Friday, October 26, 2012

You're not Batman - June to October 2012

Debt gets classified in a lot of ways by a lot of people.  Don't get trapped into thinking about debt as the wrong person.  And definitely don't kid yourself that you're an X, when you really aren't. Just because you've watched Batman kick ass and lived his life vicariously through the portrayal of stunning computer graphics, brilliantly talented artists and surreal technical models, it does not make you Batman.

Yes, humble your fucking self.
  • Yes, humble yourself even though you parents make millions.  You don't make millions.
  • Yes, humble yourself even though you're uncle loves you and is leaving you a 10-figure trust fund.  You will accidentally or intentionally be a little shit and that trust fund is going to your uncle's other favorite niece who hates your guts from when you pushed her in the pool  at the tender age of 5.
  • Yes, humble yourself even though you're a genius in the top .01 percentile of the nation at a top Ivy League with a 6-figure job offer & 7-figure bonus straight out of school. 2008 happened.
  • Man up and be humble.  You're not that special.  You are definitely not Batman, nor will you ever be.  You will only ever be yourself.  Get to start loving it.  It's only the show you will have to put on for the rest of your life.

Investors see debt as income generating.
Businesses see debt as opportunity cost & capitalization.
Rich people see debt as a vehicle for obtaining tax-free income even though they have the cash.

You are not an investor.
You are not a business.
You are not rich.

You are likely to be someone that's delusional, but in realty thinking of debt as one of the following:
College kids see it as party money.
Pushover fluffer guys see debt as the key to that girls heart.
Assholes see debt as their entitlement to the world.
Materialistic show-sheep see their debt as fodder for the praise of other sheep.

Generally, secured debt is the safest debt for a lender.  Cars & Mortgages make sense to lend out because there's something to take back.  Credit cards are just pure access to cash.  how many of you know someone who cant even pay back 10 bucks in a respectable amount of time?  This is why unsecured debt is so damn expensive and choosing to use it for something longterm is ludicrous. Credit cards are to be shortterm debt rather than long term debt.

So all this talk about debt, let me see how I've been progressing in my debt journey since Jun 2012. More specifically, what has my credit card balances looked like at the end of each months' bill paying frenzy?
  • June 2012 - $63139
  • July 2012 - $56709
  • August 2012 - $57386
  • September 2012 - $58353
  • October 2012 - $59132
Don't say "congrats!" for the overall ~4k drop since 6/2012.
  • Julys drop is attributed to a 8000 loan from mom.
  • August went up so that I could go camping and socialize.
  • September had an 800 mile road-trip to a friends wedding.
  • October had an emergency 800 mile trip home due to family.
So what have I done so far to dig myself out?
  • I shredded the credit cards. There's no way to get those cards back except with a phone call and a week lead time from the CC company.  I've tried sock drawering them, freezing them in a glass jar.  But when it comes down to it and I really "want" the money, it only takes one weak moment to grab those cards, or dethaw them in hot water to gain access in under 15 minutes.
  • I gave up my iPhone plan, but I did steal my wife's iPad and coupled it with Google Voice.  I get my phone calls over my work provided phone and my iPad.
  • Rigorously attempting to pay things off and reduce my monthly cash flow.
This kind of debt isn't a big deal if one is making millions of dollars a year.  I am not.  My monthly after-tax/insurance/401k income lands in around $5600/month, which puts me somewhere in the upper-percentiles for household income.  It doesn't feel like much, but there are people that have to choose between food and rent, so I do have it pretty good.  It's just that I know it can and should be a lot better.

I'm not Bruce Wayne and can burn cash for shits and giggles.  I'm just a guy that wants 2-3 million for retirement.  At the moment, I'm about negative 300k on that journey.

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