Administrivia

• When I began blogging, I hoped some readers would be moved to comment on occasion. And that overtime, a community of readers would bubble up. I dare say enough time has passed for me to say, not even close. Increasingly, some readers reply via the social media of their choosing. For example, Eldest Daughter wrote an epic reply to my last post on my Facebook page. It was a passionate, insightful, educational response. In my experience, most readers will not comment and those that do will choose different forums. Meaning, the small sum of comments do not equal more than the individual parts.

• Update 1. Education Story of the Year—Jon Kitna Returns to Lincoln High School. Three years ago, when he was hired, Kitna talked about making Lincoln High a state power in five years and a national power in ten. Then a large high school from the land of Friday night lights called. And he said if they’d pay his assistants real money he’d make the move. They said sure, no problem, while retaining their current assistants. Then Kitna said God was calling him to make the move. I’m confused about how the Texas high school is going to pay 10+ assistants’ salaries, not just stipends; and about how Kitna is rationalizing his decision. Kitna’s son, who threw 55 TD passes this year as a junior, is making the move with him. I pity the quarterback in waiting.

• Update 2. Why I Don’t Own a Cell Phone. God called me to buy I bought an iPhone 6+ a few months ago. I dig it, but have to find some other point(s) of distinction to fill the void. Maybe I’ll be the last tat-free guy.

• Shifting gears from the blog to random points of administrivia. Running. In 2014, I kept my 17 year “1,000 miles plus a year” streak alive. Barely. I was injured for three months and so it came down to the wire. Made it by 1%, 1,010 miles.

• Tennis. I love watching the Australian Open. Always so sunny. Male and female tennis players today are so powerful and athletic.The men are serving over 130mph. The greats from the 70’s and 80’s—Connors, McEnroe, Lendl, Borg, etc.—would be lucky to make it to the quarters.

• College bball. If someone gives me a coaching job next year and I win 25 games a year, like Duke University’s Coach K, I’ll also win 1,000 games. . . when I turn 93.

• American professional football. The bandwagon has officially left the station. . . the Good Wife will be rockin’ a Seattle Seahawks t-shirt at the local Catholic middle school this week.

• I support Marshawn Lynch’s right to grab his crotch, ignore the press, and run over the New England Pats next Sunday night.

• Song of the night. . . Troubled Man by John Mellencamp.

• Workout of the weekend. The Sunday pre-dusk 10 mile bike ride with the Good Wife. Didn’t do much for my physical fitness, but did wonders for our relational fitness. #probablymoreimportant

• Movies. Selma, yes. Force Majeure, yes. The Interview, hell no. American Sniper, no thank you.

Thanks for reading, as always.

Peace,

Ron

What People Get Wrong About Financial Literacy

Every spring a friend in North Carolina and I have a NCAA college basketball tournament bet. He takes the teams representing the Atlantic Coast Conference and I get those representing the Pacific-12. If his teams win more games, I send him a t-shirt, if mine win more, I anxiously await my cotton trophy. This year, neither conference did well, but I barely won a stylish long sleeve Guilford College tee*.

We met teaching and playing noon basketball at Guilford College in Greensboro, North Carolina, in the 90s. This year, along with the shirt(s—one for the Good Wife too, and a coffee mug, Christmas in April), he included four copies of recent Guilfordians, the liberal, liberal arts school’s student paper.

Reading them made it seem like time had stood still. Faculty salaries were still the lowest among a large comparison group of peers. Enrollment was down. Faculty morale was flagging. Some well-liked faculty were leaving to the disappointment of students. Students were protesting the administration’s salaries, which had increased markedly, and were at least average among the same comparison group. Tucked in one of the articles was a devastating detail that will make the new president’s job especially difficult. The small Quaker school has $16m in deferred maintenance. They budget $1.8m a year for continuing maintenance, meaning they’re eight years behind. Some students complained about mold in the dorms.

Colleges on the financial edge routinely defer maintenance. “Let’s delay the roof on the science lab another year.” Eventually, the quality of life for students and faculty suffers, and as with mounting credit card debt, the financial challenges multiply and trustees fret they’ll never catch up. Public schools, churches, and city council’s everywhere face the exact same challenge. Can we manage our finite revenue—whether bonds or levees, charitable contributions, or taxes—well enough to maintain our existing buildings, roadways, and parks? If you want to assess the health of a school district, church, or city, find out how much maintenance they have deferred.

We’re fortunate that our Washington State home backs up to beautiful woods that we’ve enjoyed for sixteen years. In the woods there are hiking and running trails, deer, owls, and a path to a nice city park. Now the woods are for sale and three different developers are interested. Many in our community who have organized to save the woods from being turned into another housing development attended the City Council meeting last week to implore the Council to follow through on their own five-year plan for creating more park space.

The organizing committee has done great work thinking creatively about grants and related funding that makes the purchase seem feasible. imgres But the city has been deferring maintenance on our existing parks. One includes a nice boardwalk along the Puget Sound, a walkway so neglected, parts of it will be closed to the public this summer. While sympathetic to our arguments, the city manager and council both regretted that the city can’t afford to purchase and preserve the woods because they’ve deferred far too much maintenance.

It’s human nature to put off saving for future expenses. Just like colleges, school districts, and churches, I do it all the time too. I replace my nicked up bicycle tires after flatting a few times. I get my lawn mower tuned up when it won’t start. I go to the doctor when I’m near death.

I talked to the college senior recently about car ownership. Most twenty-one year olds think exclusively about the purchase price, “If I can just save $5k for that $5k car.” I impressed on her the need for a “cushion” for additional costs like insurance, gas, and regular maintenance including oil changes, the battery, and tires. In an ideal world, she’d also factor in replacement costs, but that’s pie in the sky. Once I broadened her thinking about car ownership, she realized it’s not financially feasible yet.**

Most financial literacy talk is seriously flawed. Everyone overemphasizes technical knowledge. Do you know the “rule of 72”? Do you understand the power of compounding interest? Do you understand asset allocation, mutual funds, investing costs, dollar cost averaging, and taxes impact on your returns?

People think if schools just taught that knowledge all would be well, but it’s not that people don’t know enough about personal finance, it’s that they lack the self-discipline to spend less than they earn. Including legions of college educated people who would pass a personal finance multiple-choice test.

Schools can’t teach young people to defer purchases, to set aside money to adequately maintain and eventually replace possessions, to live within one’s means. The only way to teach anyone the limits of consumerism, to delay gratification, the importance of savings, and how to live within one’s means, is to model it for them over time.

Fortunately, my parents, especially my dad, taught me those habits without ever sitting me down for any sort of money talk. For colleges, churches, cities, and families, “deferred maintenance” means “We’re in the habit of spending more than we have.” Like mounting interest charges, it ties the hands of college administrators, church councils, city councils, and families.

We are extremely fortunate to be able to meet our family’s basic needs each month with some money left over. We can do one of three things with our surplus. 1) Succumb to status anxiety and buy unnecessary luxury items; 2) Keep existential questions about life’s larger purposes at bay through mindless consumerism; or 3) Set some of the surplus aside for anticipated future expenses.

* During graduate school, my friend was a UC Santa Cruz hippie. The UC Santa Cruz mascot is the banana slug. Second Born and I had lunch in downtown Santa Cruz in late January. After lunch we found a must have t-shirt that featured a large banana slug with the caption “SLUG LIFE”. The perfect gift for my next loss. So good in fact we decided I had to send it this year win or lose. He was very grateful and assured us he’ll get a lot of grief for it from his Geezer basketball pals. That, of course, was our hope.

** Odd to me that she’s not more motivated to make it financially feasible. At eighteen, I couldn’t wait to own my own car. So I parked golf carts and picked up range balls for a few years and bought a VW Bug for $1,500. Most gratifying purchase of all time. For the time being at least, in keeping with her peers, she’s perfectly content to bicycle, use public transportation, or, and maybe this is the problem, use her parents spare car.

Dispassionate Madness

Give the debacle that was the UCLA bball season this winter, I nearly gave up March Madness for Lent. But alas, the allure of winning big bucks in the office pool (so far ten people have put in five dollars each) inspired me to fill out and submit a bracket. Despite my late-adapting techno idiosyncracies, as an experiment, I decided to go with the Wall Street Journal’s computer generated bracket from beginning to end. Regrettably, we have Puke beating Kansas in the championship game.

One thing is nagging me, how does a computer factor in game location, crowd intensity, and 20 year olds’ emotions? It’s not like swimming where the predicted finish of the finalists in any given heat is quite predictable. The tourney’s popularity is largely a result of unforeseen upsets.

If the computer could speak for itself, it would probably say that by factoring in every result from the season its accounted for home/away, crowd intensity, and emotional variables. As a result, we have BYU in the Final Four. The experiment is whether a computer can predict upsets. Hope so.

Here’s a relevant excerpt from Tuesday’s journal:

To better understand upsets, and to find the best way to predict them, The Wall Street Journal looked at the 40 biggest NCAA tournament upsets since 2004—the games where the surprise winner was seeded at least five spots below the favorite. For each upset, we compared the teams involved by their performance in two dozen categories. The majority of these comparisons were based on how the teams matched up—for instance, how well one team shot three-pointers during the season and how well their opponents defended against them. The same head-to-head comparisons were made for factors like rebounding and steals. In the end, we found a few strong similarities between all of these matchups. But there was only one unequivocal theme: the importance of turnovers. In 30 of the 40 games, the underdog “David” team had been better all season at protecting the ball and avoiding turnovers than the “Goliath” team had been at forcing them. Getting steals also is critical.

How should I spend my winnings?