Debt and Equity

From P.J. O'rourke's book Eat the Rich:

"There are two main kinds of investments: debt and equity. Debt is just lending money. A General Motors corporate bond is a "debt instrument." You lend GM money, and GM promises to pay you back, plus interest. Your savings account is also a debt instrument. You lend the bank money, and the bank promises to let you withdraw it, never mind that the interest is less than you'd get from keeping a sock full of buffalo nickels under your bed. And your checking account is a debt instrument, too. You lend the bank money and they...charge you for it? Plus ATM fees? This is probably why so many pistol-waving people rob banks and why so few pistol-waving people rob General Motors."

Might I also add to this list ridiculous overdraft fees on debit cards, fees on getting your past statements, fees on fee administration, and a fee creation fee (they have to pay someone to come up with all those fees).

Took the Tranny in the Fanny

It’s an ugly moment when you recognize that what at first appears to be a huge piece of bad luck really boils down being your own damn fault.

Last year I had a car with 200,000 miles on it, in need of about $1000 of repairs. Decided it was time to trade it in and get some newer and more dependable. Picked up a pretty decent deal on a 1999 Subaru Forester with only 69,000 miles. Now just over a year later, the Forester has 105,000 miles on it and has a completely (insert your swear word of choice here)-up transmission. The good news is that it shouldn’t cost me more than $3000. It might only cost me about $2000. So my master plan to pick up a more dependable vehicle obviously was a stroke of pure genius.

But wait you say. How could you have known that the tranny would poop out early? You are correct. I could not have known that. And that is not where my fault lies. My fault lies in that damned dragon called failure to manage your money. That ugly moment when I realized that a little bit (OK, maybe a LOT) of discipline in regards to saving money regularly would have gone some distance toward mitigating this situation. It wouldn’t have avoided the problem, but it would have given me the wherewithal to combat it more effectively.

Lesson learned. I’m saving money from now on dammit! Putting a little away. Filling the slush fund. Secreting away a little mad money. That dragon must die and I start twisting the garotte today.