Month: December 2024

When I was seventeen, I wanted to make a big impression on Mary Hadalamb.  She was a big Beatles fan and they were coming to Detroit.  Tickets were $40 each.  The whole evening was going to set me back at least $120.  Did I have the cash?  No, not even close.  My total Net Worth, at the time, was $38.75.  How did I know this?  I checked my pockets.  Well, I had another $4.75 in the Christmas Fund account at the bank but that was it.  The law of limited resources very clearly said, we could catch a movie and follow up with a fine dinner at the Big Boy and not much else.  The really bad news was that Thurston Howell, III did have sufficient capital for the Beatles and Mary accompanied him to the concert.

So it was easy to track our capital before massive technology took over our lives.  It primarily was driven by your cash reserves.  You checked your pockets and your bank accounts.  Using that information, you could make great decisions on how to spend your money and how to get more of it if you ran low.  If you didn’t have the cash, you were not going to the concert.  At seventeen, we were all outstanding money managers. 

Starting my Freshman year at Eastern Michigan, I had three key financial goals.  Sufficient funding for dates, $1.85 to buy a six pack of Pabst Blue Ribbon whenever I wanted, and $50 dollars to cover a bad day of shooting pool.  The business plan for Mike Inc. clearly showed that I needed to work full time all summer, aggregating a cash position and Net Worth of $2,500 on August 31.  In addition, I still needed to augment my cash flow during the school year with part time employment.  No fine dining with Ms. Hadalamb after Thanksgiving without income from a part time job.  Fortunately, Elsifor Moving and Storage provided the perfect employment opportunity.  I drove a moving van full time during the summer.  Lots of lucrative overtime.  The moving business slowed significantly during the school year.  Symbiotically, part time work, scheduled around my pool shooting class schedule worked very nicely for both Elsifor and Mike Inc.

Things were simple. We really didn’t have many options.  No one was going to give us a credit card and no reasonable bank was going to lend us anything.  So the daily decision making on how to deploy our money was very simple.  What expenditures were required?  Are there any funds left over?  Yes!  What would we like to do with the extra funds?  We then needed to take concrete steps to actually spend the money. There were no hidden disbursements. We paid cash or wrote checks for everything.  After we spent the money, we knew how much was left in our pockets or checking account.  We had a solid understanding of our near term cash needs and of our total Net Worth.  I always made sure that I had a week’s worth of PBR reserves.  In addition, the one Benjamin disaster fund for bad pool shooting was tucked into the corner of my wallet.     

Fiscal responsibility was easy to execute in this environment and most of my friends did a great job of managing their financial resources.  

Fast forward to the 2020’s.  It is almost impossible for anyone to competently manage her or his finances.  Cash is no longer king.  In fact cash hardly even matters.  I have had the same $115 in my money clip for eighteen months.  If we want to purchase something, we flash our phone, tap the credit card, or stick an item in our on line shopping cart and go to checkout.  If there are no red lights, the transaction is processed.  About eleven different IT systems instantaneously run through various aspects of the transaction and some of our capital pile is shifted to the vendor’s pile.  What does our pile look like before and after this transaction?  It’s impossible to tell.  Reviewing the Net Worth economic indicator is completely excluded from the process. 

Vendors, banks and technology companies tell us that all of the electronic processing is designed to improve our lives.  Balderdash!  It is designed to improve their profits.  Little clerical work is required to sell something and collect the funds.  Most of the required effort is actually performed by the customers.  “You don’t really want to send us a check every month.  Just give us permission, and we will, electronically, extract those funds from your bank account or charge your credit card.  You won’t have do anything.”  So I have authorized at least thirty different vendors to automatically extract assets from my pile and put in theirs.  Maybe it happens when I specifically buy something.  Often it is a monthly recurring process that happens until I officially tell the vendor to stop. Some payments are identical monthly charges.  Others are variable.  I have authorized at least thirty vendors or service companies to reduce my Net Worth every month.

All of the green lighting and approval processes are simply directed to whether or not I have sufficient funds or credit to pay for each of the transactions.  “Is there room on your credit card or enough cash in your bank account to cover the ACH?  Yes!”  We get the screen showing a green checkmark and the words “Good News! You are Approved!”    

That whole financial process that allowed me to evaluate the value of the transaction and the impact on my pile before I spend the money is gone.

I knew that I could not take a date to see the Beatles for $120 dollars but I just arranged an outing to see Taylor Swift for $8,500 dollars.  Can I afford this?  Who knows!  The automation accepted everything so the deal is done.  Can I actually pay this off at the end of the month?  If not, my $8,500 just got 25% bigger because of credit card interest.  Potentially, I just spent $10,125 to go to a concert.  Do I need to borrow more money to make the house payment, do I skip funding the 401 k again?  Without a day and a half of financial analysis, I can’t put the pieces back together.  

A further complication is that some of these expenditures don’t require real cash.  I have to use Apple Pay, PayPal, and three other pseudo currencies.  So far I have avoided Bitcoin but it is a matter of time until my physician says “If you want this bypass surgery, you need to pay me with Bitcoin”.      

The day of reckoning occurs after I have spent my money and the credit card bill arrives.

DANGER WILL ROBINSON.    

Yikes!  Amex is $15,402 this month and Visa is $11,307.  I can only pay half of that.  Would have been nice to get a “low capital warning” instead of a simple green checkmark when I was spending all of this money.  By paying half, I am borrowing $13,000 at 25% interest rates.  Even my uncle Vito doesn’t charge this much!

The good news is that having trouble with your Visa bill is not likely to incur bodily harm.  Getting behind in payments to uncle Vito will.  But there is still a lot of pain and challenge in overextending credit card debt.  It is very easy to creep up to the card limit.  Compounding $30,000 of credit card debt at 25% can generate huge numbers very quickly. 

If you decide to pay off the cards with an early withdrawal from your retirement account, more bad things happen.  First the money you take out is immediately taxable and you pay a 10% withdrawal penalty.  For most of us, that is at least another 34% assessment.  In addition, not maximizing my IRA contributions may make it very difficult to retire.  If I don’t make a contribution this year or, even worse, take money out of the retirement account, I may be driving a truck again at age 75.

Before technology, internal control over my finances was proactive.  I knew what impact spending money would have on my Net Worth before I actually made the disbursement.  Technology has made it incredibly simple to spend money but extremely difficult to understand the impact of all these expenditures on our accumulated wealth.  The only weak, back end, control I have is knowing how close I am to the spending limit on my credit cards.  Six or seven hours of analysis will put sharp focus on my financial standing.  However, that is a little difficult to do when I am waiting in the queue for Rose Bowl tickets.   

So, in the 2020’s, spending habits have changed.  When we elect to buy something, anything, we never assess the impact of the decision on our pile of capital (Net Worth).  We just wait to see if the green checkmark and the word “approved” appears on the payment screen.

I haven’t seen Mary Hadalamb for a while.  If she wants to go to The Beatles Revival Concert, I think I need to do a lot more financial research before I hit the “Proceed to Checkout” button.

Very often, Susan and I will make Christmas cookies.  We don’t do it every year but we do it most years.  Sue is spectacular with Sugar Cookies and five or ten other types of holiday offerings.  I am pretty good at making two classic German cookies.    

You truly have to be in the Christmas spirit to jump in to this project.  This year we felt the rapture.  We were chatting about making cookies with our good friends, Ruth and Steve and John and Mary.  We asked if they would like to join us.  We could double or triple our recipes and make a pile of cookies for everyone.  “Great idea! We’re In!” 

This always seems like a simple, idyllic exercise.  We will drink egg nog and listen to an array of Christmas carols.  Maybe, a little Schnapps.  Perhaps the temperature will drop and we will see a few snow flurries in Florida.  We forget all of the challenges we have had making cookies in the past.  For example, last year we used self rising flour instead of all purpose flour and baked up a bunch of tennis balls. The revisionist memory may happen because there is always a twelve month interval between cookie making sessions or perhaps our cognitive skills are trending in the same direction as Joe Biden’s.  

Not with standing, we move boldly forward with a lot of positive energy.  We are planning on making three types of cookies: classic Sugar Cookies and two German favorites, Springerles and Lebkuchens.  We will start the process at 2:00 PM, finish 450 cookies by 6:00 PM, have a few drinks and nice dinner around 6:30 or 7:00.  Maybe we will end the evening watching White Christmas.

Reality starts to set in when we review the recipes.  The Springerle and Lebkuchens are truly family heirlooms.  They have been passed on to me by mother.  She actually got them from her great grandmother.  A lot of unusual ingredients: anise seed, anise extract, almond extract, candied lemon peel, candied citron and Baker’s Ammonia.  A lot of steps for each cookie.  In fact, when you lay the recipes side by side, this cannot be completed in less than three days.  I am convinced that Einstein and Fermi decided to split atoms because it was easier than making their grandmothers’ Christmas cookies.

What the hell!  We all are retired.  It’s Christmas.  This will be fun!

So the day before the big bake session, I whip up two batches of dough for the Lebkuchens and Sue makes a big batch of Sugar Cookie dough.  We stick them in the refrigerator. The plan for bake day is to bake all of the Sugar Cookies and set them aside to cool.  Change the oven settings and bake all of the Lebkuchens.  Sometime during the Lebkuchen process we will break up in to two teams.  Team one will frost and decorate the sugar cookies and team two will finish baking the Lebs.  Finally, we will roll, mold and cut the Springerles after totally completing the baking process for the Sugar Cookies and Lebkuchens.  We can’t actually complete the baking process for the Springerles on bake day.  The nifty thing about Springerles is that they have pictures of different Bavarian symbols on each cookie.  You accomplish this by pressing a Springerle board on the dough after it is rolled out.  The reason we use the weird baker’s ammonia is to freeze the pictures in place.  This can only be accomplished if you let the unbaked cookies rest in a cool place for twenty four hours.

Well the bake day plan seems pretty simple!  I don’t see a problem banging this out in four hours.  Do you?        

Good news.  During the split Leb and Sugar session, the drinking lamp will be illuminated.  The process is sure to go more smoothly after one or two martinis or a few glasses of white wine.

What went wrong?  We completed the Sugar Cookies and Lebkuchens as planned. The Sugar Cookie prep was flawless.  The Lebkuchen prep had problems.  John, Steve and I took turns rolling and cutting these beauties.  I explained that the cookies were simple rectangles ¼ inch thick, 1 ½ inches wide and 2 ½ inches long.  In essence, a CPA, a cardiologist, and tax attorney were conceptualizing the best methods for high volume baking.  We had several rulers and a spiffy tool to measure the rolled dough thickness.  We thought that using a ravioli cutter would add a nice beveled edge to the final products.  Surprisingly, the methods we developed were not the best.  In spite of excessive measuring, there was a great deal of variance in cookie sizes.  The ravioli cutter was hard to use.  It would get completely gunked up after a few cookies. The spiffy beveled edge did not hold through the baking process.  It took a very long time crank out a full sheet of cookies.  We completed the Sugar Cookies and Lebakukens around 6:00 PM and broke for dinner without even starting the Springerles.

In addition to the baking process, an inordinate amount of time is required to buy all of the ingredients and assemble the baking tools.  We have more than seventy five cookie cutters.  Sorting them is an effort. For Christmas you probably want to exclude the alligators, grizzly bears, and Darth Vader cutters.  Sue and I spent at least forty five minutes trying to find our one and only Springerle Board.  The baker’s ammonia had to be ordered from Amazon.  

Starting the Springerles after dinner did not work well. I sensed that some of the World Class bakers were starting to lose their zeal.  Even the Carpenter’s Christmas album playing on the sound system could not retain the Christmas spirit.  Others, especially those who had lubricated themselves with a few martinis, had plenty of spirit.  They were definitely fired up to finish the project.

Because of the volume of dough, the Springerle recipe cannot be doubled.  We made two batches and each batch requires at least twenty five minutes of mixer time.  In addition, they are supposed to cool in the refrigerator for at least an hour per batch before rolling out the dough. We tried to shorten the total time by putting the dough in the freezer for fifteen minutes instead of in the refrigerator for an hour.  We finally finished getting the Springerles to the baking sheets at 10:30.  After baking the next day, the pictures on the Springerles started to fade. 

So we banged out about 450 Christmas cookies.  Our four hour estimate turned in to eight and a half.  The participants fell in to two camps.  One group, mostly comprised of minimalist drinkers, thought “Thank God it’s over.  All’s well that ends!”  The other group, who had been pounding bourbon and martinis, thought we should do another batch or two of Lebkuchens.

Most importantly, all of the cookies tasted great.  The Sugar Cookies looked perfect.  The Lebkuchens always look ugly but the flavor and texture was right on.  In essence, they looked and tasted just the way they should have.  The Springerles looked funny but the taste was terrific.  

The process may be significantly improved by judicious use of alcohol.  We should break out the martinis a little sooner and all of the participants, who are not alcoholics, should be sufficiently lubricated no later than 5:00 PM.  Egg nog with rum, a lot of white wine, or several high balls may really promote the feeling of Christmas.  After dinner, we may spontaneously find ourselves caroling throughout the neighborhood. 

The real magic of Christmas is not that God presented himself to mankind or that Santa can reach six billion households in one evening. The real magic of Christmas is that you will forget the debacle it was to bake Christmas cookies when Christmas arrives next year. After Thanksgiving, whipping up a few family cookie recipes will seem to be one of the most romantic and enjoyable activities anyone could ever perform.

I was very disappointed to see four different college football games end with brawls on Thanksgiving weekend.  In each case, the winning visitors tried to plant their University’s flag in the home team’s midfield logo.  How did this become a ritual?  This is both wrong and stupid.

In 1995, Gary Barnett took over the reins of Northwestern’s football program.  He handed out hats to all the players that said “Expect Victory”.  Since Northwestern had not had a winning season in modern history and was considered by all to be the worst college football team in the country, the hat was very humorous.  The opening game was in Southbend against the highly touted “Fighting Irish”.  ND was at least a 30 point favorite.  In his pregame speech Barnett said: “Look, when we beat these guys, don’t put me on your shoulders and carry me off the field.  That will tell everyone that we did not expect to win the game.  Just walk out to midfield and shake the losers’ hands.”  Gary was truly expecting victory.  He got the fantastic upset and his team followed his instructions.  When the winning team runs out on the field after the game is over with some ridiculous exuberance or stupid ritual, they tell everyone that they are totally surprised that they won the game.

And it still is a game.  One team wins and one team loses every time.  It isn’t life and death.  It’s a game within the structure of a sport.  My Michigan team prides themselves in good sportsmanship.  How does planting a flag at Ohio Stadium show sportsmanship?  You pulled off an incredible upset.  The results speak for themselves.  Shake hands or calmly walk to your locker room. The “Game” is over, end of story.  In game seven of the 1965 World Series, Curt Flood slipped while trying to field a line drive in center field.  As a result, the Tigers took the lead and beat the Cardinals.  Curt felt bad about the physical error but his post game comment put it in perspective.  “I am truly sorry that this happened but its not my life and not my wife so I’m not going to worry about it.”  Curt recognized that even the seventh game of the World Series is still just a game.

I know, you’re thinking that college football has always been emotional.  Fans have been tearing down goal posts after big victories since Knute Rockne was a head coach.  In fact, I took part in this festivity when we beat Ohio State in Bo Schembechler’s inaugural season.  For several hours, I had been warming myself with a flask or two of schnapps.  Storming the field and attacking the goal posts seemed like the right thing to do when the Wolverines won.  The celebration for me was one sided.  I didn’t harass any Buckeye fans and I wasn’t nearly drunk enough to confront any of the OSU players.  I was just over joyed with the victory.  The fans stormed the field and the fans tore down the goal posts.  The football team was certainly celebrating but they were not going after anyone from Ohio or helping with the disassembly of the goal posts.  No poor sports here.

When we won the game.  The competition and confrontation was over.  For me, then and now, if we win a game, I am happy.  If we lose, even to the Useless Nuts from Ohio, I am sad.  I am sad all the way back to the tailgate.  Then I am happy again.  Hey, it’s just a game.  

So winning or losing, even if we are not the actual competitors, has been distorted.  

This perverse view of the consummate importance of winning is spilling over to other aspects of our lives.  We were playing what I thought was a friendly game of euchre while the Turkey was roasting for Thanksgiving.  After edging us out ten to nine, one of our opponents jumped up on the table and mooned us.  It took the edge off my appetite.  Missing a backhand on the pickle ball court could be grounds for divorce.  Not happy with your quarterback?  You have to go out and buy another one.  Any spending level is justified by winning ball games.  

No doubt, a number of Ohio State fans will be miserable until next November.  If we beat them again it could be dark for another year.  In fact, none of the fans are even participating in the competition that is causing all of the angst.  Sportsmanship is not part of the equation.  Winning is all that matters.

Michigan fans are no better. Going into the 2023 football season, I heard a lot of “Jim Harbaugh owes us a National Championship!  If he can’t deliver, we need to dump him”.  Jim didn’t owe us anything.  No one is entitled to winning, especially if they are not actually playing the game. Far more important than winning, Jim ran a clean program and he acted in the best interest of his players.  The really great irony is that Jim did deliver a championship and he dumped us.    

So I believe that flag planting and brawls are wrong and stupid.  I miss the days when I could watch a game and feel good when my team gave it their best shot, played by the rules and showed good sportsmanship.  Win or lose, the competition ended when the clock ran out.  Now, winning itself is not enough.  You have to plant your flag in your opponent’s logo.  A loss is truly one of the worst things that could happen to a bunch of people who are not even playing the game.   

I hope that when the NIL and Portal dust settles, I can find a place to watch some amateur sporting events.  After all, it’s still a game.