Two money stories

Dinner at a local restaurant with two owning class friends. Suzie's brother-in-law has asked them for money; he has gotten into financial trouble. A week prior Suzie asked me about loan management companies because I have done some personal loans and I asked how that worked out.

Brother-in-law lost his job a couple years ago and had been doing some contracting with the company. Then the company collapsed and so he lost his job and some investments he had made in the company. I can't remember what he's been doing for the last year or so (tinkering with his own biz idea? Looking for work but only at his prior pay level?) and I don't remember what his wife does but he has burned through all his savings and was about to be foreclosed on. He tried to sell his house but the deal fell through and that's when he called.

Mr. Suzie agreed to help. They looked over everything and decided 100K would get B-in-law through the sale of the house and with a 1 year runway to get things together. They poll family for 25K each (Mother and 3 siblings). One brother says no, the other sibling and mom say yes so they end up with 75K. They wrote up a loan document (I think at no interest) and transferred the cash. The question we pondered at dinner is: what next? What if brother doesn't sell his house? What if brother runs out of money again? I suggested that perhaps this is what family is supposed to be about, that perhaps he couch-surfs if it comes to that. Suzie wasn't keen on that idea, but she has a second home out of state and thought perhaps he could move there if it came to it. Brother is not a bad guy (not abusive, not alcoholic) which seems like the situation when I meet folks in social service situations where their family has drawn the line and refused to help anymore.

In our cross class meeting we got into a conversation about self-care vs other-care and as I write this I realize that's probably what the underlying conversation was but since it's at a higher economic level I didn't quite recognize it as such. Suzie is owning class and doesn't need to work and owns multiple houses, but to keep giving large subsidies to family would force her to liquidate something (not easy or advisable in this market) or threaten her current situation which is already under stress, so it is a similar conversation as to "how long does my brother couch-surf?", but it's hard to imagine an answer other than "as long as he needs to".

Conversation 2: someone I've loaned money to. I've since learned that the "applicable federal rate" is the official interest rate I need to lend at to avoid tax issues. We were about 2% higher so I offered to refinance her loan. We made up an excel spreadsheet and updated the numbers and it's just depressing. I financed her graduate degree and she's going to be making loan payments to me through 2024 because we agreed on a low monthly payment. She grew up with no money at all and clearly lives on a cash-flow basis rather than an asset basis. I've talked to her before about making higher payments and paying less interest over time but she resists. I decided this time, due to some recent good news, I'd forgive a chunk to move it forward and get it paid off by 2019 - two years after her kid graduates from high school. That date seemed to get her attention. As we talked about her finances she mentioned she also has credit card debt at 14%, much higher than our loan. I suggested it was more important to pay that down than pay our loan down and we did the numbers.

She estimated it would take her 5 years to pay off her credit card debt at the current time. Apparently the new legislation about statement formatting helps make this clear. I don't really use credit cards and I pay them online so I realized I haven't even seen the new statement format. I also pay them off every month when I do use them. I did the math and estimated that paying the same amount toward her credit card would save about $2,500 in interest, vs paying it on our loan would save about $2,100 in interest. I also suggested to her that the habit of not just carrying debt was the most important thing and that I'd like to see her pay off the credit card and work to use her savings as working capital, even as she's paying off our loan. She agreed, so we re-did the loan and I wrote her a check to pay towards her credit card. Unfortunately I got in a bit of a hurry because I knew her paid parking was running out (she was way less worried than I about this) so we didn't get into her proposed plan for renting a place because she's sick of her current place but it won't sell.

It's just interesting to me that with her and another friend I've helped out, when I really look at their finances it's very tough. It's not hopeless, both of them can cash-flow just above positive, so if they were super-disciplined they could possibly make it work. But there's little room to save or have any kind of fun and it's easy to get thrown off by an unexpected car repair or illness. The net result seems to be it's easy to accept that "I'll just never get ahead" as in fully out of debt and so they don't even try or hold that as a goal.

The Subtle Effects of Job Class on Relationships

What's a "normal" social schedule? A friend and I were chatting about this yesterday. Many of my friends are only able to have a social life on the weekends, whereas my friend insisted that most of his friends hang out weekday evenings and occasionally on the weekends. Additionally, many of my friends tend to plan in advance, scheduling social engagements at least a week or two or more ahead of time - it's the only way to make sure they happen. His friends, on the other hand, usually did stuff more spontaneously - they'd call up or text friends to see who wanted to do something that night or the next day.

When we dug deeper, we realized that most of the friends I was referring to worked at places like Microsoft or Boeing, or were lawyers or funders or government workers whereas his friends were mostly in the service industry (bartenders, bouncers, wait staff). Corporate workers and professionals tend to work Monday through Friday and get weekends off (and many of my friends actually work a lot of overtime on the week days they do work), so weekends are the best time to enjoy their social life. Whereas those who work in the service industry often have schedules that are all-over the map. They don't often have the luxury of planning their life in advance because they may only get their work schedule a week or two at a time.

My friend and I rarely talk about class, but we quickly realized that it was specifically because of job class that there was such a distinction between our different sets of friends. What I find fascinating is that we both grew up in middle class environments and started life out with very similar economic backgrounds, but as adults we made very different life choices - mostly due to differences in academic and career pursuits we ended up with very different circles of friends. And while these distinctions are often quite subtle, the fact is, the types of jobs we hold in this country have a huge impact on not only our actual income and therefore economic status, but also on how we're perceived in this society, and in our behaviors themselves. In fact, sometimes regardless of actual income (there are some who work in blue collar jobs who actually make more money that those in professional positions), we often attribute different class distinctions on people based on their profession alone. Professors, surgeons, lawyers, corporate managers, etc. are perceived very differently from custodians, baristas and beauticians.

If true happiness is about following your passion and spending your life working in a profession because you enjoy the work, yet our society still judges different professions based on a basically classist lens, then we still have a long way to go in achieving true equity.

the kmart bag

This morning I grabbed a plastic grocery store bag from underneath the sink for my tupperware lunch, pulled out a Kmart bag and instantly was transported to an era of class shame from my youth that I had not thought about for years, if not decades. Family outings to Kmart abounded for us during my coming up years. Each trip instigated in me great shame and fear of being discovered by classmates who, I was convinced, would run to school the next day and shout throughout the hallways my immigrant family’s shopping locations. I am pained by this for many reasons now as an almost 40 year old adult. My class shame at being associated with what Kmart apparently represented in the late 70s and early 80s makes more sense to me when I remember the shame and fear that permeated much of my youth, not just around class issues but around gender, sexuality, and race. All were inchoately working together to stunt and disgrace and embarrass. I do not remember ever hearing the words class, race, or gender until my first year of college—concepts that structured my world in its gripping silence and lack of open discourse. How might my life have been different if my family, ethnic community, school, teachers, counselors, or other adults had given words to the contradictions and complications of mine—and so many youths’—reality?

Being rich: dollars and friends

I spent this weekend visiting a friend who lives in Sun Valley for a weekend of skiing. I don't travel for skiing very often, I do most of my skiing at Stevens Pass, thanks to a weekday ski bus. If you've got a flexible schedule, weekdays are great because hardly anyone is there. The biggest reason I do the bus is that if I wasn't pre-paid and pledged to show up, it would be all too easy to hit the snooze two or three times when the alarm went off at 6, worry if the conditions are good enough, and end up not going.

That context alone might seem pretty soft to some, but it's not what inspired my recent experience of gratitude. I left my packing until Thursday morning and then had to rush to throw my things together. I took the ski bags down to the car where my gear was still from my weekday skiing. I bagged my skis, grabbed my helmet and then had to pause… something was missing. My boots!! I had left my boots on the ski bus! With less than an hour to pack and get to the airport, there was no way I could call the bus company, track down someone to find my boots and get them. Instead I'd just have to wait until the next week. Meantime, I'll have to head off to a rare out-of-town trip and not have my equipment but instead plan to rent. I emailed my friend a rueful heads-up, took a deep breath and let it go.

When I landed in Sun Valley, my friend picked me up and we went to a gear shop and just rented a package for 4 days. We didn't try to figure out what days we were going to ski or not, and I didn't worry about the price I just handed over the credit card and voila, the hassle of not having my gear was erased. In fact, they gave me a performance package so I actually got to try out some fun new gear. Before I had easy cashflow this sort of thing would have ruined my trip – the sub-optimality of paying for gear when I already own gear, the extra cost, the stress over trying to figure out how to spend the least amount of money. To just let it go, and pay for convenience, and get what I want without worrying about the price, was really nice, and that's what inspired my feeling of gratitude – it's good to be rich.

Having money was helpful, but the positive experience wasn't just about money – part of it too was having the local friend who could pick me up, and take me to a shop and say "this is the place to go". She also assumed the right thing to do was rent the fancy package for the length of my visit and not worry about it. Being able to let go of doubt and feeling a sense of belonging were things that I probably could have gotten another way, but dollars can definitely smooth hassles.