Blog

Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large.

With what money?

I go the mall sometimes during the weekday lunch hours, and I would see the local high school kids buying lunch at the food court. How on earth do they have the money for it? The allowances they get from parents must be hefty. I make above the American median household income, and I only feel comfortable enough to get Chipotle once in a while. Kids, with no income - how are they doing it?

Especially these days when $10 can’t even buy you a meal at McDonalds. At least back when I was in high school, there was the dollar menu. That’s a lot of McChicken for the $20 my father would give me once in a while. A dollar now can literally buy nothing at the Golden Arches. I understand inflation, but people aren’t making that much more money? A suitable food allowance for a higher schooler of today must be in the hundreds per month.

I guess there’s a lot of rich parents out there in San Francisco.

No wonder it’s said that child rearing is so expensive. With the recent inflation it’s got to be more than the quarter million to raise a child from baby to 18 years of age.

My parents most certainly did not spend a quarter million dollars to raise me. They didn’t have to money to. Not even close. I think it’s people’s expectations of what entails child-rearing that drives up the costs. Childcare, birthday parties, toys, trips to Disneyland (allowance when they reach teenage years); a lot of it is more wants than needs.

I read an article about parents getting into debt to bring their kids to Disneyland. News flash: if you cannot cash flow a Disneyland trip, you cannot afford it. There’s no rule that a child must experience Disneyland. For sure they will be sad when they hear from their school friends who went, but I didn’t have Nike shoes growing up, and I turned out just fine (allegedly). No emotional damage at all.

Buy nothing to save 100%

It is Amazon Prime Day, a sort of Black Friday for those of us with an Amazon Prime membership. A not so elaborate ruse to separate you from your hard-earned money.

Because the item you actually want to buy would never go one sale during Prime Day. That’s not how it works. What do go on sale are things you didn’t even realize you wanted to buy. Take for example the AirPods Pro 2 going for a never before seen low price of $170. This utterly fantastic price creates intense FOMO to hook in customers. Because, what if we never see this price ever again?

Then again, who doesn’t already have a pair? My set of AirPods Pro 2 gets plenty usage on the daily.

In previous economies (as in: not in this economy), I would have bought the AirPods Pro 2 at that rock-bottom price. (True ballers have backup earphones in case their main unit gets lost or craps out.) See how that works? Amazon would have tempted me out of $170 that I had zero plans to spend. People see an item with a tremendous percentage discount, and their minds immediately switch to justifying. I can really use a new Dyson vacuum! Look at how much money I am saving!

Spending money to save money. That’s the essence of Prime Day and Black Friday. Guess what? I saved 100% by not buying anything.

Well, that’s not true. This Prime Day I was able to snag a 50-pound kettlebell for $50. When it comes to gym weights, you want to aim for paying one dollar per pound. I’ve long since progressed from my current 40-pound kettlebell, and have been eyeing a 50-pounder for a few months now. I was not expecting it to be discounted for Prime Day, but I was pleasantly surprised. Well played, Amazon.

Be a player

In the capitalist economic system such as ours, it is very important to have capital (duh). That’s how it works. You literally cannot survive without it. We trade our labor, working a job for money in return, just so we don’t starve and sleep on the streets. Equally important then is to avoid squandering all of the capital we toiled so hard for. Having adequate savings is how we thrive.

It’s incredibly calming to know that you’ve got enough money in the bank to cover any surprises. I cannot imagine the stress of living paycheck to paycheck. A sudden, unplanned cash event can turn into a downward debt spiral. A Sisyphean hole that you keep shoveling stuff in, but never fills completely.

If anyone were to accuse me of being privileged to not have to live paycheck to paycheck: get the French out of here. My parents of a combined $2,000 income - for a household of four - managed to save enough to buy me a brand new car when I graduated from high school. I’ve read enough Reddit posts to know that lots of people out there - of all income levels - have a spending problem. No matter how much you make, you should spend less than that. It’s not a value judgement, it’s math.

Because our surplus money can then be used to participate in the capitalist system: by investing it. That money becomes capital for others to turn a profit - by serving the needs of the customer. The return on our investment gets continuously reinvested towards other ventures, thereby compounding the growth. That is how we thrive in this economic system.

Don’t hate the game; be a player.

Just keep buying?

What if we simply stopped spending? Let’s vote with our wallets.

With all the price inflation going on, the one thing consumers have control over on the supply-and-demand seesaw is our spending. Prices too high - I don’t like it - therefore I am not buying (looking at you, McDonald’s). If enough of us do that, then the proprietors will have no choice but to lower prices. At least that’s what I was taught in economics 200.

Of course, people are still happily(?) buying. That’s why we have not seen a reduction in prices. The entrepreneur wouldn’t lower them if current pricing is sustainable in terms of customer count. Any savings in production cost should be pocketed as increased profit margin. It’s not greed, it’s math. People aren’t running charities. When high prices actively hurt the bottom line, only then will they go down.

Nearly half of Americans cannot cover a $1,000 emergency, and consumer credit card debt is at record highs. That tells me that lots of people are recklessly spending money well into the red, seemingly undeterred by inflation. Please don’t give me the bullshit about folks being poor and unable to afford necessities - thereby going into debt: my parents made less than $2,000 a month for a household of four for the longest time, and yet they still managed to save money over the years.

Overspending is the problem. During the pandemic, when supply chains were impacted, new vehicle inventories were low. A classic supply and demand problem: low inventory, high transaction prices. Because the American appetite for cars is insatiable. I never got mad at dealer markups, because they exist precisely because someone out there is willing to pay. If absolutely nobody was willing to pay, then the markups wouldn’t exist.

It only takes one. And it only takes consumers continually spending for the current high prices to remain. That’s not going to be me, though. I am hugely price elastic. Printed books have increased in price, so now I begrudgingly buy the digital Kindle version.

Ads all the way down

Ever notice there’s advertisement in absolutely everything? Even things that formerly did not have any ads. Amazon Prime video is now showing ads in its video content. To get the ad-free experience as before, you have to pay extra per month. It’s just like watching cable TV: many ad breaks within a program. I thought the whole point of “cutting the cord” was the ability to watch an entire episode uninterrupted? How the tables have turned. The arc of progress is a circle.

All because of ads. The entire house of cards is built on ads. Google can’t afford to give away stuff like Gmail if adverts weren’t the majority of the billions in revenues. Your favorite sports league’s viability is entirely based on the ability to sell ads - either at the arena, or on TV broadcasts. The reason WNBA players don’t make as much as NBA players is because they can’t attract enough advertising dollars. (It’s definitely not sexism.) Our favorite online platforms - that we use for free - wouldn’t exist without ads. We’re not the customer, we’re the product.

Downstream from all these advertisements is consumer spending. That’s the other major leg on this house of cards. Ads induce people to buy things they didn’t even realize they needed. Imagine if people didn’t buy, that every adult in this country is fiscally responsible, and consumer credit card debt is not a giant sword of Damocles. This economy would crumble. Companies would spend less on ads. Netflix wouldn’t have big budgets for its TV series. Your favorite online publication might have to charge subscription fees.

Not that I am wishing for the economy to go to shits. I’ve just become more aware of how pervasive advertising is, how much it props up a lot of things we use and enjoy. It’s kind of icky feeling, honestly. In response to Amazon Prime now showing ads in its video platform, I will be way less inclined than I already am to watch anything on that platform.

Big spending season

It’s September already, and that means big spending days are coming ahead. The $250 annual fee to host this very website on Squarespace is coming due. So is the $1,100 six-months insurance premium on my BMW M2 Competition (I’m just glad it didn’t increase). On top of that, the $600 California license fee is due on the BMW. A surprise to nobody: it’s expensive to own a high-dollar sports car. At least maintenance is still free this year (also this month), the final one of three.

Traditionally, September is new iPhone month as well. As a person who’ve bought a new iPhone ever year since the iPhone 7, I’m staring at yet another thousand dollar outlay (spread over 24 months, whatever, all the same) on top of the aforementioned. But perhaps not? I’m kind of considering not making the upgrade this year.

The reason I’ve been buying new iPhones annually is because of the camera improvements on every new model. I’m sure the forthcoming iPhone 15 will be no different. However, this year I bought a Fujifilm X-T5 camera, and I’ve simply fallen in love with using that wonderful device. I’ve fallen back in love with photography, too. Now that I’ve unencumbered myself of any arduous editing, my desire to go out and shoot photos have increased dramatically.

What does this have to do with the iPhone? Well, I’ve come to dislike the photos taken with my iPhone 14 Pro. The iPhone’s over-sharpened, high-dynamic range look compares poorly to the warm and sultry tones of the Fujifilm. It’s a throwback to the early days of smartphone cameras: for the serious stuff, you want to take the photos with your “real” camera. Nowadays, I want to take photos with the X-T5 as much as possible.

It’s not the iPhone’s fault: computing power can only do some much against the laws of physics (much larger sensor in the X-T5, obviously). Apple will have to wow me plenty come next Tuesday to entice me enough to upgrade this year.

Clearing the slate

Last week, I noticed a coworker checking out bicycles (of the self-pedaling kind). I asked if he’s looking to buy, or merely window shopping. Somewhat meekly he replied that he really shouldn’t be looking to buy, because he’s already got a bicycle that he spent a relatively significant sum on. Alas, the upgrade treadmill comes for us all. We’re always looking for the next better thing, aren’t we? This is why I’ve yet to keep a car longer than three years. (My BMW M2 is coming up to that threshold in September…)

Another coworker chimed in with a tip: if you truly wish to replace something with a new/better of the same, you should sell the one you already have first. That way, the slate is clean, and you’re once again deprived of the thing you want. (Ignore the depreciation, obviously.) Coincidentally, the coworker looking at bikes said he actually did put his old bike up for sale! And soon as it sells, he’ll have no reservations about buying the newer, shinier replacement.

Inspired by this, I decided to give my old Sony A7R2 camera (plus two lenses) to a photography enthusiast friend of mine. For free. I cannot be bothered to put it up for sale, wasting time with tire-kickers and having to go to a UPS store for shipping. I’ve had the camera for seven years, it’s served me well; it’s time to let it go cleanly and smoothly. Never mind the fact I hardly use the camera these days. By offloading the camera to my graciously accepting friend, I am now free to make a move for a newer camera.

I’ve been admiring the Fujifilm XT-5 for awhile now. It’s not an easy decision to switch from one camera brand to another, because you essentially have to re-buy everything that isn’t the memory card. The draw of the XT-5 (and any Fujifilm camera) is the film simulation: essentially a filter on your shots that replicate how old film cameras would look. No editing, just straight out of the camera. An easy button for when I don’t want to spend hours editing hundreds of RAW files.

Now I just need the XT-5 to go on sale…