3/21 "From CEO to pizza man"
link:www.yahoo.com/s/1046736
"Ken Karpman went from making $750,000 a year to $7.29 an hour, plus
tips."
I don't understand how a guy making $750k can go broke. He probably
spent all his fortune on fancy house, fancy cars, fancy vacation ...
oh, and some fancy silicone on his wife. (See 00:34 and 00:56.)
\_ It's easy to go broke. More importantly, why is he working for
minimum wage now? He's not unskilled worker.
minimum wage now? He's not an unskilled worker.
\- it's seems like some significantly rich people have spectacular
levels of non-recoupable cash outflows ... if you buy a million
dollar boat, you can sell it with a haircut, but all the money
on docking fees, labor costs, yacht club memberships etc are
gone forever. i knew a guy who was paying $14k-15k/mo in *rent*
which is a reasonable fraction of your income even at $1m/yr.
Although I agree this guy could probably come out further ahead
by spending his evenings cutting expenses and liquidating
property than delivering pizza.
\_ Yeah, the outlays some of these guys maintain is pretty
surprising IMO. I read "The millionarie next door" and a
number of the highly paid doctors and lawyers they surveyed
had less in assets than your average HS teacher.
\- Somebody has to buy $3000 dresses.
\_ Life is about living, not about dying with the most $$$
\- living != buying shit
in your checking account. I'd rather be a broke doctor
who eats at good restaurants, travels around the world,
and drives a Porsche than one of those teachers who
has $300K in the bank and has a more-than-boring life
in order to save that much $$$ on $50K/year. A lot of
people in the Midwest and South have lots of savings
because their expenses are cheap and they don't do
anything exciting and don't buy anything nice. Does
that sound like a win to you? To some it might, but
not to me.
\_ Geez, talk about a false dicotomy. Saving some of
your money for later is not the same as becoming a
hermit. If nothing else, everyone retires eventually,
if you have a decent job and have no assets, you're
an idiot. (Sans some REALLY good excuse.) Anyway,
Travelling around the world is nice, but most of the
things people spend big bucks on are completely
retarded. I'd rather have a nest egg I can fall back
on than yacht club fees and $3000 dresses. Those
aren't 'living' they're just attempts to show up other
people, which is just dumb.
\_ I can't tell you how much I disagree with you.
We're not talking about 'not saving'. We're talking
about how a teacher could have more savings than a
doctor. The only way to do that is to save A LOT.
I would argue TOO MUCH. I don't want to wait
until I retire to enjoy life. I'd rather enjoy
life as I go. I might not live until retirement.
Boating is a lot of fun and that you think it's
somehow an attempt to show people up says a lot
about you. I am not advocating not saving at all.
What I am saying is that given a choice between
5% saving and 50% saving I'd err on the side of
5% and enjoy life. I know a lot of people of modest
means sitting on big piles of cash who never go
anywhere, buy anything, or enjoy themselves because
they don't know any different from the small town
lifestyle their parents and grandparents lived. I
think *that* is stupid. What are they waiting for?
Death? Their kids will be the ones to benefit.
\_ Not everyone thinks this is a bad thing.
\_ Which is why I said: "To some it might, but not
to me". I want the last check I write to
bounce.
\_ I, for one, am planning to live and still be
active into my 70's which should be quite
possible looking at relatives. Having some
money saved up can give you a lot of freedom
and options. You don't have to be worried about
monthly budgets and you can get/do something
expensive if you feel like it. You can invest and
potentially secure a supplemental income and
retire earlier, or work less.
Things are different for doctors. They are
already rich. Their earnings future is
guaranteed to be way better than the school
teacher. It's more secure than most other
high paying jobs. They can work like 2 days
a week and still live decently.
Spending a lot of money on things won't
necessarily mean you'll enjoy life more.
\_ Saving more doesn't mean you will enjoy
life more either and it's more likely you
will enjoy life less given that $$$ in the
bank doesn't do you any good until you
spend it. Last time I bought a car I spent
$50K. I thought: "I should just buy a used
car and save money. That makes sense. What
would I do if I had $50K in the bank right
now? I'd buy a nice car. Oh, that settles
it." I am not advocating no savings,
because that is obviously stupid. I think
you must strike a balance, though. It
would suck to put off doing things "until I
retire" and then die in a car wreck next
week. Save at a reasonable rate, something
like 10-15%, and enjoy life. I have a
friend who made $30M last year when he
left his old company (stock options). $30M!
What did he do? Get another job right
away. Stupid. Enjoy life. I can understand
wanting to work. I enjoy work. However,
his main concern was medical expenses
wiping him out and that his wife will get
1/3 if she leaves him (they are very happy
and there is no sign of that). It's not good to
always worry about money when you are secure,
like most doctors are.
\_ Well cars are particularly a waste of money
to me. A car is not something I want to
be working for. Driving a fancy car isn't
living better to me. It does impress the
ladies though, maybe that is worth it?
It's kind of like buying fancy clothes. I
doubt most men enjoy the fancy clothes, but
they enjoy how it looks to others.
\_ An expensive car is generally safer and
drives better. I am miserable
driving a POS car now (like when I
have to rent). To me it improves my
quality of life to have a car I like
to drive when I have to drive. It's
not about impressing others. I had a
friend with an old car that always
broke down and she was afraid to go
anywhere far from home and it really
affected her life. She finally broke
down and got a new car and she won't
admit it, but it made her life a lot
better knowing that she could drive
through a sketchy part of town at night
and not break down or take a day
trip somewhere without having to
arrange for a rental.
\_ The utility of a car that works is
pretty much infinitely greater than
one that doesn't work. The utility of
a fancy car over a honda is no where
near that great.
\_ The price of a fancy car over
an Accord isn't that different
either. $31K for a
top-of-the-line Accord versus
$31K for a BMW 328i or $35K for a
Lexus ES350, for instance. Where
you really save money is by buying
an older used car (late model costs
almost the same as new), but then
you have the potential 'doesn't
work' problem. My BMW, when it
was new, cost $170/month more
than my Honda Accord. People spend
that much on stuff like cable TV
(which I don't have) or movies
(which I don't go to), but the BMW
drives about 10X better even if
the utility is the same. To be
honest, I don't even think the
utility is the same. I feel my
BMW has helped me avoid several
accidents I would not have been
able to avoid in a Corolla with
superior handling, acceleration,
and braking capability. I feel
unsafe in many other cars. I
think a lot of people who never
drive a nicer car don't appreciate
the difference and maybe it's
better that way (for them) because
it's hard to go back to a minivan
after driving a good car.
\_ I dont recall whether DKAHNEMAN
did this study or just cites it,
but "studies show", if you ask
people "how much do you like
your car", there is a correl-
ation to the price. However, if
you ask them "how much do you
like/disklike your commute?"
[generally one of the least
liked activities], there is no
correlation [once you hit the
"reliable" threashold].
So expensive cars pay off when
corr [once you hit "reliable"
threashold], there is no corr...
so expensive cars pay off when
THINKING about how much you
like your car, but not so much
when USING it. If you can get
ahold of these two lecture from
2007, they are very, very good:
http://grad.berkeley.edu/lectures/hitchcock/kahneman.shtml
Note this is a study measuring
happiness and satisifaction, so
safety stuff is somewhat out-
side its scope. --psb
\_ No, we're talking about doctors and lawyers who
manage to waste so much money THEY fall below
"average" teachers.
\_ Let's be realistic. A doctor makes 5x what
a teacher does and disposable income is
probably > 5x more. Even if the doctor
saves 3% he's probably accumulating more $$$
than a teacher socking away 15-20% when
you account for his home appreciating, his
higher social security payments, etc. For
a doctor to fall below the average savings
rate of, let's be generous and say 5%, that an
average teacher saves means he is saving less
than 1% of his income each and every year.
I'm sure it happens (I've had years with
negative savings) but get real.
\_ cont'd
I have an acquaintance (not the one above) who
is a multimillionaire. He is not educated and
made his money in air conditioning and by
saving and buying rental properties as he
could from his (decent but not MD level)
salary. I went to Las Vegas with him and
we stayed at a scary place off the strip
with roaches and hookers. We ate at a
McDonald's that didn't have anything in
stock and was filthy (I have to imagine
corporate was horrified). Then, we ate
there again the next day with his other
multimillionaire couple friends. When I
complained that it was unsanitary and they
didn't have basic items in stock he relented
and we went to IHOP. The three people
eating with me were worth millions of
dollars. I, personally, think that's retarded.
I have seen this happen almost as often as
the "maxed out on credit cards and buying
the big screen TV" lifestyle and I think I
prefer the latter because at least it is
insect-free and I won't get a disease.
What was the advantage of having $5M cash
in the bank and $5M in properties if you
can't spend more than $30 for a hotel
while on *vacation* in Las Vegas? But
think of the $$$ he saved over Bellagio!
\_ This is how a real multimillionaire parties:
http://casakimball.com
\_ No way a GP makes 5X a teacher, more like
3X. But in any case, saving lots now means
retiring at 50 for me, which is worth a
lot of sacrifice for me now. But I am not
a teacher, our combined family income is
lot of sacrifice to me. But I am not a
teacher, our combined family income is
more like an MD, so I can have what I want,
which includes shopping at Whole Foods and
$20 bottles of wine with dinner and some
vacations, but we still save something like
vacations, but still save something like
30% of our take home pay.
\_ The median GP is 3X a teacher, but there
is more variation about the mean.
GPs are also not representative of
class {physician}. Most "GPs" these
days are internal medicine specialists.
If you want to retire at 50 that sounds
great if you can live a better lifestyle
than you do now. Otherwise, I'll pass.
\_ I'd rather take the bus down to the
pier and crew on someone elses sailboat
all day at 50 then drive my $50k car
to the office and work all day, but
each to their own.
\_ Whatever floats your boat. Why
not just crew now? You can get
paid for it, too.
\_ Can't pay for a mortgage in SF
and school for two kids on that
wage.
\_ So we all pick our poison.
\_ Internal medicine (and family practice)
docs get paid the same as GPs, right?
\_ No. Internal medicine is a
specialty. Why would a doctor
waste time with that if it
paid the same as a GP?
\_ I don't think you understand
medicine very well, actually. |
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