Our Kids' Lives: Regimented and Expensive

I spend a boatload of cash each year for my son to do something I did for free as a kid. And it annoys the crap out of me.

On Facebook a friend of mine recently posted the following article from the Washington Post:  “I send my kids to sleep-away camp to give them a competitive advantage in life.” These kind of headlines are meant to elicit a response. One camp might be thinking, “Holy crap. I’ve never sent my kids to over-night camp. Could I be denying his opportunity to get into an Ivy League school?” Another camp might think, “You’ve got to be kidding me. Whatever happened to sending kids to camp so that they have a great time?” 

The content of the essay is more thoughtful than the headline, and the takeaway is this: some of the basic things we did as kids for fun may have been beneficial for us in ways we didn’t even know, and it might behoove us as parents to – as the author Laura Clydesdale writes – opt out of the "things-to-put-on-the-college-application arms race.” Instead of creating walking, talking resumes, why not nourish thoughtful, creative, independent human beings? That’s really the goal. The fact that a thoughtful, creative and independent human being will invariably have a competitive edge over robotic peers is icing on the cake.

Several years ago I read an excellent book called “The Last Child in the Woods: Saving our Children from Nature-Deficit disorder.” In it author Richard Louv creates a compelling case for allowing our children to break out of the regimented lifestyles we’ve created for our kids – much of it indoors – and instead give them more access to nature, which not only feeds a child’s development, but can also help alleviate symptoms of ADD, obesity and other widespread ailments of today’s children. Even something as basic is going camping as a family can provide a huge benefit for children, and ultimately provide a huge benefit for nature, as people who have a relationship with nature are far more likely to fight to save it. Time spent at a camp, where a kid can break away from wired worlds, take some time to reflect, and experience activities that are foreign to a life in the city or suburbs, can be as mentally and physically beneficial as it is downright fun.

Now, here’s my beef with all of this. Today, every activity our children are engaged in seems to be planned and administered by adults, and overnight camp is of course no exception. This also means it costs money.

My son plays drums in a band. I played keyboard in a band when I was a teenager. In my son’s band, adults pick the players, adults pick the songs, adults pick who plays on which songs, adults provide the equipment, adults plan the gigs and adults provide logistics. In my band, adults did nothing except provide a space for practice and offer an occasional ride. My son’s band costs me thousands of dollars a year. My band cost me nothing except an occasional headache as we tried to figure out the lyrics to songs pre-Internet.

I learned a lot by being in a band with other teenagers. I learned how to compromise, I learned how to not overplay (though this took several years), I learned about how to get along with different types of people, and I learned about my limitations as a performer, as a musician, and – at times – as a human being. My son has learned some of these things too, but nothing that he’s experienced can compare to sitting in a room with four other musicians and saying, “Okay. We need to learn thirty songs and find a gig so that we can play them. Ready?” There’s no doubt in my mind that my experience was richer and more developmental than my son’s has been.

Similarly, I never went to camp as a child. But I did ride my bike constantly, I walked my dog through the expansive fields behind the middle school near my home, and I played in numerous forests in my hometown, where I would make up games with my friends, climb trees, get into arguments, injure myself or others, and – on a particularly lucky day - discover a Penthouse that a classmate kept hidden in the hallow of a tree. Again, I did this for free. And as cool and rich as my children’s camp experiences have been all these years, I’m not sure the adult-supervised activities provided the same benefit as my independent ventures did.

What’s particularly problematic is this: unless you reach critical mass, “opting-out” simply means your kid spends time alone (which does have some benefits but also its limitations). I would like my son to quit his organized, adult-supervised band, but unless I can convince other parents to do the same, it will lead to a band of one. Not so much fun. Breaking away from regimentation only works when you convince others to do the same.

So what’s the answer? Well, I am going to make a concerted appeal to the parents of my son’s band to quit organized music and have our sons and daughters move forward on their own. Will I be successful? I kind of doubt it. But our kids know how to play their instruments, they know fellow musicians, and now it’s time to sink or swim. My son will be richer for it, and if I succeed, so will his parents.

Why I'm Boycotting this year's Olympics

Short answer? Because it's a cesspool of corruption. But by that measure I should also be boycotting American politics, professional sports and financial investing. 

No, there are a multitude of reasons. I just finished reading Daniel James Brown's bestseller, Boys in the Boat, a fabulous read about the University of Washington rowing team who raced for gold at the 1936 summer Olympics in Berlin, and in it Brown deftly interweaves events on both sides of the Atlantic, including the enormous efforts Germany took to promote its less unseemly side. In short, the whole event was a ruse - a propaganda stunt - to show the world just how civilized the Germans were in the midst of increasing international scrutiny. And to a lesser extent, that's what the Olympics have been ever since. Whether it's the Sochi Winter Games of 2014 or the 2008 Summer Games in Beijing, the Olympics have become - in the words of reporter Binyamin Appelbaum from his 2014 New York Times piece - "a debutante’s ball for emerging economies." You can bet if Chicago had won the right to host the 2016 Olympics, they would have steered people clear of the poor, crime-ridden areas of Chicago and diverted funds (what funds? Illinois is broke!) from wherever politicians could get their grubby little hands on. You can also bet that my family and I would be someplace other than Chicago for the next two weeks. (Would someone have paid good money to rent a 90 year-old bungalow fifteen miles west of The Loop?)

CBS news recently published an on-line piece called "Why hosting the Olympics is a Terrible Idea," and in it they describe the familiar plagues associated with hosting an Olympic games, from stifling debt to environmental disasters to taking funds from more important concerns. Cities are beginning to take note. While eleven cities bid on the 2004 summer Olympics, only five offered to host the 2020 games. True, sometimes concerns about an upcoming Olympics are overblown, but the bottom line is hosting the Olympics is expensive, and according to aforementioned New York Times piece, there's no evidence to suggest that the economies of host cities benefit from the brief, worldwide attention.

Which brings us to an interesting Op Ed piece in the Washington Post about holding the Olympics in the same city every four years. Paul Glastris cites a recent study by the University of Oxford that concluded "every Summer and Winter Olympics from 1960 to 2016 experienced massive cost overruns averaging 156 percent." Glastris concludes that rather than allowing cities to make the same rookie mistakes every four years, we should "pick a city or country to be the permanent host — one each for the Summer and Winter Olympics." The International Olympic Committee will likely come to a different conclusion.

And then there are of course other issues, from the 2002's Olympic bid scandal, this year's Russian Olympic ban, the refusal of countries to boycott Olympics hosted by oppressive regimes, the disparity of investment between rich and poor countries, the taking advantage of the poorer among us. The whole enterprise is a reminder of the world's haves and have-nots, and the Olympics should be anything but that.

So I'm boycotting this year's Olympics. Sure, I remember long summer days in 1984 when I'd wake up, leave the TV on from morning until night, fall in love with Mary Lou Retton and watch Carol Lewis kick butt and take names. Fond memories. But it's 2016, and reality is simply this: I've got other shit that needs to get done.

Live Performing Woes, part 2

A few weeks ago I wrote about how performing live music – and industry already on life-support – is additional burdened by restaurant and club owners having to pay royalty fees  to musicians who are already rich and – more and more often – dead. I spoke with a musician last week who said that back in the 80s a good musician would have to be paid a minimum of $250 just to hold a Saturday night. That’s no longer the case.  Save for the big acts, live music earns a fraction of what it used to earn, and the strict enforcement of music licensing fees aren’t helping matters.

Or perhaps I have it wrong. I received a number of terrific comments for musicians and non-musicians alike, and the take away for me is that not everyone agrees with my conclusions and even those who do aren’t sure how to rectify the problem. 

One reader questioned whether small establishments are being paranoid to think that the big music publishing organizations are really going to charge fees for not following the rules. I wish that were the case, but unfortunately there are well-publicized examples of restaurants and clubs getting hit with fees from ASCAP, BMI and the like.

A friend of mine shared this little tidbit: a coffee house here in Elmhurst no longer allows musicians to play cover songs because they find paying the ASCAP fees prohibitive.  Another musician said that his band once had to change its playbill from “rock and roll covers of your favorite bands” to “live music” (or something equally generic) because of concerns of music licensing fees.

Other musicians noted how unfairly stacked the music industry is against the “little guy,” not only when it comes to live performing, but in the realm of downloads, streams and radio play.  As he says, “more opportunities equals harder to track,” and companies like ASCAP and BMI definitely have their hands full when it comes to figuring out how to collect fees for all of the different mediums out there. I couldn’t agree more. I believe that listening to a recording should garner income. I’m not as convinced about live performing, nor was this reader. After all, imagine if the Top Ten Club in Hamburg or the Cavern Club in Liverpool had been hounded by music royalty collection firms. Would The Beatles have been able to make a go of it?

But perhaps this view is erroneous, because it’s based on an entirely different system. One reader commented that back in the day everyone was working together: musicians would pay the union, the union would ensure that musicians were being paid properly, the clubs paid fees to the publishing companies, and people paid for live music. Today, people don’t want to pay for music unless it’s big time acts, and therefore club owners don’t want to pay fees (or musicians). This person wrote: “If successful songwriters remembered what it was like to play songs they loved for peanuts and (if) record companies kicked a little more back to the writer/artist they wouldn’t feel the need to squeeze as much as possible out of the everyday live musicians.”

But the model of people paying for music is “dead and buried,” lamented another reader. The songs are now “the fuel for the touring engine” whereas several decades ago the reverse was true. Fewer people are playing out on the weekends and they are earning less than ever, so the music collection companies must really be desperate to go after the little guys.

Another reader wrote that “both the bar and performers make money from playing music someone else wrote,” and he understands why fees should be collected. He does feel that the fees are out of proportion with the income that’s being generated, however. Another reader agreed, stating that “others should not be free to profit off your work without some remuneration to the owner,” but was at a loss as to how the current model can be changed.  He thought perhaps some percentage of total revenue generated from covering music should be paid as music royalties.

These were all welcome comments, and though I might wish that today’s business model were similar to that of decades ago, the time of musicians, music unions and clubs all working together to give patrons a quality live performance are largely gone. It all comes back to the consumer: if people aren’t willing to pay for recorded music and if they aren’t willing to pay a cover for a live band, then the whole system breaks down. What remains is a poor replacement. Good musicians – and some really, really bad ones, too – are being paid poorly for club owners who are probably being paid poorly but who still have to pay fees for already-wealthy musicians who no longer make money off of their old catalog because consumers are downloading it for free.

Say it with me: “Oy!”

Financial Advice for my Children

I’ve made a few (hundred) bone-headed financial blunders in my past, probably starting with my purchase of a poorly made Yes t-shirt in 1984, but I wish I could say my financial ineptitude ended there. Within the last two years I was late with a credit card payment (really dumb) and didn’t consider the tax implications of some of my family’s finances (also dumb, but more forgivable, unless you conclude that we should have hired an accountant years ago and called it a day). But of course blunders can be and should be avoided. Last week I wrote about the essay Neal Gabler authored in the May issue of The Atlantic, wherein he too admits to his financial gaffes, albeit in the context of a larger national epidemic of financial illiteracy. But here’s the thing: financial illiteracy isn’t a condition. It’s a choice, at least for those who know better (and Gabler certainly does). Yes, I’ve made my mistakes, but I’ve kept reading and over time have done less harm and more good for my family’s finances. 

(Of course, someone could simply argue, “You want to do good for your family’s finances? Get a fricking job!” Fortunately, my wife is not among those someones.)

But even those who've managed to do a fairly good job of staying on top of the myriad of investment choices, saving maxims and cryptic tax laws might find themselves doing a piss-poor job of passing on that education to their children. I’ve found that while my parents had good sense and certainly taught me the value of a buck, most of my education was self-initiated by way of living and screwing up royally from time to time. I would like to see if I can spare my children of too much learning by living, because it seems as though these days the stakes are a bit higher. Growth is down, good jobs are more scarce, college costs are higher, housing is through the roof. It’s all gotten a little more insane.

So, recognizing that I’m offering nothing new here that hasn’t already been stated countless times before, I offer my children my twenty pieces of financial advice.

1)      Become educated. Hey, some people might make fun of Suzy Orman, but the gal can teach. Clark Howard is also a personal favorite. There is a ton of material out there, whether on TV, radio shows, books, DVDs or simply the Internet. I started way back with the books The Wealthy Barber and The Millionaire Next Door and went on from there. Sometimes it helps to read a well-written book instead of plowing through dozens of articles on-line. Whatever method you choose, there is no excuse to be financially illiterate.

2)      Avoid dept.  Aside from a mortgage, a car, a personal business investment, and (maybe) higher education, never pay for something you can’t pay off at the end of the month. Never.  

3)      Start saving now, gradually building to an amount equal to six month’s salary for emergencies. Yes, it will take time to establish such a fund. Start saving now. Even setting aside a few hundred dollars a month for a while will be helpful. And don’t settle for the crap interest rates that your bank offers. Consider looking at online banking (Barclays is currently paying 1%) or joining a credit union. 

4)      Always pay off your credit card bills each month. Always. I’ve missed I think three in my life, and that’s three too many.

5)      Start saving for your retirement immediately. Parents, you can open up an IRA for your child and invest any money they make (and that you claim on their taxes), even if they personally keep what they earn. I opened up IRAs at eTrade for my daughters when they turned sixteen and managed to match what they earned for a couple of years. Now that they’re in college they certainly can’t afford to invest all they earn, but even a small percentage is preferable to nothing. Five percent would be a nice place to start. Once you have access to a 401K that has a company match, max out your 401k up to the point of the company match, and then invest the rest in a Roth IRA, if eligible.

6)      Once you do start saving for retirement, never, ever, ever (this is for you, Neil Gabler) take out money from your 401k for something as stupid as a wedding. By definition, spending a ton of money on a wedding, a bar/bat mitzvah, a confirmation or quinceanera is stupid. Paying for it with a 401K is beyond stupid.  It’s colossally moronic.

7)      Stop eating out so much. You have an oven and a stove. Use them. When you do eat out, if things are tight play it smart and don’t pay for a $10 martini. Go to BYOB places, or pack a picnic and watch a free concert in the park. You can live well without living like a king.

8)      Don’t indulge in every desire, and if you do want to indulge in something, have a plan. If it’s going to take six months of saving before you can buy that musical instrument or take that vacation, then save for six months.

9)      Try not to take any loans out for college, but if you have to, don’t graduate with more than $30,000 in loans, and I would argue that this should only be for majors that will definitely result in a good paying job. $30K in loans means $333 a month for ten years, before rent, before food, before insurance, before utilities, before anything else. That’s a lot of money if you’re intending to major in political science. I can’t recommended highly enough Frank Palmasani’s book Right College, Right Price and I wish many of the parents I’ve spoken to had read it before sending their kids to college that will result in a degree and $80,000 of debt. You’re not doing your kids any favors by having them graduate with whopping debt.

10)   Don’t buy life insurance unless you have people dependent on your income, but once you do have dependents, buy a long-term term life policy while you’re young and healthy.  Lock it in.

11)   Once you have a legal partner and/or dependents, suck it up and pay an attorney for a will.  Don’t leave the government in charge of your death and your assets.

12)   Don’t get divorced. Seriously. Yes, the idea of marriage being a financial partnership isn’t sexy, but if you can avoid leaving your partner, you’ll be way better off financially. Of course, if there’s abuse of any kind, get the fuck out. But if not, see if you can work it out.

13)   Speaking of marriage, don’t wait until the wedding day to find out your partner has $150K in debt (think it doesn’t matter, that love conquers all? Think again.) or wants to open up a pizza joint in Little Italy. For goodness sake, talk about some of this stuff while you’re deciding to spend the rest of your lives with each other.

14)   Budget. Back in the day my wife kept a written log in a notebook of various things we were saving for (a wedding – which we paid for – musical instruments, a down payment on a home, etc.). Of course, once I transferred this log into Excel it became my responsibility, so my next piece of advice is: don’t transfer your wife’s written log into Excel.

15)   Give to charity. You’ve got to be one sorry sack not to give some of your time and money to others in need. And I don’t mean donating your old clothing. I mean feeding the hungry, housing the homeless, protecting wildlife, teaching a child or an adult. Help someone other than yourself.

16)   Don’t lease a car and don’t buy a new car, at least not until you’re in good shape financially. You could consider leasing if you’re someone who truly gets pleasure out of having a new car and who wants one every couple of years. Most of us can get by without this.

17)   Speaking of cars, drive your car until it costs more per year to repair it than it does to buy a newer used car.

18)   And one more about cars – don’t skimp on the obvious: change oil according to manufacturer’s instructions, check brakes and tires regularly and stay on top of other maintenance issues.

19)   Of course, the same can be said for a home once you own one. Take care of it. That doesn’t mean indulging in additions and renovations you can’t afford, but at least maintain the property.

20)   Speaking of mortgages, when rates are low, lock in and pay the minimum. If rates go up at some point (and they will) lock in but pay attention and refinance when appropriate (and don’t pay for the refi). I refinanced I think seven times in nine years when we first moved to Illinois.

So there you are. I’ll probably think of another twenty in the next few weeks, but this is a good place to start. Children, read and take heed. 

Oh, The Financial Mistakes We Make (part 1)

Want to have a quick lesson in real-life economics? Check out the May issue of The Atlantic and read Neal Gabler’s essay, “The Secret Shame of Middle-Class Americans,” in which he summarizes the financial plight of many Americans – which is enlightening enough – but then boldly summarizes his own life and the mistakes he’s made that helped lead to his rather precarious financial position. I admire his candor and plan to share it with all three of my children because his story reads like a what-not-to-do manual. If you ever wonder how someone who makes good money can become a financial mess, this is the article to read.  Gabler did virtually everything wrong, and though I suspect there are many other people who’ve gone down similar paths, he may have undermined his argument by lumping his experience into those millions of Americans who’ve done everything right yet still find themselves in financial dire straight. Gabler has no such claim.

(After you finish the article, scan through the comments section over a glass of wine or two or three – some are critical, some are empathetic, some are self-righteous, but nearly all are illuminating.)

The essay begins with frightening statistics about American’s lack of savings, lack of liquidity and lack of assets. Nearly half of Americans couldn’t cover a $1000 emergency room visit or $500 car repair out of their own pockets. This should scare the hell out of all of us, because how long can a society thrive and survive when half its population is “financially fragile”? These are real problems with real ramifications, no matter what your financial situation, and I suspect it’s why we find ourselves in such a heated and unexpected political campaign this year.

But then Gabler takes the courageous step of telling us his story, and in it he comes clean. He writes, “I am a financial illiterate, or worse—an ignoramus.” He’s not joking, and it’s troubling because he – like many Americans – not only hasn’t learned from his mistakes, he seems determined not to learn from them, as if being financially illiterate is a condition instead of a choice. In a world where TV and radio have made mini-celebrities out of financial self-help gurus like Suzy Orman, Dave Ramsey and Clark Howard, there’s no excuse not to become at least somewhat educated on financial matters. It’s as important – hell, it’s more important – than learning how to swim or throw a curve ball or learn a Bach prelude.

As parents we need to do much more to help our kids grow up to be financially-functioning adults. I’m going to do my part by forwarding Gabler’s article to my kids and I encourage you to do the same, but I also recognize that the odds of them actually reading the article are low. So next week I’m going to write a quick summary of financial no-brainers that I hope encapsulates all the what-not-to-do’s that Gabler did (and probably many he did not do) and then discuss it with my kids over dinner.  Stay tuned for part two...