A Paid-Off Car with High Miles, Not a Brand-New Car with Payments, is a New, Unspoken American Status Symbol

I noticed that back a few years ago, when I lived on the edge of Nashville, where income levels were lower than where I live now in my commuter town, that it was the norm to see so many fellow commuters driving luxury cars, on every side of me… which were obviously leased. Compare that to where I live now- people make more money, but drive older cars; not many Mercedes’ to be seen.

Owning a brand-new car is not worth celebrating, unless the person paid cash for it. Otherwise, the person is paying more money for something they couldn’t afford in the first place.

Imagine the irony: A person doesn’t have enough money to buy the product, so they agree to pay even more of the money they don’t have in the first place- in interest.

The Eighties and Nineties are long gone. No longer can we pretend we are doing financially well because of the false status symbols bought with credit. That mentality ended with the Financial Crisis of 2008; which happened to be the year I got married.

I believe our culture is now realizing that the new status symbol is being able to afford more, but choosing to save and invest that money instead.

If anything, the new status symbol is to be able to brag on how little money you paid for a product, not to allow others to believe you spent more. The new status symbol is being able to figure ways to save money and make money on the side, then share that info with everyone else. That has value.

We are living in the aftermath of the Financial Crisis of 2008. My generation is becoming the new version of those who lived through the Great Depression.

Being frugal and in full control of your finances is the ideal; not necessarily making a lot of money, only to continue to struggle to pay the bills and live in debt. Now it’s all about low overhead and living well within your means.

This month makes exactly 13 lucky years that I’ve owned my 2004 Honda Element, with 170,000 miles and a salvaged title; making it worth only about $500. Two years ago, it came within about $25 shy of being totaled, when an albino dear ran into my driver’s side door and wheel. (True story!)

But the way I see it, that car is worth a whole lot more than what I could sell it for.

It’s funny how typically, when a person “buys” a new car, the typical reaction is to be happy for them: “Oh wow! I like your new car! I wish I had something nice and shiny like that!”

When I overhear a conversation like that, I always privately think, “But yeah, now they have to be making monthly payments for the next few years, coupled with the insurance payments that accompany a new car…”

And it’s even worse if the car is leased, because there’s no chance of making any profit when the lease is done; in fact, you may end up having to pay more money if you drove too many miles or caused damage to the car.

So yeah, I am proud to drive my 2004 Honda Element. It’s a bit rusty and my kids complain about having to ride in it because, “It’s so old!”

But hey, it runs and it’s been paid off well over a decade.

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At Age 37, My Wife and I Have Begun Investing Our Money, Thanks to Charles Schwab

At age 37, I am fully aware that I am now at the halfway point of the average American lifespan. I suppose this is literally the most appropriate time to have my midlife crisis.

Finally, I can trade in my old paid-off Honda Element for a brand-new Jeep Wrangler, take a spur of the moment trip to Spain, and start training for American Ninja Warrior…

But instead, I am focusing all that energy into planning for the 2nd half of my life- and my wife’s, as well as our children’s future.

My wife and I got married 10 and a half years ago, right in the middle of the 2008 Financial Crisis.

The first half of our marriage was spent building our careers from entry level positions and trying to manage the tens of thousands of dollars of debt we were in; largely due to college loans and our wedding.

The most recent half of our marriage began with us finally becoming debt-free in 2013, buying the last steal-of-a-deal new home in the Nashville area, and both finding ourselves far enough into our careers and side hustles that we started making a comfortable living.

But as Maslow’s Hierarchy of Needs pyramid explains, your goals and motivations evolve as you overcome your previous more basic needs and desires.

Now the focus is… how to invest our steady stream of income into our future.

I thought it was as simple as just paying off our house, then worrying about retirement afterwards.

However, my wife has been listening to the Moneywise program on Moody Radio on the way home from work each day. She explained to me that based on our interest rate on our home, it would actually be a better investment of our money to start building our retirement now, alongside paying off our mortgage early.

My wife then set us up an appointment with Charles Schwab financial investment company, which she had been hearing endorsed on Moneywise.

Today was the big day.

Our financial advisor helped us rollover my 401K from my previous employer to traditional IRA and select a portfolio for it. She also gave us direction on determining our financial goals so we could better plan our retirement and our kids’ college funds.

This was a major milestone for us. Here’s to the second half of life!

Dear Jack: What Happens When You Give $100 to a 5 Year-Old Boy for His Birthday?

5 years.

Dear Jack,

We just got back from your “destination birthday party” in Destin, Florida. Instead of having a party back home in Tennessee, the 3 of us (technically 4, if you count Baby Holly or Logan in the womb) decided to take a family vacation to celebrate your 5th birthday. To make things extra special for you, Lexus let us drive a Lexus GX for the trip!

Dear Jack: What Happens When You Give $100 to a 5 Year-Old Boy for His Birthday?

Over the next week or so, I’ll be writing plenty more about your destination birthday party. But as for today, I should mention one of the overall themes our 4 ½ day vacation.

As we were leaving Tennessee, I Instagrammed a picture of you with the stuffed animals you chose to bring on the trip.

Jack is bringing a few of his friends along for the ride.

          Jack is bringing a few of his friends along for the ride.

In the likeness of the 1985 movie Brewster’s Millions, you felt the need to spend all $100’s worth of your gift cards you received as birthday presents before we left Florida.

Mommy and I put the additional cash and checks that you received into your savings account, but as the $100 in gift cards, we decided it was fair to let you manage how it was spent.

After all, it was your birthday party and birthday weekend. Mommy and I wanted it to truly be a big deal to you.

So as soon as we arrived in Destin, we stopped at a Barnes & Noble where you spent your first $15; on a “Shark Week” shark.

I Instagrammed that event as well:

And the beginning of the birthday money spending begins...

 And the beginning of the birthday money spending begins…

We took you to Target to let you possibly spend some of your remaining $85. While Mommy looked around for stuff she needed, I hung out with you for nearly an hour in the toy aisle; serving as your budget manager.

I helped explain to you how much things cost and how much remaining birthday money you would have if you bought that item.

For example, you were interested in a Power Ranger gun that you had seen on their show… but it cost $27!

You ended up buying a $13 Play-Doh ice cream shop. And boy did you have fun with that once we got back to the resort!

However, that was the only item you spent your $100 on that wasn’t a stuffed animal.

You later bought a baby shark while we were on the dolphin cruise. And then a baby penguin when we visited the Gulfarium. Then several more stuffed animals throughout the course of our trip…

Of course, we reminded you that you didn’t have to spend all $100 on the trip. But again, it was your birthday, so we wanted it to be your decision on how you spent the money; since it wasn’t cash that Mommy and I would have put in your savings account without you knowing it.

Dear Jack: What Happens When You Give $100 to a 5 Year-Old Boy for His Birthday?

We reminded you had enough money to buy anything at all you wanted… even a brand-new bike!

However, the reality of it is that as a 5 year-old boy whose parents both work full time, there’s not a lot of time for you to ride your bike; especially since how weekends are often filled with running errands, like buying groceries and getting maintenance done on our cars.

When I considered which toys you actually spend the most time playing with, it’s not the plastic ones so much.

Dear Jack: What Happens When You Give $100 to a 5 Year-Old Boy for His Birthday?

Granted, you love building Legos and you love your massive Hot Wheels and Thomas the Train collections… but ultimately, your exhaustive stuffed animal collection gets the most play time.

Every morning when we get ready for school, you always choose 2 animals to take to school with you.

I get it. You don’t see them as toys, but as real animals that you enjoy taking care of. You love pretend that they are babies that you are in charge of.

Granted, that concept goes well with the fact you have a baby brother or sister on the way…

I recognize these stuffed animals serve as tools for your psychological and social development. They’re much more than just stuffed animals.

Dear Jack: What Happens When You Give $100 to a 5 Year-Old Boy for His Birthday?

So it doesn’t bother me that you spent $100 on stuffed animals (and a Play-Doh set) during your destination birthday party. I’m all for it.

I’m for whatever toys are going to help your development as a little boy. You spent most of your $100 on stuffed animals because in your currency, they hold more value than any other kind of toy.

Ultimately, a decade from now, it’s all the same anyway. Looking back, I’ll know that whether you spent your birthday money on stuffed animals or Power Rangers or Ninja Turtles, it made you happy as a boy on 5th birthday.

And that’s all that matters to me.

Love,

Daddy

Take This Parenting Survey for a Chance to Win a Money Gift Card, from Clark University

Take This Parenting Survey for a Chance to Win a Gift Card, from Clark University

There are currently four $50 gift cards, one $100 gift card, and one $200 gift card up for grabs, as undergraduate Kayla Landis at Clark University is currently working on her senior thesis which focuses on how other people, namely parents and adults, perceive parents whose children behave disruptively in public.

The study also addresses some topics such as childhood mental illness and disability.

Kayla has asked me to utilize my reach as a blogger to help her find parents who would be willing to take this online survey, in exchange for a chance to win one of these previously mentioned gift cards.

Winners of the raffle will be drawn after data collection has been completed. The tentative date for this is October 21st.

Kayla had stumbled upon Family Friendly Daddy Blog when she was searching for parenting blogs, particularly blogs written by fathers, as this is a demographic that she needs more participants from.

She told me she was struck by some of the posts on the site, including the “Dear Jack” segments and the conversations about identifying as a particular race/knowing how to identify yourself. This just stuck out to Kayla and she thought that perhaps someone who blogged about interesting topics like these might be interested in promoting herstudy.

Kayla found that when blog sites promote the survey on social media, she tends to get a lot of participant responses.

So, if you’re interested, click on this link below. If you complete the survey, you stand a chance of winning a gift card; plus, you’re helping out an undergraduate.

https://clarku.co1.qualtrics.com/SE/?SID=SV_0kxsME5Va34ZLU1

This is a study being conducted by Kayla Landis, an undergraduate student who is doing research with her adviser, Dr. Nicole Overstreet, in the Psychology Department at Clark University. This study focuses on how parents perceive other parents whose children behave disruptively in public spaces; mental illness and childhood disability are also addressed. The study should take no more than 30 minutes to complete. All participant responses will remain anonymous; however, participants may choose to provide their email address at the end of the study if they wish to be entered in a raffle for one of several Visa gift cards.  All email addresses will remain confidential.

Dear Jack: Why We Didn’t Buy a 2011 Suzuki SX4 This Past Weekend (& Trade in My 2004 Honda Element)

4 years, 10 months.

Dear Jack,

Last Wednesday, as I was driving Mommy’s car back from a work trip in Kentucky, Mommy called me to explain that while she was driving you home from pre-K in my 2004 Honda Element, the passenger side window just rolled down by itself.

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

And it wouldn’t roll back up.

Knowing that this upcoming January makes 10 years I’ve owned this car, Mommy and I decided we should heavily consider trading in my car for a “new” used car.

So she starting emailing dealerships. Meanwhile, I went to one dealership in person last Thursday on my lunch break.

Because we are Dave Ramsey followers, we are refusing to “finance” a car; despite those natural temptations that we are exposed to. We will only pay cash for a car. If we don’t have enough cash to afford the car we want, we simply can’t afford it. So we walk away.

We found a 2011 Suzuki SX4 with less than 50,000 miles, in our “cash only” price range.

So I spent my Thursday lunch break to check out the car. It was everything I needed. However, I did some research that night and discovered Suzuki stopped production in America back in 2012, and they have no parent company.

In other words, it’s a great deal on a dependable car that ultimately I would have great difficulty trying to maintain, as there are no shops that readily have proper tools or parts available to fix it.

After that, Mommy and I realized it’s best we hold out until January, when we have that many more thousands of dollars (from ongoing monthly savings) to pay in cash.

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

Here’s the twist on this story: Over the weekend when we picked up my Element after they fixed the window, the guy that evaluates the worth of used Hondas there for trade-ins left me a message.

My 2004 Honda Element is worth $5,850, which is about $3,000 more than I had anticipated; nearly double!

That’s because, according to the elevator, “People aren’t trading in Elements- they’re keeping them. That’s why your Element is worth more than whatever it says online. You’re the first person to ever come back and tell me you’re actually interested in trading yours in.”

So in the end, it was totally worth it in the end to pay a few hundred dollars to fix my window.

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

It’s like instantly making $3,000! We’re still planning on holding out until January, when we can have that much more money to buy a “barely used” vehicle for our family, when we trade in my Element.

Something else this experience taught Mommy and me is just how boring and unattractive we are to used car salesmen the moment we begin the conversation with, “I’m a Dave Ramsey follower; I will only pay with cash.”

You can literally see the hope in their eyes disappear once you say that. Because most people are willing to “finance” the car. That means there’s virtually no real limit on price, since the focus becomes on the monthly payment, not what person can actually afford.

That’s something I equate with a magician distracting his audience by waving a pink handkerchief with one hand while he hides the “disappearing” object in the other.

I will make sure you always understand the true meaning of the phrase “affording a car.”

It’s this simple: If you can’t buy it on the spot in cash, you can’t truly afford it. That’s why dealerships are so eager to have you finance the “purchase.”

Similarly, an individual or a family is only as financially wealthy as their savings account in addition to having no debt other than their house; that’s because a home is considered an asset growing in value, not a depreciating liability like a vehicle.

So our family will wait. By January 2016, our savings should be that much higher if everything remains on course; meaning we can pay cash for the vehicle that we really want. And as I mentioned, coincidentally, this coming January will be exactly one decade since I purchased my 2004 Honda Element.

Ultimately, I’m not sure if I’m technically going to be downsizing or upsizing…

My Honda Element is a decent sized SUV, but it only has 4 seats. That’s never been a problem, but I think it would be a good idea to have 5 seats for the next car, even if the next vehicle is smaller over all.

Until then, I’ll keep driving my green toaster and saving green cash.

Love,

Daddy

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

Understanding The Psychology Behind Gambling: New Infograph Included

Last week I published, Lottery Commercials Don’t Target People Who Are Good Money Managersin which I explained how I ultimately am not a target for those who advertise lottery tickets.

While I’m not personally opposed to a lottery, I feel I’m good enough at math and good enough at responsibly managing my money than to buy a lottery ticket on a regular basis.

I know that my chances of maintaining an overall better cash flow, for a permanent basis, depend on me having paid off my debts, saving and investing my money afterwards, and not playing the game of trying to impress people with faux status symbols, like leased vehicles; as I explained in A True “Status Symbol” Is A Paid Off One, Including Our New House (Which Is Not).

So I couldn’t help but notice that this infographic below, Psychology of Gambling, seems to back up why I avoid that particular mindset in my everyday life.

The infographic points out the illusion of control, the sense of reward, the excitement of chance, and our natural sense on optimism when gambling…

Or in my opinion, choosing to play the “American lifestyle game” in which we try to impress people we don’t care about with that things we bought with money we don’t have. (I sort of style that line from Dave Ramsey!)

Enjoy.

Infographic, courtesy of VegasSlotsOnline.com.

Psychology-of-gambling-870

Lottery Commercials Don’t Target People Who Are Good Money Managers

What’s the first thing I’d do if I somehow ran into a very large amount of money?

Lottery Commericals Don't Target People Who Are Good Money Managers

You guessed it. I would immediately pay off the mortgage on our brand-new house. It would be quite the celebration!

Because I know that I’m paying nearly 100% interest for the 1st half of the life of that loan.

I wouldn’t care about a new car, or a boat, or a big trip. All I would care about would be paying off the mortgage.

Then… placing the rest in savings and investments.

From there, I might consider a family vacation or newer cars; but that would be my last priority.

Yet I’ve never seen a lottery ticket commercial or an injury lawyer commercial showing a winner who joyfully exclaims, “With the money I won… first, I immediately paid off the mortgage on my house, then put the rest in savings and investments, so that I’ll actually be making money for the rest of my life instead of losing it quickly just because I have more!”

Granted, that’s what I’d say.

But apparently, that’s not what the targeted audience for lottery ticket winners or injury lawsuit winners would do, based on what is portrayed in these commercials:

When I see these kinds of commercials, I know that the marketing department for the lottery and injury lawyers are not baiting people like me, who have learned the hard way by living in debt for years, but who finally became debt free after following the teachings of Dave Ramsey, and who are now focused on paying off a mortage ASAP, to better save and invest all future income from there.

Of course, I’m not against the lottery or injury lawyers; I see good in what they do.

I’m just simply deconstructing some of the psychology involved in some of their marketing… the way I’ve pointed out in the past that fast food logos almost always include red and yellow as their main colors to try to make you slow down (like you do at a yellow light) and stop (like you do at a red light) for their restaurant.

Lottery Commericals Don't Target People Who Are Good Money Managers

It appears that lottery commercials are trying to make people think that if they regularly “invest” in lottery tickets, they will stand a decent chance of living the rock star (or rap star?) lifestyle, by blowing the money on depreciating liabilities, instead of assets that will hold their value; or in legitimate, profitable investments.

Perhaps this is what the advertisers want people to think when they their commercials:

“You deserve more money than you know how to manage, so once you win, spend your money on consumer items shown in this commercial, ones that immediately lose their value once you buy them, instead of ones that keep or gain value.”

Lottery Commericals Don't Target People Who Are Good Money Managers

Like I said, I’ve yet to see a lottery or lawsuit commercial that portrays the winner immediately paying off their mortgage with the money; then going on to save and invest the rest. I’ve never heard that even mentioned in one of these commercials, yet it’s the very first thing I would care about.

It really shouldn’t be that ironic.

So apparently, people who make lottery ticket commercials and injury lawyer commercials don’t have me in mind as a marketable demographic.

Maybe then it’s not that ironic that back in 1999 when I woke up in a hosptial after having been knocked unconscious after wrecking on a bike, and an injury lawyer was there as I opened my eyes, offering to help me “win the money I deserve,” I politely thanked him, but turned him down.

And for the record, I rarely buy a lottery ticket.