Category Archives: Money Matters

Alienation of Affection

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Try to keep up. North Carolina is one of seven states that allows a married person whose marriage has ended to sue another person for what’s referred to as “destroyed affection”. I learned this when a friend in NC informed me through a newspaper link that a woman I used to work with was recently sued for allegedly breaking up another woman’s marriage. Then I heard the story on the BBC via NPR.

The woman who brought the suit was separated from her attorney husband who apparently had an affair with my acquaintance. He was one of the college’s attorneys and was co-writing a book with my acquaintance who was the Dean of Student Life. Makes me wonder if Tiger has a bunch of books coming out shortly, but I digress. The victim of “destroyed affection” argued she had a “good long marriage” until younger co-author hussy “came along and maliciously destroyed it”.

An interesting twist, in bringing a suit like this, you don’t have to show that anyone had sex with anyone else, just that he or she (joke alert—I’m betting it’s almost always “she” because we know men are much more respectful of the marital covenant, I mean no one was hitting on Elin Woods) destroyed the affection in the marriage.

Apparently, people bring about 200 cases a year of “alienated affection” and the most anyone has won is something like $1.9m. The woman in this case won $9m, thus the media spotlight. I’m guessing my acquaintance, who is now Dean of Student Life at another college in another state, makes $80-90k/a year, so good luck collecting.

A couple of implications of this bizarre legal drama spring to mind. Penelope Cruz, if you’re reading this, you should know my wife isn’t a particularly litigious person, but hey you never know. Just to play it safe, maybe you should stop making movies for awhile. And to the older guy at church, yeah you know who you are buddy, who keeps bugging the gal pal to go on a “bike ride”, don’t think I don’t know what that’s code for. In fact, to the gaggle of guys at the “Y” who constantly tweak their swim schedules to overlap with the person I’ve enjoyed a “good long marriage” with, consider yourself forewarned. Alienate her affection and I WILL go legal shock and awe on all of yous.

The Private School Myth

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Consider this excerpt from a Jonathan Mahler NYT article about Tiger’s return to golf:

On six separate occasions, he (Jay Williamson, 43) has finished the season without a strong-enough record to keep his eligibility for the PGA Tour and been forced to earn it back at the tour’s grueling 108-hole qualifying tournament, known as Q-School. Williamson has never won a PGA Tour event. Nevertheless, thanks to golf’s soaring purses during the Woods era, he has managed to earn more than $5.5 million during his 15-year career. “I certainly don’t live like a king,” he said, “but I do have three kids in private school, and that’s probably a direct result of Tiger.”

Williamson’s quote is symbolic of the American public’s belief that private schools are inherently superior to public ones. As an undergrad, I worked part-time for two years in a public elementary, taught for four years in public high schools in Los Angeles, one year at a private high school in Ethiopia, and attended both public and private universities. As a teacher educator, I visit schools all the time, mostly public ones. If I’m an expert about anything, it’s secondary education. My daughters have spent 30% of their schooling in privates and 70% in publics.

It’s easy to understand why people subscribe to the private school myth, we’re conditioned to believe “you get what you pay for”. But truth be told, that’s not always true and private schools are not inherently superior to public ones. There are good, bad, and mediocre public and private schools. Good publics are better than mediocre privates. Based on my experience, you’ll find a larger proportion of  truly outstanding teachers in publics. There are  lots of solid private school teachers too, but they have the wind at their back in the form of smaller classes and often required, built-in parent/family involvement.

In fifth grade (middle schools in Olympia, WA are 6th-8th grade), daughter one made her first independent decision of consequence when she decided she wanted to attend a local private independent school for the “academically talented”. Me, “But all your friends are going to Wash.” Her, “I’ll make new ones.”

There were a few minor and one major benefit of her private experience. Among the minor benefits, she was given more writing assignments than her public peers and received more detailed feedback on her compositions. The school also did a nice job using small group projects that engaged the students. The major benefit was her five or six closest female friends all cared equally as much about doing well in school. As a result, there was serious positive academic momentum. They spent a lot of time in the evening completing projects over the phone at the exact time a lot of middle school girls are dumbing themselves down in the hope of appearing more attractive.

The downside of her experience, and many private school students’ experiences, was the homogenous nature of the student body. Everyone was high achieving, most students were upper middle class and white or Asian-American. As adults we know that our success and happiness depend as much or more from our people smarts than our book smarts. When will my daughter and her friends learn to interact thoughtfully with young people different than themselves? Isn’t interpersonal intelligence part and parcel of being well educated?

This brings to mind a related myth, that public schools are inherently more diverse than private. While probably true in the aggregate, with tracking, or homogenous ability grouping, we end up with schools-within-schools. In other words, there are multiple Olympia High Schools, one that my daughter and her friends attend that consists largely of Advanced Placement courses and another for everyone else. Some public high schools have three or more schools-within-schools.

The public-private school water is far muddier than most people realize.

Dearest Daughters

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Dearest Daughters,

Wondering what all the healthcare hoopla has been about lately? Long story short, Congress just passed a law that will result in significant changes to the ways Americans pay for health insurance, pay for healthcare, and receive healthcare. Many of the changes go into effect in between 2014 and 2018.

Congress has been trying to improve our health care system—which represents one-sixth of our economy—for fifty years. The vast majority of Congressional Democrats voted for the bill and every single Republican voted against it. Democrats are celebrating and Republicans are vowing to repeal the law and win more seats in November’s election and regain majorities in the House and Senate.

Almost every Democrat supported the bill and every Republican did oppose it because they define “fairness” very differently. Their different ways of thinking relates to the “what’s fair” discussion we had a week ago about high school sports. Is it fair for schools to cut kids whose families can’t afford to pay for their children to play club volleyball, soccer, or baseball year-round? Similarly is it fair that people who make little money pay between 0-15% of their income in taxes and people who make large bank pay 28-35% or more?

Most Democrats would say no it’s not fair to cut mostly “non-clubbers” and yes it is fair to have a progressive tax system where the more you make the larger the percentage you pay in taxes. Otherwise, the gap between the “haves” and “have nots,” whether high school athletes or ordinary citizens, will widen so much that the American ideal of equal opportunity will be imperiled, and eventually, our quality of life will be compromised.

Most Republicans would contend that the only fair approach is to cut completely independent of “club status” and institute a “flat tax” so that everyone, regardless of their income, pays 18% for instance. More specifically, Republicans would say it’s patently unfair to penalize kids whose parents have worked hard, saved their money, and want to spend it to help their kids excel at sports? And with respect to taxes, it’s unfair to penalize people who have worked hard in school, excelled in the job market, and earn large bank.

In response many Ds would say people who excel in high school or life do so because of subtle and not so subtle advantages that build from birth, through school, and into adulthood. Put differently, privilege reproduces itself. More simply, well-educated, high earning families tend to raise kids who do well in school and are economically successful afterwards.

In response many Rs would argue that inequities are inevitable, equal opportunity is an unrealistic ideal, and the income gap should motivate poorer people to work harder.

Picture a see-saw with the word “EQUITY” painted in big block letters on the left-side and “EXCELLENCE” on the right. People who most value equity believe people who have not been given equal opportunities in life deserve a little extra help to make the high school team, to balance their family budgets, or to pay for health care. People who most value excellence believe “extra help” makes disadvantaged people dependent upon government assistance, fosters laziness, and results in mediocre high school teams and healthcare systems.

Most Ds in Congress sit squarely on the equity side, most Rs squarely on the excellence side. Many citizens would split the difference either sitting towards “equity” or towards “excellence”. Others who value both equally, would sit right in the middle.

Back to the new law. I have to confess, despite my education, I’ve been perplexed by many of the healthcare debate’s details. The media, like cruddy teachers everywhere, wrongly assumed most everyone was “in the know”. Add in Democrats and Republicans shouting past one another for the cameras and I’m sure I wasn’t alone in my confusion.

I’ve been reading about it since its passage and will try to explain why Ds are rejoicing and Rs are threatening to repeal it. Think about America as a pyramid with 5% of very high earners at the top ($200,000-250,000/year+), 70% in the middle, and 25% of poor people at the bottom (families of four earning $33,000 and less/year). In all likelihood, the law will have the least impact on the middle 70%. In the simplest terms possible, the top 5% will pay more in taxes so that the bulk of the bottom 25% can receive insurance often for the first time and thereby have a tad more economic security.

So back to the see-saw. To R’s the bill focuses far too exclusively on equity at the expense of excellence and fairness for the well-to-do. To D’s the bill focuses on equity in the interest of fairness.

What do you think, help the poorest among us by requiring well-to-do people pay more in taxes? What’s fair? What’s in our best interest?

Peace Out,

Dad

Humorous

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Three things that made me laugh recently.

Everyone needs a mentor don’t you think? He doesn’t know it yet, and it doesn’t matter that his family is younger than mine, but Phil Dunphy of Modern Family is mine. Great show. I’ve been having amazing success with Phil’s “peer-enting” approach to fatherhood. In this short clip, my mentor explains how to “keep it real” and “take it to the next level” or vice-versa, not sure yet.

Even money I’m the only person who thinks this is funny. Read Tyler Cowen’s short blog post titled “Why do people ask questions at public events?” Funniest sentence, “Anecdotally, I have found that men wearing suspenders are most likely to ask longish, rambling questions.” If you watch Booknotes on C-Span like me you read that sentence and said to yourself, “Yeah, no kidding!” You can picture loquacious suspender guy in vivid detail, white hair, spare tire, open windbreaker, prone to conspiracy theories. So why is the suspender-set so loquacious? Funny!

And my next car is funny.

“At full gallop, the concept can theoretically reach 62 mph in 3.2 seconds and nip 198 mph on the high end.” Funniest thing I’ve read in a long time. As a bonus, “Porsche says it can also achieve 78 miles per gallon and emit just 70 grams of CO2 per kilometer.” On the “To Buy” list. I will laugh at Lance in his highway patrol car.

Winning Personal Finance 2

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I’ve been successful for several reasons: 1) most importantly, my parents’ work ethic, saving habits, and frugality have been deeply imprinted in me; 2) second most important, I chose to marry someone who wants to live a similar lifestyle as me; 3) I’ve educated myself reading and studying lots of material; 4) I found Vanguard early on which has saved me a lot in investing costs; 5) I’ve come to enjoy managing money so I set aside a few hours every week to continue learning and make decisions; and 6) I almost always avoid impulse purchases.

What might one and two mean for you? When it comes to family history and partner, I’m a personal finance +/+. The gal pal and I have probably had as many financial arguments as the next couple, but they’ve ebbed in number and intensity over time, and ultimately, our personal financial values are very similar. What if you’re a personal finance -/+ or the dreaded -/-? While it’s impossible to completely undo a “losing personal finance” family history, financial counselors can help minimize the damage and your time and resources are probably best spent working with them on minimizing the effects of negative role modeling before turning to asset allocation, minimizing taxes, and the like. Similarly, if your partner and you aren’t in sync, financial/couples counseling is probably more important than technical financial advising. Proactively, the more premarital counseling focused on each person’s financial history, values, and goals, the better.

What about reasons three, four, and five? How much time do you set aside each week to educate yourself about saving, investing, minimizing taxes, and related personal finance topics, not counting paying bills and balancing your check book? Put differently, how much time do you spend thinking about the forest that is you or your family’s financial well-being? My guess is, on a weekly basis, the average person spends very little time thinking about where they’ve been, where they are, and how to reduce expenses. Quiz. What was your net worth, assets minus debits, on 12/31/09? Will you recalculate it at the end of this month and then every quarter? If my assumption is right, is it any surprise that so many people are unsatisfied with their personal financial situation?

Reason six leads to tip five or experiment one, don’t buy anything that hasn’t been on your “To Buy” list for at least a week. Personal example. Three plus years ago I bought eight pairs of $120 running shoes for $60 a piece. Running shoe companies “update” their shoes regularly, every year or so. As far as I can tell, “updating” shoes means “we changed the colors”. If you’re savvy, you can pick up the “old” model at half price. When the big box of eight shoes arrived, it blew the daughters away. “Dad, you saved $480!” “Tru dat.” Fast forward, I’m halfway (250 miles) through pair eight so I’ve started to shop for a similar deal. No luck until last week. I found my Mizuno Wave Creations, model 10, for $65. Model 11, $135. Only two sizes were available, one was mine. Darn if the website would only let me buy two pairs, so I called them. They said they’d investigate and get back to me. Long story short, they found a third pair and all three are in transit. Normal cost for three pairs at $135 and 8.5% taxes, $439.42. After thanking the salesperson I said, “I saw something on-line about a Costco or Triple A discount.” “Yes, what’s your Triple A number?” Cost went from $201.50 ($6.00 shipping) to $181.50. Let’s see you do that on your fancy pants iPhone with the barcode application.

Now my $9,000 loss is a mere $8,742.08.

Winning Personal Finance 1

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Everyone is hocking financial advice so how does one decide whose to follow? For example, why on earth should anyone pay any attention to the personal financial advice I offer below? What makes one advisor more credible than another, credentials, their popularity, their marketing savvy, something else? Credentials are nice in that they create a floor with respect to technical knowledge, but they don’t tell you much about the person’s ethics, integrity, or track record. Ultimately all credentials tell you is they succeeded in passing exams.

If I was looking for a financial advisor I’d look for someone that managed their own money well and emphasized saving, investing simply, and had other values that jived with my own. But how do you know if someone manages their own money well when we’re loathe to talk about our personal finances?

Tip one. Ask anyone wanting to manage your money to prove that they’ve managed theirs well. That will probably reduce the pool from which to choose in at least half. Take me for example, I have managed my family’s money well, but for privacy reasons, I won’t provide details except to say that for every ten financial decisions I make, I tend to make seven or eight good ones. Were I in the biz, I would completely understand if that lack of specificity caused potential clients to walk away.

Tip two. Ask any potential financial advisor about some of the mistakes he or she has made and what they learned from them. Last year I made a $9,000 mistake. I repeat, last year I made a $9,000 mistake. It was a brutal, self-inflicted wound that took time to shake. My goal is not to be perfect, but to consistently make more good decisions than bad. Look for a humble advisor who acknowledges complexity and doesn’t over promise. That will probably reduce the pool of potential advisors by at least another half.

Tip three. Even if you find a financial advisor that meets all of those criteria, don’t decide to work with him/her without first looking at yourself in a mirror and repeating several times, “No one will ever care about my financial well-being as much as me.”

Tip four. Never accept any financial advice passively. Instead educate yourself and recognize that no one will ever care about your personal financial well-being as much as you. More specifically, become your own financial advisor. That’s the best financial advice I’ll ever offer. Become your own financial advisor.

Well, the best advice until Part Two.

Doesn’t Compute

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In an email I recently received, my father-in-law asked me what I thought of Tiger’s performance. I’m guessing his use of the word “performance” as opposed to “statement” means he wasn’t buying what Tiger was selling.

I thought Tiger was sincere, but who knows, talk is cheap, and as he acknowledged, only time will tell. The question of whether he was sincere is not the most interesting one, nor is the question of what he does or doesn’t owe the public, nor the related one of why didn’t he allow questions.

For me there’s one interesting, actually troubling aspect of the whole Tiger melodrama, and one interesting aspect of his performance or statement.

The disconcerting aspect is the opportunity costs of our fascination with celebrities. In your circle of friends, what’s the ratio of “Tiger talk” to “education, foreign policy, health care, or economic talk”? We are a People magazine people and the quality of our democracy suffers as a result.

The interesting aspect of his statement was how pained he appeared to be, how unhappy I’m guessing he is, and his paragraph on Buddhism. We are a materialistic people. Here’s a guy that’s close to being the first billionaire athlete living a complete life of luxury and he’s unhappy. How can someone who’s the best in their field, on the way to being the best ever, with hundreds of millions of dollars, private jets, yachts, houses, Escalades, be unhappy?

Doesn’t compute.

Lots of people think if they had El Tigre money and fame they’d be much more happy than they are. To me, the Tiger story, like a lot of Old Testament ones, is a powerful reminder that money and fame are no substitute for a sense of self; a selfless spirituality; honoring your ancestors; a sense that your wife, children, and close friends respect you; a sense that you’re at least as good a person as athlete.

Inspiration

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J.D. Salinger thought he wanted literary fame, but after experiencing it, quickly changed his mind. In an era where so many people crave the media spotlight, and style trumps substance (see Palin, Sarah), I find his intentional turning from notoriety intriguing. Will a movie be made? Is there enough post Catcher in the Rye material? Will his survivors sell him out? If it is made, the best way to honor his life would probably be to not see it.

Salinger was extremely eccentric, but what strikes me as far more interesting is that even after withdrawing post-Catcher he allegedly continued to write for pleasure. There’s a purity, even beauty to that, which inspires me.

Previously, I’ve assailed our increasing loss of privacy, which is another reason I find Salinger intriguing and inspiring. He took control of his public persona instead of passively allowing others to shape it. More accurately, he escaped having a public persona by assiduously avoiding contact with writers, photogs, and other media types. People today don’t seem to realize that there’s no obligation to take the call, speak into the microphone, or appear on screen.

Bill Gates strikes me as a very different type of dude too, and as a result, intrigues and inspires me in equal measure. A lot of well-to-do people do charity in ways that bring attention to themselves. And they give sizable gifts that are in actuality quite small relative to their total net worth. And their gifts, which often pad Ivy League schools’ endowments, don’t seem particularly well thought through. Gates has said he intends to give nearly all of his wealth away and he’s making good on that promise. He’s given something like $30b away so far and a few weeks ago announced that he was giving $10b more than planned for child vaccines in the developing world.

Gates stands out in a world where the richer some people get the tighter grip they maintain over their wealth. He doesn’t seem to seek media attention, but I think he deserves more of it for both the amount and ways in which he’s giving.

My guess is Melinda’s behind the scenes role has been key in Bill’s selfless, socially conscious giving. I’ve seen her on television a few times, but refreshingly, she has a little Salinger in her, content to parent, figure out how best to give away billions, and leave the media to pursue other stories like what Kelly Clarkson thinks of the Taylor Swift controversy.

And then there’s Sade, one of my favorite musical groups/people. Ten years on, finally another album. Turns out, Sade Adu has a little Melinda and Salinger in her. Here’s an excerpt from a Jim Fusilli WSJ article on the new album. “I asked Mr. Hale why the band takes such a long time between albums—it was eight years between ‘Lovers Rock’ in 2000 and its predecessor ‘Love Deluxe.’ ‘This time it was about family,’ he said. ‘Sade is a mother and she wanted to be home with her family. . . . The public side of what she does is what she enjoys the least. She sort of feels she wants to wait until she has something to say.'”

Imagine that, waiting until there’s something to say. After the Catcher hoopla, Salinger respectfully declined to say anything else to the public. The Gates communicate through their exemplary philanthropy irrespective of the media spotlight. And Sade passes on record sales until she has something to say.

Thanks for the inspiration.

Shortcut-mania

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Spent Saturday at the King County Acquatic Center in Federal Way (the “KCAC” if you’re cool) watching the State YMCA Championship swim meet with over four hundred competitors. Fourteen’s swimming career began last August at the start of high school. She decided to swim because she recognized she wasn’t lighting the soccer world on fire, her parents encouraged it, her older sissy was a co-captain, and she thought it would be a good way to make friends.

The season exceeded her expectations in part because she improved a lot, a result of swimming five times a week and improving her technique. Dropping time is fun. Now though she’s an intermediate swimmer and dropping time is considerably harder. And swimming isn’t as fun. Saturday she swam more slowly than she had hoped. There had to be an explanation she thought. “Was the pool meters?”

The great thing about competitive swimming is there’s an almost perfect correlation between one’s training, pre-race prep, and race day performance. Fourteen misinterpreted her results on Saturday. Her conclusion, “I didn’t race very well. Just didn’t have a good day. Maybe I’m not as good as I thought.” The truth of the matter is she hasn’t been training consistently and intensely enough to swim any faster. It doesn’t matter if you have the perfect track on on your iPod pre-race and are completely amped, race day is simply a barometer of the quality of your training. The question is have you put in the time, have you done the work?

Aren’t we all like Fourteen? We often want to see improvement in some aspect of our lives without investing much time and energy in whatever it is? For example, recently I’ve read some extremely successful blogs that generate one hundred plus comments per post. When I do this I don’t think about how much time those bloggers spend on their blogs, I just say to myself, self, “You should have a blog like that.”

One’s blog readership and juice is almost exclusively a barometer of time and energy invested. The blogosphere is a meritocracy.

So the question for Fourteen, me, and maybe you, is how badly do we want to swim fast, have a widely read blog, get out of debt, lose weight, make a relationship work? Fourteen has other priorities like school and I have a day job. She swims and I blog “on the side” or maybe the “side of the side”. Maybe you try to reduce spending, save money, eat more healthily, exercise more consistently, and spend quality time with your partner “on the side”.

The challenge is being honest with ourselves about what’s most important. In the meantime, we shouldn’t be surprised by the meager results of our sporadic, abbreviated labors.

A Passport and Library Card

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This post is only for men under 35, and my brother, “Mother’s Favorite”. If you don’t fall within that demographic, stop reading.

Yes, a happy wife equals a happy life, but what if  you’re single? Singleness is cool, but if you want to marry, get a passport and a library card. Traveling abroad and reading are probably optional. More advice here.