Thursday, April 23, 2009


To be "Free" in America means debt"free".

That is the beauty of being "rich". "Rich", of course, is a moving target. It helps to define a "target" if you hope to hit the thing. I live in one of the wealthiest enclaves in the U.S. Palm Beach County. (The reason Bernie Madoff came here to pull off his scam is because "that's where the money is".) With all of their wealth, people here, for the most part, are not "rich".

It is all how you define it. Forget "happiness". That abstract cannot be defined. I define "rich" as having enough resources available so that your lifestyle would not be impacted for say... 10 years, if you stopped earning. No, that is not hop in your G4 and do lunch in Rome rich, but the peace of mind that comes with not sweating 10 years worth of bills is incalculable. There are 2 variables: Income and OVERHEAD.

Here is where I am going with this.

I keep hearing members of the Obama administration in the media extolling the "need" to get more "credit" (every "credit" is some contra party's debt) out into the "economy". I want to ask them:

Who's "need"?

Certainly not the American people's "need". They need more debt like a hole in their head.

No, the government "needs" you to go into and stay in debt. The crisis that the government really fears is that folks will actually figure out how to live happily and comfortably with smaller homes, less stuff in those homes, smaller cars, shorter commutes, less fuel consumption, no credit card debt, G-d forbid people actually got GOOD at gardening, planted fruit trees instead of ornimentals, and had backyard chickens - not to mention living together in extended families, thus undercutting "household creation".

This is what the administration truly fears. Because then the economy would "collapse" on "their watch". Never mind that these things will all come to pass in any and EVERY event. The administration has decided to "stay the course" of the past 4 or 5 administrations (nary a difference between them), and they want YOU (I can just see the Uncle Sam poster of Obama in Red, White, and Blue top hat and pointing like Apollo Creed "I want YOU!) to get into debt and stay in debt.

(Ever see the movie "accepted"? Ridiculous, childish, and campy but there is a show stealing scene by Lewis Black tells the parents of a student at his college:

Look, we throw a lot of fancy words in front of these kids in order to attract them to going to school in the belief that they’re gonna have a better life, and we know that all we’re doing is breeding a whole new generation of buyers and sellers, BUYERS AND SELLERS! Pimps and whores, PIMPS AND WHORES! and indoctrinating them into a life long hell of debt and indecision!

If you can find it on the web watch it, otherwise it is almost worth sitting through the movie just to see that one scene.)

Don't fall for it. "Freedom" is being debt free.

Mentatt (at) yahoo (d0t) com


bureaucrat said...

Now I know why you don't like Mike Whitney on, because his solution is to pay people more of a realistic wage. I'm not fixing the brakes on my car today because I'm not living a proper "reduced" life. I'm fixing them because they "NEED" to be fixed (at $300 to start). Same with vet bills (I guess I could let the cats wander and fend for themselves). Same with heat and electricity (luxuries I know). Sometimes the problem isn't solely that we aren't "under-living." Sometimes the problem is the rich and their buddies in government are taking all the money for themselves, instead of investing in a true middle class. Maybe. :)

Greg T. Jeffers said...

Life has always been an "every man for himself" type of event, irrespective of how we come to accept this.

Of course you have to fix your brakes, and Vet your cats. You could have packed your lunch today. You could set the heat at 65 and wear a sweat shirt. On top of that, you could work overtime, a second job, or G-d forbid! Start a business...

These are all things young people can do to make their lives less stressful in their middle and old age.

I am in my late 40's. The time to grind it out is when you are young. Most folks party when they are young and pay for it dearly in middle and old age.

"Young man, rejoice in thy youth"... and remember... "the first years of man must make provision for the last".

oOOo said...

Even for a small house, with a small garden to grow sh1t, the average person, myself included, would have to get into debt.

If I got a 20 Year mortgage with a fixed Interest rate of 5.750% on a
loan amount of 200,000.00 (together with a 20-30% cash deposit it's about the minimum needed to get somewhere with a small garden here)that would work out at 1,404 a
month, which would make the total loan once paid off cost 337 000.

So in the end, I would nearly pay double the price for the house and it would cost me far more per month than i pay now to rent, but I would then have a small garden and eventually a house rather than an apartment. But I would then be a slave to debt. Is saving up until you have the cash to buy outright perhaps a better plan? Who knows...

bureaucrat said...

1) I eat Payday bars (240 calories) for lunch. Lunch is for whimps. :)

2) Thermostat has been set at 63 for over a year

3) Overtime??? In the Federal Govt.??? The first people out the door at 5pm are the managers!

4) Just how many nail salons and Jimmie Johns does one country need?

5) I would agree to do things when you are young, except the young have no money, and when you're old enough to have the money, you are too old to run a business. :)

On an energy topic ... crude is stuck at around $50, RBOB gasoline has plateaued at $1.50 for a month, yet the pump prices in Chicago are escalating ( Weird.

Anonymous said...

First of all, we've lived through 50 years of unprecedented properity, and that ain't bad!

Second, we're going through a rough patch, and it will stay rough for a while. And, freedom is no debt!! I still have a mortgage and am not set for 10 years, unless I want to spend my retirement savings a decade and a half too soon. Not an option I'd like to exercise. I am not free. So, I'm still grinding away, always with the nagging fear that my job won't be there tomorrow. We had layoffs today. I'm safe for another quarter. Small comfort.

I'm not pissed off because there is a downturn. I'm pissed off because TPTB rigged the system, and squandered our national wealth for their own personal and partisan benefit. Democrats and Republicans alike are all shills for the big money boys. In many cases they are one and the same. They are still covering for the sons of bitches.

As far as the debt bubble, each of us was acting in his own best interest based on the economic conditions of the times. For 40 years, its been reasonable and profitable to expect prices to rise. We've all been made speculators.

But, our government, who has experts that should (DID) know better, allowed and encouraged economic conditions to persist that indebted us to the world and destroyed our industry in the process.

We have lost much. It will be a long time coming back.

No Regrets,

Coal Guy

Greg T. Jeffers said...


Of course you have to go into debt to buy a home! And to buy your first car, and a few other firsts...

What I was getting at was thrift. Frugality. Industry. ESPECIALLY when you are young.

If, when you are a young man, you work hard AND smart - I have friends that are millionairs from all walks of life - from physicians to guys that went to tech school for plumbing. What they had in common was a 10 year period in their young adulthood where they worked and/or educated themselves to the exclusion of all else.

I have a son who is on the cusp of young adulthood. I tell him to enjoy his youth - but get to work, work hard, work smart, and accumulate resources.

I hate the lecture I get from folks on the web about what they do and how smart they are...

that said:

When I was young I worked my b*lls off and you would have had to pry my wallet open. I am talkiing 21 year old, right out of college, through 32, when my first was born.

That is when you have to get it done. Then, we have accumulated a few sheckels, you gotta avoid stupid temptations to lose or spend it all.

I got a good friend makes 7 figures a year. He calls me last year and asks me if I think its a good idea to buy a home for $2mm that cost $5mm to build. After we talked about, he decided against it, and lcontinues to live in his $700k surrealy nice home.

Now, he has continued to accumulate wealth and will not NEED to do anything, but only what he wants. Anybody, now matter how successful, can get into trouble by spending, gambling, using drugs,etc... you don't have to be young, dumb, and full of c*m.

But you don't get a do over of your youth. That is the time to accumulate wealth AND experience. 35 is a bit late to pick your head up out of a beer glass.

I know you are a young man without children. Now is your moment.

Donal Lang said...

One subject I lecture in international economics:
People in developing countries are moving into the city in droves, so that now one-in-six people worlwide live in squatter camps on the edge of major cities. (See

Governments encourage this because; susbistance farmers make food, but don't pay taxes, don't rely on the government for services, and sell locally but not for export. By encouraging people off the small plots, bigger companies can mechanise the farming and produce export crops, providing taxes for government spending. But for the ex-farmers, they are now wage slaves; if they don't get cash work today, then they don't eat tomorrow. There is no fallback of family, community, or eating other crops.There is no resilience.

Personally I've always been more focussed on the disposable income; that's the real wealth, the bit you have control over. You can increase your disposable income by earning more, or by spending less.

But first you may have to be willing to compromise with your ego!

oOOo said...

Thanks for the reply. I went into debt in University, althought not as badly as many as I worked a little while at uni and a lot during the holidays. Also after University I got a graduate loan through desperation, as when I started out I didnt get paid enough to cover my student loans payments, overdraft interest, shared rent, bills etc etc. Money would run out halfway through the month. Every month. It was a fairly miserable time, working my ass off for little pay to get experience, then freelancing at night until the early hours, then a few hours more learning each night to get better and better. Eventually It paid off as I got a decent full time job in london and then in Italy, where even thought I got paid no more money initially, I could live for 1/4 the price of London and have a great quality of life. It took 6 years to pay off all debts plus the interest. during that time I saved until i could afford a cheap shit car as I didnt want to get further into debt. This was half a decade ago and after more years of work it feels great to still be debt free (Since then i tried to only ever buy what was absolutely neccesary and what I could afford) and to have managed to save some money (althought it would be more If I had made some better trading and girlfriend choices.) I just remember the weight of that debt, it felt so bad that I am super hesitant to get into that situation again, even for a house. And especially in light of peak oil and all it means.

Greg T. Jeffers said...

Hi Donal:

I think its ALL about compromising your ego.

oOOo: "Bad girlfriend choices"... I could go on forever on that one... I have been through a divorce - what a cluster f**k that is...

It is a struggle for people that must go into debt to become educated - an even worse struggle if they choose to go into debt for an education that does not pay. That is a personal choice, but I told my son that I will pay for his education provided that he can show me that what he studies will be able to provide a living so that he in turn can provide for his family - engineering, science, medicine, law - all OK with me. Art appreciation? Not so much.

When I was young I live in New York City. TImes were good on Wall Street and Madison Ave. and 7th Ave and Broadway, etc... the party never ended.

I was in bed by 10pm most evenings, and at work at the crack of dawn. In retrospect, the "sacrifice" has paid off for me in spades. I have my health, enough "wealth" (I am a very rich poor man, or a very poor rich man - depending on how you look at it), and some "youth" left to enjoy it.

I write this blog too often for middle aged guys with money. I should write more for young men - that is the critical time.

Playboys rarely get ahead - unless they are in the entertainment business - and usually don't live long lives.

I wish for you every success.

oOOo said...

Thanks. The decisions you make when you are young obviously have a long lasting impact. But your knowledge and experience at a young age do not normally match up with the importance of the decisions you make. I have mainly learnt through trial and error, and eventually a fiendish desire and quest for knowledge to learn more to prevent further mistakes and understand the world better.

The only career advice I was given was to go into the city, stockbroking etc. That i should study economics, which used to bore me to death in school, but which I now have a morbid fascination for.
After a brief episode of work experience in a stockbrokers, I was profoundly depressed, thinking if this is meant to be the dream job, I would rather wake up to a new reality. If I had gone into it, I would for sure be richer in terms of money, but also significanly less happy and healthy I imagine.

I work as a website/product/industrial/clothing/3d/graphic/video designer/strategist/coder/animator. Both as a fulltime job, and I have my own company on the side. It's a fun, demanding (try to hold on to an ego when you have your ideas torn apart on the daily), rewarding job most of the time with a lot of variety and it pays pretty well. Somewhat surprisingly, even better than my doctor fiancee. Compared to finance jobs, the pay is realtively modest though.

Greg T. Jeffers said...


Guys from working class backgrounds really do not have the luxury of not working at the highest paying job because they don't like it.

Nothing is forever. My personal feeling is that I would be willing to stand on my head in sh*t, shoveling said shit against the tide for up to 10 years - if it would give me the resources to be free. No, I would not sign up for a life of sh*t shoveling - we all make our trades. I was sick of being broke and I was going to end it - one way or another. I know many, many, many guys that came and went - they just couldn't take the mind numbing bullsh*t of it all. Most of them have not gotten anywhere.

You have to go with what works for you. And you, and only you, have to live with the consequences.

The exponential function also applies to the compounding effect of your experience. Guys that get to work younger get smarter, and tougher, younger.

The rest is just keeping you overhead low.

Anonymous said...

There are some very solid points here from each and every one of you. Well said gents, well said.

oOOo said...

It's an interesting way to look at things, to borrow 10 years from your life doing something you really dislike to get setup better for the rest.
But there is still the option of choosing not to do this. Perhaps it sounds cliché, but since tomorrow is not promised, you have to make the most of each moment. The freedom we all have is to choose the path best for us, regardless of background and this path is not always the one which has the greatest monetary reward.

My brothers girlfriend for example comes from a poor family and she made the decision to be a teacher which doesn't pay well in money, but pays well in terms of her feeling she is making a contribution to society, teaching people and the personal fulfillment which that provides.

I started this game at way less than zero with nothing to fall back on and whilst along the way I did many many jobs I disliked to pay the bills, I made a decision to find a career which pays well but which I could also enjoy, rather than the one which purely provided the most money.

Reading 'death of a salesman', 'Jonathan Livingston Seagull' and 'Siddhartha' at a young age had a pretty big impact on me, as did family breakup and a boom bust dad.

Greg T. Jeffers said...


I guess "borrowing 10 years from your life" is one way of looking at it...

but not from my vantage point...

my option was to become a boiler mechanic in the Bronx like my father, or work at the local G.M. plant punching holes in donuts on some assembly line, or go to Wall Street and grind it out.

Given the options, I choose not to work in shitty neighborhoods for little pay, or a G.M. assembly line for no pay - to me, that would have been an ignominious fate far worse than death. If my only other option at the time was a life of crime I would have choose that instead.

I think it depends on your starting point. If you are deep down at the lower end of working class/more like poor (a working man's wages and 9 mouth's to feed don't add up to working class) it is either the mafia, drug dealing, or a sales job. No one seemed to need me in the executive ranks.

How anyone from a similar background handles their circumstances is up to them - and how much they want to exit said background.

I can tell you that personally, I hated living next to a gas station, at the end of the line, in a shit neighborhood, and I wanted to be able to provide a better circumstance for my brood. That was my motivation and my life long agenda. Doesn't make it right or wrong - it is what it is.

Greg T. Jeffers said...


We should have been born rich instead of so damned good looking...

You are allowed to change your mind, career... everything.

I had a lot of fun while I was a young man. I hop you do to.

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