Oh joy, people talking about my clients ...
Oh joy ... people are talking about the companies I work at.
Just had dinner with my closest colleague from Merrill tonight.
Also there were our colleagues at Goldman and Lehman too.
I delight in what people think, and even more in what they do not know.
When people talk about the "credit crunch," they don't realize what they are talking about.
Money isn't fixed, it's about how much people trust others to lend it.
The more they don't, the more they require you to keep liquid, the less that is lent.
And that means less money to go around, as the money multiplier is drastically reduced.
I.e., less money exists.
It's not about the rich or poor.
It's not about the penniless or grossly wealthy.
It's about the amount of money that goes around and funds everything.
People make it about right and wrong, and that's nothing of the sort.
It really started with the realtors and apraisers who didn't live up to their required, professional ethics.
And it kinda rolled out into greed at all levels -- from the smallest buyer to the biggest investment bank.
And now no matter what the Fed does, those with money actually have less of it, and those who have little money have less as well.
Everyone has less, as a result of people not trusting one another.
Heck, even Frontier Airlines filed Chapter 11 not because they are going Bankrupt, but because a bank changed its terms and started holding more of their money on them.
They filed Chapter 11 to stop that, which it does, and not because they are in danger of going out of business.
Everyone is running to bankruptcy to stop others from taking more of their money, of which there is far, far less.
We are all losing in this, as less money exists, as the money multiplier is reduced, as more liquidity is expected.
It's not going to end pretty for most people.
All I can say is that I drive the cheapest, oldest 4 cylinder car on my street ($10,000, and that was 12 years ago
).
I have the smallest house of anyone on my street (1,200 sq. feet), and it was falling apart when I bought it (sunk $30,000 into it over 10 years).
I spend no money, I live on nothing, I've learned to do that between the good times and the bad.
And I travel every week, and work on Wall Street.
People think I'm rich by what I make, but that's not always what I made (1/3-1/4th when I worked for NASA, let alone some more recent years, being self-employed, it was bad).
No, I'm rich because I have 0 debt (even though my wife and I put ourselves through college, her especially so coming from a poor family), and that's how I've always tried to be.
My neighbors have 2x the house, 3x the car (or cars), and don't even make 1/3rd of what I do now (although there were years where I didn't work a lot and made only 1/5th of what I do now, and that goes with being self-employed sometimes).
Everyone believes others will help them, or the government.
I've always known that whether I make less $20,000 or over $200,000/year, I had better live on only $20,000-30,000/year max.
I save the rest -- saving more than I live on per year on good years.
Why?
Because what takes me to live on $20,000-30,000/year now, is what will be the equivalent to $100,000/year in 30+ years when I retire.
And to live off of $100,000/year in 30+ years, that means I need to have $2.5M in investments that average a 4% return to yield $100,000/year to live on in retirement.
So that means saving $40,000/year for 30 years, which only gets me half, and I have to hope growth and income will double it to the $2.5M I need.
That's my life. That's reality. I'm not rich. I'm just trying not to be a burden on society. I certainly don't live rich at all.
Heck,
most of my neighbors think I'm poor!
And I live in a lower middle class suburb in Florida, and I'm "poor" in their eyes.
I honestly stopped carrying about what people think, what they actually do with their lives is what really matters.
Especially the burden they are, or are not, on the public and society.
I have a colleague who has only made $25-35,000/year his entire life.
He lives far more tightly than I, with a wife and two kids no less, and does alright.
He doesn't live beyond his means, and he's one of those people that have the right to cut no one any slack, even more than I.
Same deal with my wife, she had 0 breaks, but people hate her for working full-time while going to college full-time, and nearly having a PhD.
Same deal with myself, my reputation in my industry is something I did not have handed to me, but I earned, and my integrity is beyond question.
No one has the right to judge me, as I do not judge others.
But I'm not blaming anyone for this except the people who got themselves into it, and I was not one of them.
But it is my tax burden, grossly more than most others, that will be bailing them out -- along with everyone else who saved money and didn't spend.
Everyone who were not responsible for this will be the responsible folk who will pay and bail out those who were irresponsible and caused this.
From the biggest investment banks down to people who spent beyond their means, and assumed their employers or the government would take care of them.
I learned that long ago to not even be remotely true, even when I got screwed over and lost $30,000 at one client myself.
I had nothing handed to me.
But I am damn self-sufficient, because I've had to be.
My wife even more so.
And I don't know anyone who had a childhood as rough as her.
