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The Almighty Buck
The NYT Magazine this week focuses on a topic near and dear to its heart: money. Stories about the dotcom boom, priorities, the cult of Wall Street. Some of the stories are interesting, as with this comparison of how far a dollar goes depending on where you live. Some are disturbing, like this one on CEO salaries. And several are (unintentionally) humorous, like this one about bankrupt Etoys and this one, by a rich writer who believes everyone else is rich too.
...that this is done by the New York Times, who requires you to register so they can sell your personal info (or at least demographic information) for more "almighty bucks."
An unemployed person gets a WEEKLY manicure and pedicure? Excuse me... weekly!?
And that gives her an hour a week when she can feel normal? NORMAL?
You are far from normal lady!
It's true.
Fact is, we spend more than most people in the world make. We're a consumptionist society. We invented disposable plates and cups and diapers and everything else. Sake of convienience, isn't it?
I agree with his article where it describes the 'poor' of the US as wanting things they can't afford. Poor here is defined as "earning between $17,000 and $34,000 a year."
I don't make much more than that, and I've got all of these computers, and an XBox, and a Dreamcast, and...well, not to get too far into it, but I've bought a lot of crap I don't need, but I want. I have nobody but myself to blame.
But don't hide under a rock and take this article as a joke. I've started to think about what the hell I'm spending all of this money on long before I read the article.
Next time you buy 3 DVD's at Best Buy, take a step back. Do yourself a favor.
username: slashdoted
password: slashdot
Rinse, lather, repeat if needed.
Lawyers, MBA's, RIAA? A jedi fears not these things!
There's the same happy : unhappy ratio of rich and poor people. Yet I swear, no matter how many times it hasn't happened, if I had a little more cash, life would be a lot better.
All the major religions, all those philosophers mentioned in the last article seem to say "the key to true happiness is inside you," but I feel like the Greatest American Hero: where's the manual?
c-hack.com |
It sounds to me like he thinks every American is rich. He has a point.
How many color televisions and refrigerators are owned by the typical poor person in America? How many color televisions and refrigerators are owned by the typical Bangledeshi?
How many times per week does the typical poor American get to eat clean food, versus his Third World counterpart?
Health care may not be free, but *no* injured person is turned away from an emergency room.
Poor people today don't have to worry about many problems that would have killed even rich people 75 years ago, so I think the author is justified in regarding virtually all Americans as rich.
Hrm, the article doesn't mention two interesting part of the story. His "Stay Incentive" was stolen from money which was promised to the employees.
I used to work for eToys.
eToys layed off a bunch of nonesential staff in January 2001. The survivors of us were promised, if we worked until March 2001, our regular pay plus a retention bonus equal to 2 months of pay (some were offered more). This money was "supposedly" in a specially marked fund that was protected from the creditors.
But when March 2001 rolled around, eToys dropped the bombshell: The bonus money is gone. It wasn't protected after all.
But Toby still got his retention bonus. Guess who payed for it? That's right, we employees.
I've bought a lot of crap I don't need, but I want
Worse than that is when you buy stuff you don't need but really want, then two days later you realise you don't have much of a use for it, and don't really want it anymore. Anyone else just go out and buy something just cause it feels good to? What's going on? You know, I've been unemployed for a while, so I don't buy much of anything other than groceries (well, and beer) these days, and to tell you the truth, I don't really miss it. Maybe this is what the **AAs are really afraid of? Not that piracy will deprive them of their revenues, but that it'll get people used to not buying stuff, and then they'll really be up shit creek.
c-hack.com |
Another interesting part of the story.
eToys had one subsidiary, Babycenter [babycenter.com], which they bought in 1999 for like $90 million in eToys stock. I still know many Babycenter employees.
Here are some stats:
- Number of employees in December, 2000:
eToys: over 1000, not including babycenter
babycenter: 90
- Number of layoffs by Feb 2001:
eToys: 700
Babycenter: 20
- Revenue in 2000 (not profit):
eToys: $70 million
Babycenter: $20 million (consider that they had
10% of the staffing)
- Expenses in 2000:
eToys: $100 million
Babycenter: $20 million
- Typical expenses in the FALL of 2000 (Which
is when they were considering bankruptcy):
eToys: Brand new shiney Pentium III with a flat
screen monitor for most employees
- Brand new shiny headquarters in West Los Angeles, with a $100 million 10 year lease
Babycenter: The poor schmucks are still using
PII/366 & Sun Ultra5 machines
- converted warehouse in SOMA, San Francisco
- Amount that the entity sold for in spring 2001
eToys: $7 million to KBToys
Babycenter: $12 million to Johnson & Johnson
- Number of employees who still work for the company:
eToys: 10 or so
Babycenter: 70 (almost everyone)
- Number of days that the website has been down
due to the bankruptcy
eToys: 90 - March - May
Babycenter: Zero
- Number of managers who came in from the parent company to replace existing managers:
eToys: almost all of them
Babycenter: 1 , the finance controler
Not to deny that these people are poor, but don't fall into the common trap of believing that a dollar number represents some objective thing.
A dollar isn't a dollar. A dollar is what you can *buy* with it.
When I lived in a Mexican fishing village I rented a house for $4/mo.
A lobster was less than a dime, as was a bushel basket of tomatoes or a 10 lb. watermelon.
Industrially manufactured goods are beyond the reach of many people, ( so they still have active communities instead of watching television), but the necessities of life are always inline with local incomes.
It's called the free market. Prices of locally produced items are local *variables,* and baring disaster and famine, food and shelter is often *cheaper,* ( in the real buying power), than it is in more "developed" countries.
I have never lived among more sociable and *happier* people than those with a self-sustaining local economy. True poverty is a lack of food, clothing, shelter and community, *not* lack of money.
KFG
Therefore, good CEOs are worth a lot of money.
Why is this so difficult for people to comprehend? Why do they continually whine about how much CEOs are paid. They are paid that because they are scarce. In general, they're the best business men in the world. Why is it shocking they're paid so much?
I completely agree, yet we're now at the point where it's exactly the opposite: In Canada we've had to continually increase immigration to keep the population from contracting, as the "native" birth rate is far below the necessary 2.2 or so. Many advanced European countries, such as Italy, are much further along this curve and have a serious population implosion in the near future. It's a bizarre irony that the world has taken a "reverse Darwinism" : Those least capable of supporting offspring are having them by the dozen, and those theoretically most capable aren't. I fear for the genetic future of the planet.
Sidenote: Personally I think the premise of population contraction is a fantastic one -> Contrary to any "Straight from China/India/Some other obscenely overpopulated area of Earth" BS about North America or Europe being "underpopulated", it seems to me that already we're grossly overpopulated, and we continue it based on outdated, unsustainable notions of drawing graphs of GDP growth, home value growth, etc, all of which is supported only by a perpetually increasing population, yet at the same time the net wealth of all of us is decreasing (soon we'll all have no National parks, no rural areas, and we'll all be just so grateful that the GDP rate increased 4.7%, watching the screen at the end of our tiny habitat-cube
Just to put a response on this from someone you're talking about... :)
:) Nobody in the house drinks, smokes, or does drugs other than caffeine and chocolate. I've always said I never did those other things because I couldn't afford them :) Yes, we have two cars; one is my economy car for shuttling to and from work, and the other is the grocery getter / kid hauler. Both cars are fully paid for, and over 10 years old.
:) (She's the one with the business degree, after all; I'm just a geek.) She says things are kind of tight, but they've always been that way; we still manage to get by somehow. We don't have the latest and greatest toys (despite my geeky wants and urges), but we're still a happy, "average" American family. I don't see that we're particularly well off, but we're holding our own. The trick to the financials of all this is -
:) Sifting through to edit out some of the more personal information...
:)
I live in Taco's neck of the woods - cost of living is a bit on the high end here, IMHO - and I'm working one job, while my wife stays home to take care of our two kids. We're paying the bank for the privelage of living under a single roof, and that privelage takes up about 50% of my monthly takehome pay. The only reason we could afford the house was thanks to an inheritance, which barely covered the down payment.
Yes, we have two color tvs and two vcrs, but that's only because we spent good money on the first ones, and they still work well enough to be used in the basement on occasion. There's also an original Nintendo connected to that tv in the basement that we bought used years ago - no Playstations, no XBoxen. No Game Boys in the house, either. I splurged last month and ordered one of those 76-games-in-one game systems that were mentioned in an article here recently, and it's the best thing in the world as far as the kids are concerned. The dvd player that we just got last Christmas is a no-name Best Buy special, and we don't own any dvds (yet). The newest computer that was purchased was a used Bondi blue iMac, and that was two years ago. There's also the G3 that I bought five years ago (wow, that thing's getting old...) with a G4 upgrade that I put in it last year.
We don't go out to the movies, and if we're lucky, we go out to eat once a month. It's too expensive for these things, and the kids are too much hassle to take out in public sometimes
According to that article, we're a "below average" household, based strictly on the income numbers and education levels. Strangely enough, our household basically is the 50s/60s standard model - I come home from a day at work, the kids run up to greet me at the door, and the wife is getting dinner ready after her long day of cleaning / laundry / kid corraling. She does the bookkeeping too - I just bring home the money
wait for it -
live WITHIN your means.
Just like they did back in the "good old days" before all the PDAs and TiVos and cell phones (oh yeah, one Tracfone in the household - $20 every two months for a phone I barely use for thirty minutes a month), you only spend what's in the bank, or what you KNOW is going to be in the bank come the next paycheck. There's only been a few times that our total credit card debt has been over $1500 at the end of a month, which from what I understand is WAY below average. This is something that people seem to have forgotten - the people that give you those pieces of plastic want their money back someday, and someday SOON.
Like that NYTimes article says, everyone acts like their financial salvation is coming just over the next hill... but the odds are REALLY good that what's over the next hill is just the next paycheck. If you live life expecting that next check, you won't be surprised - or at least, you won't be disappointed when the monthly bills show up. If you learn to take care of what you have, and make do with what you have, you don't have to be throwing tons of money out the window every month for the next "newest and bestest". Regular oil changes are a lot cheaper than a new car every few years because the engine blew up after you kept treating it like crap.
We may not be financially compared to other households in this country, but we're financially stable, and we're overflowing with intangibles that a happy family provides.
/me checks the preview... wow, I was in a mood to write tonight, wasn't I?
And after this lengthy monologue about money and happiness and making do, I leave you with a link to a site where you could win new geek toys, and put some affiliate money in my pocket in the process so I can buy more toys
-----
Apple hardware still too expensive for you? How about a raffle ticket?
Come to the University of Mars! Classes starting soon!
Shit, dude, it doesn't matter how much you have, you'll always be wanting a little more. Psychological studies have shown that people's happiness levels is relatively set, and while major events may elevate or depress their overall happiness (such as winning the lottery for happiness or death of a loved one for misery), before too long people are back to their previous happiness levels. So, even if you think you'd be damned happy and things would be great if you won the lottery and became a millionaire, that happiness would be relatively short-lived, I'm afraid. Essentially, you'd find other shit to bitch about.
I could not justify my existence if I were a turkey farmer. Would I terminate myself? Undoubtably, yes.
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From the article:
Americans in 2000 spent less than they did 10 years earlier on steaks, martinis, cigars, jewelry, watches, furniture, toys and sound equipment. They spent less on entertainment and more on education, housing, transportation and computers.
Okay, steaks corresponds with the mentioned trend about people eating more fresh vegetables. That would seem to correlate with trying to eat healthier. Martinis? Okay, perhaps people are drinking more malt beverages?
As for the education, housing, transportation, if you look, housing prices, education prices and transporation prices have all been going up. That has nothing to do with any earnest desire by Americans to do something wholesome with their money. It's indicative of the fact that we are running our of spaces to expand to.
Computers? 10 years ago was 1992. Computers were hardly ubiquitous then and the top of the line was a 486. Now computers have become a much more essential part of every home and the internet has driven a lot of buying. To suggest that somehow we are doing something good because we buy an Athlon to surf pr0n is a crock.
Americans spent 10 percent less on food in general (though baby boomers spent 15 percent more on fresh vegetables). Americans spent 14 percent less on clothing, the largest decline in any category, though they did spend 12 percent more on shoes.
Food in general? Okay, lets get back to that steak. How much does it cost you for the ingredients for that steak vs a salad? Furthermore, the price of food, realtive to the value of a dollar has been decreasing. The reason clothing prices are going down is because of globalization and cheap international production of textiles. That has nothing to do with buying less clothes.
So, whatever, if you believe America has escaped some trend of history. If you think that this will go on forever, I just have three words for you:
THE NEW ECONOMY
Yup, remember that crock. Oh, record employment, growing wealth, with no looking back. The old rules are done. YEAH RIGHT. This country has done well over the years, granted but we've got a lot of bumps in the road to deal with ahead. A massive generation of retirees. The increasing gap between rich and poor. We haven't solved some magical formula folks, we've been blessed by history and it may continue that way for a while, but as any dot com CEO will tell you, all good things must come to an end.
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We as Americans are vaguely aware that we are better off that most people in the world. I thought I 'got it' before I travelled a bit. I know I could have been the one who posted how hard it is to raise a family in New York.
No.
I tell you truly: a homeless person anywhere in the US is far better off than the average African. We are so steeped in wealth, what one person I met called "an embarrassment of riches", we have no perspective.
We truly do not understand what poor means. Not a clue. The average american roughing it in the great outdoors brings more stuff in his backpack than the average african ever owns.
No running water. No electricity (ha!). No roof. No car. No bus. No sidewalks or pavement. No shoes. Nothing.
Disease is rampant; 80% of the population is HIV positive in Malawi. The average age is 15.
If the world is getting you down, take a trip to Malawi. It will change your perspective.
But there was a silly remark in one of the articles: "American workers are still the most productive on earth, two-thirds more productive than our counterparts in Great Britain, for example."
Why would the writer want to compare the US to the UK?
This is where your first remark comes in again, the Brits have a relatively high per capita income but their Purschasing Power is almost the lowest in Europe, only the Greek and Portugeese are worse off!
But it must be said, at least Britain overtook them in the last 15 years.
And indeed, true poverty is when your family goes hungry after a days work.
Something not uncommon in Great Britain but virtually unheard of in Greece and Portugal.
Just do a search on the net about the number of British children going to school hungry. That's why it's silly to compare the US and the UK.
"The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
A few weekends ago, a friend recommended Rich Dad, Poor Dad to me. No, it's not an investment book. Rather, it's an interesting look into the ways that those of different economic levels teach their kids what money is, and how to earn money.
It's pretty good so far. Nothing mind-blowing, but there's certainly some logical thought in there that had never occurred to me.
I mention the book, though, because he freely admits that your typical "employment" lifestyle that most Americans have isn't enough to make you "rich", and is hardly enough to help you retire comfortably. However, he also realises people have to start out somewhere. You can't invest if you have zero. Thus, fiscal responsibility is entirely necessary, especially in the beginning, and something that most of us (yes, you, Slashdot reader) don't have.
I know and/or have known way too many people who make way too much more money than me to be living paycheck-to-paycheck like they do. Granted, I make an okay salary, but I've known tonnes of people who've made six-figures USD and can't control their finances. It's asanine, but it's not an anomaly -- US News and World Report recently that some enormous percentage of Americans had saved less than $50,000 for retirement.
The author of that NYT article was right, to some degree. Americans are fairly rich. We also, however, spend a lot of money on absurd things. The author of Rich Dad, Poor Dad is right, too: Americans don't know where to put their money, spending it on liabilities, not assets, and have a pitifully wrong understanding of it.