Ramit Sethi- Useless Black Friday Advice

OK, Black Friday was yesterday. I didn’t have a chance to write a blog post until now.

Ramit Sethi is one of my favorite bloggers. He’s the blogger behind I Will Teach You To Be Rich. He wrote a post yesterday about how the typical financial pundit the media digs up for segments will whine and complain about typical Black Friday behavior.

Black Friday: the biggest consumer spending day of the year. And also the day with the most annoying advice in the world.

Seriously, guys, you would not believe how many press releases I’ve gotten about how what a terrible, scary, foreboding day this is going to be for our country. And every “expert” is eager to take advantage of it.

“Americans are spending too much!” these so-called “experts” will cry. “They just need to _____ (keep a budget/stop spending/resist evil marketers).”

They’ve been repeating advice like this for decades, but has anything changed?

No. We spend more and save less than almost ever before.

When your entire philosophy rests on urging Americans to NOT do something they want to do, chances are very good that you’ll fail. It’s like trying to push back a tsunami.

I’ve been reading Ramit’s blog for years now. He puts an interesting perspective on personal finance. Rather than telling you to be frugal in all your ways, he suggests spending what you want in those areas that you value, and cut costs mercilessly in other areas. A friend of his greatly values eating out, and spends about $21,000 a year doing it. But he lives in a smaller apartment and drives a smaller car, as those things don’t mean as much to him.

I don’t quite understand Black Friday. I used to go Black Friday shopping with my wife, but eventually I got fed up with it. I’m not convinced the bargains were that good, and getting up at 0300 to save a few dollars on something that would end up on sale for the same price a few weeks later didn’t make sense to me. I started staying home with the kids.

This year, she did the midnight madness thing. She was out all night shopping. No thank you. It made me feel refreshed to get up at 5 for work.

Banks Getting Rid of Free Checking?

I saw a post on Lifehacker this morning about banks getting rid of free checking. Apparently they have their customers back over a barrel and can do what they want once again.

I've only used the services of one "bank" in my life. That was Commerce Bank. But I got tired of their stupid games and closed my account. Commerce bank had some silly policy that if you deposit a paycheck on Thursday, somehow the funds would not be available until Tuesday even though they were reflected in your balance. That is, unless you get out of the car and go in the bank and cash out part of the paycheck at the counter. Then the entire thing was available. It never made sense to me at all.

I have almost always conducted my banking at credit unions. I started with Security Service Federal Credit Union in San Antonio, Texas, when I was 13. I started with a savings account, and opened a checking account when I was 16.

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MSN: 8 Lottery Winners Who Lost Their Millions

I’ve written several times about why I don’t waste my money on the lottery. I waste it on a lot of things, but not lottery tickets.

I know a lot of people who believe they can become “rich” through the lottery. I don’t buy it. I’m hardly an expert, but I have done more research on the lottery than anybody I know. That’s kind of sad, actually. I have 6 articles bookmarked on delicious. I’ve probably read a few more, but forgot to socially bookmark them. But that’s far more research than most people do on actual lottery winners.

It’s funny though, how I’ve read and bookmarked 6 articles, and nobody believes me that I can’t find evidence of a single lottery winner who didn’t blow the whole wad and end up worse off. They keep telling me “but, isn’t it possible that there’s somebody out there who won the lottery and was smart with the money?” I reply “Sure, it’s possible, but I haven’t come across one in my research. If you find one, please get me the information.”

Today on MSN, I found an article 8 Lottery Winners Who Lost Their Millions. Once again, it’s an account of people who won the lottery and lost everything. Some people lost families.

I do believe it’s possible that there are lottery winners out there who didn’t ultimately lose at life. But I don’t have any accounts of them. If you know of one, please let me know.

Another Story of Lottery-Ruined Lives

I’ve written many times on this blog that I don’t play the lottery. I’ve explained why. I am not aware of a single story of a lottery winner going on to peace and prosperity. Every single time I come across stories of the aftermath of a winning lottery ticket, I read about ruined families, shattered lives, and fractured communities. I’m willing to admit to the “if it bleeds, it leads” principle in the media, and that possibly only the ugliest stories actually make it into news, but I still haven’t found a good story about a lottery winner. I’m not convinced that any good can come from winning the lottery. I’d like to be proven wrong, but every time I step in to research the subject, I find more supporting evidence for my original opinion.

Recently, I came across the story of Jack Wittaker, a West Virginia man who rose from poverty to ownership of a construction company. He won $314 million in the Power Ball. “Jack opted to take his prize as a one-time payout of $113,386,407.77, after taxes.” Taxes took more than $200 million. Who really won with that ticket?

“He was determined, he said at the time, to live as if nothing had
changed, except that he could spend more time with his family. He was
going to keep answering his own phone, opening his own front door and
turning to God for guidance. “He’s still working on me,” Jack said,
sounding modest.”

After that quote, the story degenerates into visits to racetracks, strip clubs, and all of the ruined lives left in the wake.

Everybody I know who plays the lottery claims that if they win, they’ll give tons to charity. They’ll give a bunch to a church if they attend one. But few are doing such things now. I think it’s silly to promise to do such things AFTER winning the lottery if they’re not part of your life BEFORE. We all know you’re full of it if you claim you’ll suddenly turn into a philanthropist after winning the lottery.

I don’t have a single plan for what I would do if I won the lottery because I don’t play the lottery. I don’t like to listen to people talk about “Oh, if I could only win the lottery, my life would be so much better.” I’m sorry, but every single account I have ever read about the aftermath of winning the lottery says otherwise.

I wrote a blog post last year linking to another post about the “Language of the Perpetual Poor.” I have since come to the controversial conclusion that I would rather have people cuss around my children than say things like “I wish I could win the lottery” and “I hate my job. I wish I could get fired and go on unemployment.”

Most people I know who talk like that have not read a single book about personal finance or personal development. Most are not actively working to improve themselves within their job or trade, or to learn new skills to get a better job or enter a new trade. They just sit around complaining and letting life happen to them.

I’ll stop ranting. Please, read the story of Jack Wittaker linked above. Then answer the question: (you’re welcome to answer in the comments) “What makes me think that my life, family, community, church, etc… would turn out any different if I won the lottery?”

I Appear in I Will Teach You To Be Rich Book Testimonial

I bought Ramit Sethi’s book I Will Teach You To Be Rich early. That gave me access to an insider community that Ramit formed, although I ended up as usual not having as much time to participate as I would have liked.

Prior to the official launch of the book (I bought it on pre-order, and Amazon shipped mine a few weeks early prior to the launch), Ramit asked for pictures of his readers with the book. I managed to sit down within 15 minutes of the deadline, and I decided to do the best I could. I used the camera on my Samsung Epix. The self-portrait mirror wasn’t helping, so I was using the screen reflection of my Epix on my laptop to line up the shot. I took 3 or 4 pictures. None of the pictures of the book under my chin were acceptable, so I held it off to the side and fired off a shot. I then emailed the picture from my Epix to Ramit. I was surprised to see it in the testimonial clip on YouTube.

If you’re looking for advice on personal finance, get this book. Most people are stumbling around in a broke daze, accepting financial advice from other broke people, while nobody seems to want to actually read a book written by somebody who knows how to handle money. This is such a book. You can buy the book from my Amazon affiliate link.


Forbes: How To Make a Million Before You Graduate

This is an interesting article on Forbes.com about teenagers who founded businesses and made a lot of money. I’ve always been curious how entrepreneurs think. Personally, I dread the moment when I’ve gotten all I can from one job and since there’s no possibility of advancement, I have to find a new one. I really don’t like that moment. I’ve always wondered how some people can see opportunities all around them and go for it. Honestly, I don’t believe they’re much smarter or harder working than I am. I’m sure I have the intelligence and the work ethic to succeed at anything. What I don’t have is the mindset. I don’t currently have the capability to see opportunities.

Lately I’ve been trying to study the mindset. I’ve been trying to learn how entrepreneurs think so I can emulate their thinking. I’d love to set up a business, or a few systems that generate other income streams besides a job. I actually do have a few ideas, but I’m not quite sure how to get them off the ground.

Financial “Experts” Are Idiots: Jon Stewart Smacks CNBC

I’ve paid little to no attention to networks like CNBC. It’s funny now to watch mashups of the predictions and enthusiasm of financial journalists and other assorted self-proclaimed “experts” in light of history.

Tim Ferriss: How To Be Jason Bourne…

Tim Ferriss has an interesting post with excerpts from a book about how to disguise assets and become an international citizen. I’m almost paranoid enough to get this book. In any case, it sounds interesting. I have no idea if things will ever get THIS bad in America, but it never hurts to be prepared or have alternative plans, does it?

Do Schools Really Not Teach Personal Finance?

I was reading through some posts on I Will Teach You to Be Rich when a thought suddenly occurred to me. Robert Kiyosaki sold quite a few copies of his book by claiming that there are secrets that the rich teach their kids that the poor and middle class do not. Perhaps there is something to that claim, but personally I think it’s just a catchy phrase to sell books. Yes, I’ve read Rich Dad, Poor Dad. It was very inspirational.

I’m not going to try to debate Rich Dad, Poor Dad. I think John T. Reed has done a better job with that than I ever could. I just want to look at the claim that public schools don’t teach kids to handle finance, and that poor and middle class parents don’t teach their kids how to handle finance.

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Dave Ramsey Offers Free Report on Investing

I get all kinds of junk in my Gmail spam folder about special reports on investing. They also invite you to participate in some kind of “pump and dump” penny stock scam. That’s not what this is about.

If you’ve followed my blog for any length of time, you know that I follow Dave Ramsey and put a lot of stock in what he has to say. I listen to his podcast almost daily. One of his ELPs (Endorsed Local Providers) has a free report that Dave is making available on his website. Click the link and download it. Dave does not advocate getting out of the market. He advocates buying certain varieties of good growth stock mutual funds. Buying single stocks is too risky. When you buy single stocks, you’re at the mercy of idiots who short Apple whenever Steve Jobs sneezes or spends an extra minute in the bathroom. I don’t know whether to laugh or cry when Apple stock suddenly drops several percent on any news story however inane.

Buying funds and planning to stay in for the long term is the strategy that pays off every time.