Berkeley CSUA MOTD:2009:March:21 Saturday <Friday, Sunday>
Berkeley CSUA MOTD
2009/3/21-30 [Transportation/Car] UID:52739 Activity:high
3/21    "From CEO to pizza man"
        "Ken Karpman went from making $750,000 a year to $7.29 an hour, plus
        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
                          \_ 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:
                                                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:
                                \_ 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
                                               \_ 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.
Berkeley CSUA MOTD:2009:March:21 Saturday <Friday, Sunday>