What Do You Want to Hear? Dumb Decisions

Good Morning, 

I can honestly say I love writing about money and personal finance, it might be my new passion right up there with sports, I think, read, and listen to this stuff every day.  I usually write about many things that involve my every day life for personal finance, but maybe there is something more.  I guess the better question is "What do you want to read about"?   

My personal adventure includes credit cards, student loans, investing, starting my own side business, corporate America, and everything in between.  For many of us we are hard working, who came from a small town.   Some have chosen to stay, some move into a bigger city, and others get as far away as possible.  While I don't know how each and every person is doing that I grew up with, I do know many of you have stable jobs and make a good living.  I know there are outliers on both sides that don't make 30K a year and others that make well over 100K.  Either way whether you make a small amount or a large amount the numbers are the same with personal finance.  Because I think that relating to some of the "Dumb Decisions" I've made over the years, this might get the ball rolling  for "What do you want to read about" and these are just a few of mine: 

1. I took out Student Loans to pay for every cent of college.  
2. I paid for my first spring break with a credit card, once again every cent.
3. My first car that I bought with my own money was a Mercedes Benz.
4. Moved to Florida without a job and minimal savings.
5. Pursue my passion of coaching by taking an unpaid position 80 miles away
6. Pay for my time in Florida with credit cards after my savings ran out

So these are just a few "Dumb Decisions" that I have made over time, I have learned from them which is the most important.  They are also correctable in a short period of time, of course I am paying for many of them today and that's what happens if you notice almost every decision that was made had to deal with debt or was one step away from doing so.  Student Loans, Credit Card, Car Loan,  No job and minimal savings lead to more Credit Card debt.  I cannot blame anyone but myself, I mean what am I going to do, blame my parents for not paying for my college or not buying me a new car for college graduation, come on that's not the way things work.

It's great if you are currently standing debt free it makes many of your decisions much easier, but so many of us have made these not so bright decisions.  The key is stop making these "dumb decisions"  this blog is to point out some of the things that you and I are doing and at the very least think twice before doing them.  I have an example and it can really show the difference in choices and decisions in your life. 

This person does not have a full-time job and when this person does it is often considered low income.  Here are some of the things that I hear that make me believe this person is not going to change or become wealthy or be very far above the poverty level. 

• I need a new car, I saw this vehicle and it's only 10K, I just need someone to loan me the money
• I need a new phone, mine is crap, I saw this new one and it looks amazing, I'll just have to wait till I get paid next
• I'm so glad I don't have to dress up at my job, I'm so glad I get to wear jeans and a t-shirt

This is another list that could go on and on, but when I hear these things I know this person is not going to dig themselves out of this hole, if anything they are going to go further into that hole.  Here's a couple things I wish I heard instead. 

• I want this new vehicle, but the only way I'm getting it is if I pay cash, otherwise I'm just going to drive my car until it dies of old age.
• New phone, no thanks, I was considering cancelling my service or just getting one of those pre-paid phones, because I'm trying to get ahead
• I prefer not to dress up at my job, but I'm working towards a higher position with higher pay so I can have that choice

Do you catch yourself saying things that sound like what a poor person would say?  Or do you find yourself saying some things that the wealthy or this guy  might say? 

Warren Buffett

 I hear it in myself but for me it often relates to food and eating.  Yesterday I heard myself say I'm having a bad week eating, while I ate an Italian Beef sandwich and a soda.  I think the same thing can be said about fat and skinny people, a better word choice of people might be healthy and unhealthy.  These are things that can be controlled, its our decisions.  I make a decision every day to walk up either an escalator or stairs on my way to and from work, I also make that same decision to walk from the train station home.  It was 10 degrees yesterday, but I knew that if I didn't walk home I wouldn't be doing any exercise and that's the decision we have to make to get healthy or wealthy.  People sacrifice for there money, we are not children of the Hilton Family or Kardashian's and were handed money from family.  We need to make sacrifices and better decisions and that's what I'm doing here. 

Please leave comments on decisions you make or made that were good or bad(bad are more fun today), whether it's for health or wealth, It's great to hear them.  Also side note in the upcoming year I'm contemplating taking my blog to Wordpress and getting a little cleaner and more professional looking so be on the look out for that. 

Money Mindset-Owning a Nice Car



Mercury Capri Convertible



Growing up I was lucky enough to have a car that was considered mine, it started with a 1997 Red Mercury Capri convertible, which I think was my Dad buying a convertible during the summer and then realizing we lived in the snow filled winter wonderland known as Wisconsin.  I don't think I really had to pay for anything on that car, if I did it was minimal, insurance, oil change, gas(Yes I remember .99/gallon), nothing too much.



Mercury Tracer



I then moved on to what many people growing up know as my car.  A 1997 Mercury Tracer, Purple of course.  Many nicknames were given, "The Traca' You Can't Replace", "The Tracer You Can't Eraser", "The Purple Barney Car".  All great nicknames for a great car.  I think the car was a couple years old when my parents bought it, some of the upgrades were.... haha who I am I kidding everything was standard, nothing was power, cruise control, that would be my foot hovering over the gas pedal at the same rate, CD player, haha a radio was the only thing bumping in my car.(I did later buy a CD player when I worked at Circuit City).  During high school and college, my parents had me paying the car payment the best I could, about $160 month until I basically couldn't afford it anymore and my parents paid off the loan.


What does this have to do with owning a nice car?  Well I didn't have a new car or expensive, I consider myself lucky for what I had, but nothing brand new or high end like a Mercedes Benz or BMW.  During college summers I lived in the Chicago suburbs and had the pleasure of working at a golf course that costs from what I remember around 80k to join.  So pretty much every car that rolled in there was a 50K car or more.  Rarely did I see the typical American Ford Taurus unless it was in the caddie parking lot.  I associated having money with having a nice car.  Which I think was one of the reasons I purchased my Mercedes Benz.  Now I bought it below Kelly Blue book value, but I felt like the richest man in the world.  My car payment wasn't ridiculous, nothing that I couldn't afford(asterisk )

I shortly realized buying a car with a payment was not smart.  I was paying about $300 month, not including insurance, gas, and maintenance which gets a little higher with a foreign car.  After moving from Florida(need a car), to Chicago(don't need a car).  I was able to sell my car after listing it on Craigslist, I took a hit out of pocket, I think I had to pay about $1200, possibly less.  This might have been the greatest financial decision I have made in my life.

Now when I see someone in my neighborhood driving an Escalade or new BMW, I think they are morons.  Why would you spend so much money on a car, is it to look good, feel good, these are items that are not going up in value?  That's a lot of money.  So let's say you make really good money and pull in 100K, a new Escalade costs about 60K, that still makes no sense to me, unless you are paying cash for this purchase I have to say this is a bad decision.  That's 60% of your salary.  I think knowone should have a car payment and the fair amount for your salary to car ratio should be right around 10%.  So make 200K you can drive a 20K car, unless it's cash then i think that bumps to 20%, so make make 200K a year and you can drive a used Escalade all paid for.

My Money Mindset when I am in the suburbs or nicer area is to see that same BMW and think that they are doing very well for themselves.  Owning a nice car seems to tell me that you have money.  This could be keeping up with the Jones' which is also something that can bring you down in the debt spiral of course.  But I think it's totally different, the guy driving the BMW is a guy doing well making good cash, the guy listening to Jay-Z driving the 60K Lexus is a moron to me.

Do you have a nice car with a payment or a lease?  Do you own a 1993 Toyota Corolla with rust on the side?  Do you ride your bike to work?  Take the bus, train, carpool?  How do you save money with your own transportation?