mouth is almost fully healed now. Tomorrow I’ll be able to drink orange juice and brush my teeth without cringing. I’ll be able to eat foods with barbeque sauce on them, or even French fries with salt without it killing my mouth. So I learn to appreciate – and be grateful for the state I’m in because of that pain.

I’m sure by next week my hip will be healing nicely, and I’ll be back outside and running again with full motion of my leg. There won’t be pain when sitting down, or while I’m riding in the car around corners. I won’t have to pull my boxers off of my oozing wound and will be able to toss and turn in my sleep normally.

And that is exactly what I am getting at. In the machine I would never choose pain for myself. But in the machine how can I really understand joy and pleasure when I would never choose pain and sorrow? The steak would not taste as good, the emotions I felt would not be as strong, and I would never feel as grateful as I do for the things I have – or how I am after what my real life has put me through.

So I’ve changed my answer now. The machine sounded good in theory and still to this day I’m a bit of a hedonist, but I’m beginning to realize now in life that both sides of the coin are needed to have a fair toss.

Reap What You Sow

Warning: I am only writing this for my own memory’s sake. I wanted to include this in my blog so I can remember it. And it’s about the financial world for anyone reading. So if you want to stop here, great. I can’t guarantee there will be any interesting or new information as I’m sure everything I’ve read recently I’ve ripped off a little bit from multiple sources. I am only including it so that when I read through this again, years down the road I can remember what I was thinking at the time. Just like how my dad always says to me about how those “rotisserie chickens at the grocery store used to be a dime”.

Just like that.

Sub prime. AKA, Sub slime. AKA housing bubble. AKA this post. Reap what you sow.

Thinking back over the past 12 years, it’s been kind of creepy. We’ve been building ourselves up - our economy on very little. In 1995 it was tech. Everything was tech. Sure, some value was added, but the stock market went shooting up like a sky rocket in dot coms that were worth nothing with ridiculous valuations in to the thousands. And people who were smart enough got out before it all when to shit. Others that didn’t got hurt. Bad.

And by the end of 2001 and in to 2002, things were looking terrible. Which is when the Fed decided to cut rates to “their lowest point in SO many years”. What did a lower rate mean? It meant borrowing cash became cheap. Suddenly those that couldn’t afford a 30 year fixed at 8.5% were magically able to afford it at 5.5%. Look at all the interest they were saving!

So all that money that wasn’t being made in the market had to move somewhere. How dare we expect people to earn less than 10% a year on their money. Is part of your American dream being wealthy beyond your wildest dreams? Mine’s about halfway there.

So people borrowed. And borrowed. And borrowed until they were so heavily leveraged that paying principal became a thing of the past. Because now everyone could afford a home. In fact, the housing market got so hot that new products were popping up everywhere. Balloon mortgages, 1 month ARMs and negative amortization loans. All for $0 down! Can you imagine that? Oh, and what’s that? You and your wife don’t have a job either? Well, we’ll put you on a stated loan that says that you’re a doctor and she’s a lawyer and together you make upwards of two hundred and fifty thousand dollars a year.

Sure, I got caught up in it. And I still am. My wife got in to a condo at the right time, in 2004 just as the housing market was peaking. I threatened leaving her because Issaquah was “too far” for me. Little did I know I’d love it out there, and it’d be one of the best investments of our entire lives thus far. But she put a little amount down, on a stated loan and paid PMI on a 80/20 split loan. Luckily we were able to get out of there while things were still hot.

Because builders saw it. They saw the wild buying. People outbidding the asking price just to get in to a property as soon as possible. Because a 20% return on even a $300K property is a lot of money in a year.

So they built more. And more. And buyers kept scooping them up. Because “property isn’t as risky as the stock market – you actually own something FEASIBLE – that you can touch – when you own property”. It’s amazing how hearing this now, 3 years later makes me cringe after it was pounded in to my head so much…

But now, there’s more homes than there are buyers. Back in 2002 was when that first 5/1 ARM at 5% or whatever ridiculous rate was out. And everybody saving hundreds of dollars a month by just paying their interest every month is having a hard time either refinancing in to another loan – because they’re not going to give you “interesting financing” on your property now. No. Too many people out there over the past few years have screwed the lenders over and vice versa.

5 years ago you moved in to a property you had no right affording. Expecting that your home value would appreciate enough that you’d have a good return on investment as soon as your ARM/balloon/negative amortization loan was up. And you were broke the entire time, but it was OK, because as soon as you sold the house, you’d make back everything you put in. Right?

Well, little did you know that the builders kept building. And as soon as inventory started piling up, suddenly 5 blocks down the street they were selling a brand new house that was bigger and had more upgrades than yours and they were selling for the same price. Who was going to buy your house?

So you had to reduce your price. And reduce it further. And maybe you were going to rent it out…but it was crunch time and the lender was breathing down your back. Maybe putting nothing down and not getting a fixed rate wasn’t the best idea in the first place. It seemed like a good idea at the time…such a small monthly payment…

But at the same time there were those out there (just like me in the past month) who realized that the market has been on a tear since 2005. It seems like at that same moment in 2002 someone realized that they could take a second mortgage out on their home, or leverage something they had to invest it in the stock market. In another property. In something. Wouldn’t that make sense? If you were paying 6% on your 2^nd mortgage and you were earning an average of 12% on your S&P 500 fund, why in the heck wouldn’t you bet the house to earn a little extra cash? If another property was going to earn you a 20% return on your money, why wouldn’t you do it?

So I made it a little bit late to the party. So what. I’m still going to fight and struggle and do my best to succeed.

But for the rest of the people out there in a lot shakier positions, I’m sure there is guy X out there who just did the same thing as me. Except they pulled out more. And over this little stock market correction we’re experiencing over the past 2 weeks they’ve lost everything they’ve made. Or there are the people that bought 3 more properties. And suddenly that value in those homes they were holding onto has just dropped out of the bottom. The sure thing didn’t seem like it anymore…

And now the only out for them is bankruptcy. You couldn’t afford it in 2002, what makes you think you can afford it 5 years later when the rates have gone up and unfortunately wages haven’t really followed.

So here we stand. One of the slowest “shit hitting the fan” sequences I’ve ever seen. I saw my first sub prime lender go bankrupt in February of this year. And that was the red flag for me. Debt was cheap, so we threw it around to whomever felt they could handle it. Americans love debt. Unfortunately not all of them have the right mind about them to control it properly. In fact, to the tune of about 7 million home owners.

7 million. Can you imagine that? 7 million families, people, friends, neighbors literally just walking off of their property and claiming bankruptcy because no one will provide them with a loan to which they can afford their property any longer? I can’t. My neighbors actually seemed proud that they put nothing down on their property. Like they were almost getting some sort of deal.

It is the perfect storm at it’s finest. And unfortunately everyone that bit off way too much are going to reap what they sow. And they’ll bring the rest of us with them. I just hope it hurts a lot less than I think it will. I’ll keep my fingers crossed, but it’ll require a lot more than that to fix what’s coming down the pipeline.

The Fed meets tomorrow. I can’t wait to hear what they’re going to say. Either they’ll go along the lines of my blog post. Everyone can just tank because none of you read the fine print or expected less than 28% year over year growth in the value of your properties.

Or, the Fed can bail everyone out by cutting rates and possibly restarting the whole cycle again.

For the short term, I like the idea of a rate cut. Or at least the acknowledgement that something has gone terribly wrong when a person making $28K a year can suddenly afford a $300K house with nothing down.

For the long term though, I’d love to see us suck it up. Just like the ridiculous valuations in 2000 of high flying stocks with worthless underlying companies, we’ve got people who gambled with the worst possession they could…their own homes.

At the least, it’ll be interesting to see what happens between now and 2009. That’s when the big lenders say most of the “interesting loans” will either be refinanced or defaulted by.

One of the best rules I’ve continued to follow is, “If it sounds too good to be true, it probably is”. Unfortunately so many people are going to get burned by not remembering this rule. We’re on shaky ground right now, and end of this seems so far away…

Until this whole mess is over, I’m praying that the bad apples don’t spoil it for the rest of us.