A while ago, I wrote a bit of a high brow article all about the concept of not repeating our mistakes and really exploring why we sometimes attempt things again, even if we learned it was a bad idea. Today I’m sort of broaching that subject again from a different angle. This will be a much more ‘down to earth’ and less philosophical article. Today’s article is really an exploration of some of the specific things that you have to experience at least once in life where the result is that you never really want to do them again. There are things we can know logically, but it doesn’t really sink in until it’s an emotional experience. It all started, like most of my stories do, with a human interaction with someone in my circle. A friend called me up to vent a bit about his current significant other. A point of note, for this article at least, is that his partner is much younger than him, she’s in her early 20’s in fact. He explained that she’s wanting to buy a new vehicle, which would cost somewhere between thirty and forty thousand dollars. Even if she got the deal of a lifetime, then she would still have to pay on the vehicle for many years. She’s not alone in this according to this quote from lending tree:
The typical term length for auto loans is 63 months, with loans of 72 and 84 months becoming increasingly common. The higher APRs of longer term auto loans, however, can result in excessive interest costs that leave borrowers ‘upside down’—that is, owing more on the auto loan than the car actually costs.
My friend with the young girlfriend and I, who have both been through the new car buying experience when we were younger, were of a similar mind. We both knew this was a bad idea. You start this bad trip by experiencing all the fun involved. I’m talking about parts of the experience like wasting a day or more at the dealership, the annoyance of dealing with the good cop / bad cop show of the sales guy vs the F&I person, and let’s not forget to mention years of payments on something that goes down in value.
The worst part, for most people who have car payments, is the negative equity spiral. This can take years and years to get out of, and I know some who never do. They, heartbreakingly in my opinion, spend the majority of their life in ever increasing car debt where the car is always worth much less than they owe on it forcing them to roll the negative equity into the next car’s payments. It’s why some people believe they will always have a car payment as a fundamental fact of life.
In our musings over the poor decision, my friend said he didn’t want to talk her out of it, because, in his words, “The first time the 8K car with 100,000 miles that I talked her into breaks down, I won’t’ hear the end of it” I can understand that, it’s a valid point. He has to live with the girl, and there are always ‘family scripts’ or behavior patterns we all play out together in our personal relationships. I dare say that anyone reading or listening to this has been in the “I shouldn’t have listened to you and did what I want” argument with their significant other.
What my friend and I have discovered through life experience is that owing money on something that goes down in value is a bad idea and can be a trap that lasts for years and years. We know that the excitement of the vehicle never lasts as long as the payments. We know life throws curveballs at most people during the 6-7 years we would be committed to that $550 a month payment. When those curveballs hit, such as losing jobs unexpectedly or some family or medical need that kills our cash flow, having that extra $550 would come in very handy. A great example in this case, especially considering the nature of their rocky relationship: breaking up with a boyfriend and having to move out on your own is far more likely than living together with zero problems for the multi-year duration of the car payment. FYI, I’m not throwing shade on the girl here, most relationships when you are in your twenties are emotionally charged. It’s especially so in this particular case for reasons I won’t go into here.
The curious element in all this is the girlfriend in question is a pretty smart cookie. She’s just making horrible decisions based upon emotions. She’s worried her paid off car has too many miles on it and may break down. Clearly a few $500-$1000 car repairs are much more preferable. I suspect when a few life events happen, she’ll rethink the idea of a car payment in the future and land squarely on our “car payments are bad, M’kay?” side of the aisle.
As I said, the whole thing got me thinking about life experiences you need to have before you automatically think twice or decide to never do them again. I thought I’d share some of the ones I’ve experienced over the years. Most of these are related to youthful experiences, but some can happen at any point in your life.
The first one is what we already cited in my opening story. It’s the “buying a first car with payments” experience. If there are other things that are needed in your life, then a new car payment nearly always goes way down in a priority list. Also, once you start buying cars with cash after years of making payments, the only thing that gets you back into payments is if you suddenly don’t have readily available cash, which, to be fair, could be the case for a number of reasons. If you are a little older and/or have the cash reserves, then a good but lesser cost car purchased with cash is almost always more preferable than a more expensive one with payments.
Like the story of my friend and his girlfriend’s new car, another recent happening in my life got me thinking about this topic. My daughter, my oldest one, got engaged and immediately started planning her wedding. My poor wife is getting texts by the hour on dresses, and venues, and all sorts of other wedding related crap. I definitely feel like weddings are one of those things where you only make that mistake once in your life. I’m talking about the big wedding with all the build up and planning, not a marriage. At the end of it you usually realize it was a complete waste of effort relative to the benefits. As a generic example, the young bride-to-be can’t abide going without the best photographer she can afford as she will argue, you only get married once but the memories need to last forever. The seasoned person realizes that $3,000 that went to the high end photographer for photos you’ll only look at once a decade could have been put to a much better use. It’s the same with every other wedding related expense or effort. If weddings were all that great for the family and guests, the large number of people who get remarried would want to have a party every time. In my experience, most folks who get married a second time usually do it very low key. They go to a destination, have a small ceremony, and in many cases live out the rest of their lives happily with the new life partner.
Another big one comes as a direct result of marriage. It can of course happen without there being any kind of marital commitment but young marriage is usually a precursor. I’m talking about raising children from a young age. Yes, I know many grandparents today have to take kids in for various reasons. That being said, in my experience, if you talk to a 40 something whose kids are out of the house, rarely do they express any desire to start all over again. Child rearing is hard, expensive and oftentimes thankless. I’ve often felt the human race would die out if young people knew exactly what was involved with raising children before they had any of their own. Having kids and raising them to the point where they’re out of the house is almost universally a one-time and never again decision!
These next few life experiences which seem like a good idea before you live them are admittedly more related to my personal experience vs. the way the average inhabitant of the world sees them. I say that insomuch as I do know people who do these things again and again. These one and done experiences are not as universal as massive car payments relative to one’s income or having big weddings, but they are some of the life experiences I’ll avoid from here on out.
I learned quite quickly in my life that having non-marital roommates vs having your own place is something I’ll only do once. I had a couple of experiences in my early twenties which scared me away. One of which involved an unstable roomate, one who untimately comitted suicide shortly after he paid me a visit to cause me harm. I promise you that I did nothing to deserve that. There were a few other negative experiences I had, but none as bad as the suicidal lunatic. Ultimately, I’d rather live in an old crappy trailer alone or with a spouse than a nice apartment or house with a roommate. I get that there are some people who have good roommate experiences. In my experience the greater majority don’t have them. A very common pattern I see is related to folks who are younger and decide to move in with a close friend. Things can and often get very complicated, dysfunctional and ultimately adversarial very quickly. People who click socially often do not click in the kind of financial and interpersonal partnership required for cohabitation.
I’ve discussed this next one ad-nauseum in this forum, but I played with the credit card industry once. I lost big time. I won’t ever do it again by my own volition. This is one of those things where I’m very much alone compared to your average person who is ok with unsecured credit. I don’t want these things in my life, I don’t trust them, and I know that when life happens, there’s no happy ending with credit cards. Ultimately the crap you get with your credit cards vaporizes into the ether of your life. This means you’ve got the misery of the regular payment from the heartless creditor, without the asset like the car in the car payment scenario. Credit Cards? Tell you what, my opinion is that the credit card companies can take their cash back bonus and use it as if they are getting a prostate exam.
From a career perspective, I think taking a job where there are recruiting promises for great personal advancement at what I think of as the “work hard to play hard” company will not happen unless I’m forced to as I have no other choice. There are tons of companies out there who take pride in the idea that they push their people to the limit. They are relentless in driving as much performance as they can out of their workforce. The rewards are positioned to be great if you are one of the very few who succeed, which is often by luck. As I have oft cited in my work and life commentary, this type of company leadership encourages the employees to celebrate, i.e. piss away all their money in spectacular fashion, as hard as they work. This works well for the company as “Bob’s just went to Cancun for two weeks with his performance bonus that you could get too!” is a hell of a recruiting tact compared to, “We matched Bob’s 401K contribution 125% of his allowable contributions”. Also, if Bob has no savings because it all went to Cancun bars and seedy massage parlors, he has no choice but to come back and work extra hard for the company to make sure he makes rent that next month. Ultimately most of these organizations are always recruiting because people burn out so quickly. Like the car payment cycle, many people get stuck into this type of rut because moving to any other industry/career can be a challenging prospect when you consider the great reset switch. Still eventually people move on and after they are gone, they usually never go back because even if they hear the pitch again while job hunting their spidey sense starts to tingle. I’ve always felt that people could tolerate these types of organizations better when they have nothing else going on in their life. Once the kids show up things have a tendency to change a bit.
The Franchise to “Be your own Boss” or similar Gig and/or MLM “Great Opportunity” is another one. This is the mirror image of the “work hard play hard company”. The difference is that the poor individual has to shoulder all the investment and risk. I came close to this a few times in my desire to get away from corporate America. I never fell for the MLM lies. I do know that there are some people who are very susceptible to them and fall for MLM after MLM. They are always looking for the next great deal. Regardless, if I’m going to put up the bucks, it’s not going to be to sell somebody else’s stuff with any sort of exclusivity that these types of business constructs demand. I have to admit, I do have fun when one of my friends gets involved with this type of seedy business. Because of the recruiting component being so heavily pushed, I’m always asked to participate. I’m almost always pitched with the story they were given about how the guy who recruited them makes hundreds of thousands of dollars a year and only has to work a few hours each week. I always respond with the same line. Soon as you get to that point, show me your tax return and I’ll sign up. I have never, ever, had somebody achieve those heights of success with any MLM.
In the medical world a great example of one and done are chiropractors. I know some people swear by them, in my experience it’s a lifelong hook that does no real good. You pay several hundred dollars every month for a guy to make you feel uncomfortable. Thank you, but if you don’t have a permanent fix, I don’t need another subscription service, a comically expensive one at that.
There are other experiences in life that are one and done for most people. I could probably go on and list several more here. I think I’ve made the point. There are some experiences in life we simply have one time, maybe because of social norms like in the case of a wedding, or because we hadn’t had the experience before, like a chiropractor. Once we have that experience, we don’t want it again because we see it for the fallacy it is.
Unfortunately, the thing that all of these have in common is that there’s usually an emotional component. You could know something logically but not know it emotionally until you’ve had the experience. Car payments and children fall squarely into that category with the other things listed here close behind. Ultimately we have to do what my buddy did. We have to let other people have these experiences as it’s the only way they will learn. It takes several years of having to juggle your car payment with other unexpected costs in your life before you realize maybe that car payment wasn’t a great idea. After you spend a year or two of your life planning for an event that you barely remember afterwards, you’ll realize the justice of the peace or an all-inclusive vacation with a quick beach wedding is a better option.
There is a benefit to this all. Once people have these experiences, then you have something in common with them. Over time it creates a similar world view. Then we can all sit around, look at the young ones making those same decisions and be contented in the fact that we won’t be making those mistakes again. There’s one last benefit. I know in about three or four years, there will be at least one nice SUV on the market where somebody else paid The majority of the depreciation on it, and I can pick it up for a cool 8K.