Witle$$ Wi$dom

Lately, I've had cause to ponder the way people handle money. My teen years include my father sneering at me: "You spent money on THAT?" Interestingly, when I was young, he was happy to shell out money for nearly anything and everything I asked for. My tastes weren't extravagant -- I just wanted the "double-header" ice cream cone, which was about twice as much as the single. It was only when I started earning my own money that Dad began picking at me. I guess he worried that I would never learn how to save. He needn't have concerned himself. My tastes have always been simple and basic, and I know the rudiments of investing as well as saving.  

I can't necessarily say the same for my parents. They are no longer available to ask about this, but back in the late 1980s, they sold their 40-year-old home for many times the price they bought it for; they then moved to Florida, bought a comparatively cheap house and piece of land ... and then took out a 30-year mortgage! This will always be a mystery. I paid their mortgage for another ten years before selling it for about the same amount as the purchase. 

In the 1980s and 1990s I worked for a doctor. It was a small, modest practice. He refused to take the financial steps that most doctors do and create a "PC" or "LLC," which would have protected his professional income. In fact, he reasoned that since his accountant said that about 30% of his gross income could be allotted for personal use, that's precisely what he did. Every payment that came in, he'd transfer that percentage to his personal bank account. And anytime he needed a bit of extra green, he'd transfer some more. He was already in financial trouble when I first started working for him. He could no longer get any major credit card. American Express was the only company that would give him a card, but their requirement was that it be paid in full each month. Did he pay it each month? Heck, no. He knew perfectly well that the AmEx police weren't about to raid his office and cart him off in handcuffs. The most they could do was cut off the account, and they did. Frequently. The whole cycle started up again if he managed to pay off the balance.

The Internal Revenue Service operated somewhat differently. True, they never slapped the cuffs on him, but when he fell far enough behind, they had no problem coming to the office, combing through each and every file he had, and garnishing him for years on end. Somehow, he survived this, but his attitudes toward money were often of the jaw-dropping variety. How does someone earn an advanced degree and stay in business performing a very necessary service, only to have to cut expenses steadily each year? And every time reality stared him directly in the face, he continued to resist. He signed a lease for a luxurious office suite, and went well over a year without being able to pay rent. I believe his philosophy was "fake it till you make it." Perhaps he thought he'd attract a better class of patients if he had a nicer office. 

The doctor knew he had money problems, so he often brought in fee-paid consultants, all of whom advised him to partition his finances and stop racking up luxury purchases on AmEx. The doctor politely ignored them. He knew better.

This cluelessness also took the form of simple laziness. He'd go through the daily checks and scrawl his signature on the back, instead of using the bank endorsement stamp he'd had made for that purpose. I believe this had to do with his "percentage" calculation that went into his personal account. Regardless, this very old-school habit got him into even more trouble eventually. Someone observed this; they forged his signature, signed their own name beneath it, and deposited it into their own account. This went on for just a few months, but it was long enough for the doctor to quickly feel a squeeze on his cash flow. He demanded that his whole staff put every effort into collecting more money. Once we started contacting lawyers, who often hired the doctor for expert testimony, we learned that all of them had sent us checks that somehow never turned up. A bit more research revealed the fraudulently endorsed checks; the culprit was fired, but the doctor never got the money back or even learned whether there'd been an arrest.

The doctor, from what I hear, is over 80 years old and still practicing. He probably still needs  to square things with the IRS and AmEx.

Let's look at another well-educated couple I know. Without a doubt, what follows is nothing more than my opinion. People are going to do things the way they feel is best ... but I still tilt my head and ask myself "Huh?"

My friends are within a hair of turning 80 and are mostly retired. The husband has done a couple of short-term stints with FEMA, just in the last decade. Both of them are very high-energy, especially when it comes to gardening and home improvement. The wife seems tireless; she can do more in a day than I can even imagine doing in a month. The impression I get is that they believe age is no excuse to slow down or cut corners. Still, I can't understand why someone at that age would endure the expense and discomfort to get a double set of tooth implants instead of dentures. Perhaps they have heard stories of people's dentures being stolen in nursing homes, or the very real problem of needing to get them refitted every few years. But I can just think of better ways to spend my time and money. 

My friend told me, about three years ago, that she and her husband were getting really tired of the huge 2-story house they had, on a corner lot, that required almost daily care, both inside and out. They wanted something closer in to the city, with no stairs and a smaller yard. I sent her emails every now and then, if I happened to spot a home for sale that matched their criteria. Long before the current crazy seller's market, I saw numerous pretty little cottages on quiet streets, that would have been perfect for an elderly couple. 

So what did they end up getting? Before I tell you, I'll add that they have a daughter in her 50s, married but with no kids. I imagine their hope is to pass a substantial estate to her. I know the daughter and her husband already have a large suburban house, a hundred miles or more from Mom and Dad. Anyway...my friends bought the new house first. They were able to get a bridge loan, and that's great, but why? Perhaps they thought getting all their stuff out of the old house to fix it up would get them a better selling price. I don't know. But that's what they did. They bought a house, then sold the old one. I have never done that in my life; it's always been something of a nail-biter to get one place sold in time to buy the next one. But again... I can only speak for myself. Everything my friend tells me suggests that if they had the whole thing to do again, they might think twice about their plan.

They said they wanted a smaller house, closer in to the city. What did they buy? A HUGE house -- granted, all on one level, but probably twice as many rooms as the previous one. The first time I visited, I sincerely wished I'd brought bread crumbs to scatter behind me. My friend never left me alone during the visit, and this is a good thing. I would surely have gotten lost, wandering from room to room, perhaps changing time zones. This house was much farther from the city than they'd been before. The yard, true, was landscaped so that there weren't as many elaborate flowerbeds and bushes to plant -- but every bird in the county was assured of tasty seeds in the sanctuary they created out back. The land was not on a corner, but behind it was a new construction project, so there were (and still are) continual problems with irrigation, flooding, and soil management. To alleviate this, they hired a company to fix it. They paid in full, in advance, in cash. They are still waiting, months later now, for the crew to come in and do the work. There seems to be one "reason" after another why it hasn't happened, so now an expensive lawsuit looms. 

So, you might ask, what about me, Judgy McJudgeface? I currently live in a double-wide mobile home, and am giving serious thought to selling or renting it, and becoming one of those elderly "nomads" who live in campers and/or hotels, wandering around the country, taking odd jobs. I doubt that my income will ever soar to a significant height. Am I managing my money intelligently? I'd probably give myself a B- grade, but again, it's a matter of perception. Earlier in the year, we had some major plumbing issues. It had to do with the sewer connections. This park is over 50 years old; pipes rust and fall apart. Tree roots puncture them and mess up the pressure, so you run the washing machine and sewage backs up into the bathtub. This is every bit as lovely as it sounds. But my mistake was calling my own plumber. I figured it was my problem. This would have been true in the case of a faucet washer or toilet flapper. But this was a matter of infrastructure, and the park management has Roto-Rooter on retainer. I could have saved myself an embarrassing amount of money by just calling the office. Eventually, Roto-Rooter came in and fixed it, whereas the guys I called didn't even know where our clean-out valve was. 

Live and learn. Or, there's no fool like an old fool.