Conventional Wisdom

Every Once in a While, (Does this replace Once Upon a Time) I read an article that causes me to stop and rethink some of the conventional wisdom that I heard growing up. For Example:

GET A JOB AND KEEP IT - There was once a time when employers hired people and did their best to keep them through thick and thin. You could go to work for somebody and make a career out of it. Other than the Post Office, Police Department and Fire Departments that is not nearly as true as it was. Even our local School Board who kept people I would have fired is less likely to keep people and hire and fire to make budget. Be prepared to move from Company to Company to move up.

BUY A HOUSE - If you are going to change jobs more often, it doesn't make sense to buy a house at every stop. The old days of appreciation in the housing market may be over and renting might be an option that gives you more freedom. I can't imagine living in an area where a house costs several hundred Thousand and needing to sell it and move. That once stable thing in your life could be the anchor that sinks your financial plans. On the other hand, if you can afford to put 20% down and pay it off in 15 years buying a house might be for you. Those qualifiers will keep a lot of people out of owning.

GET A COLLEGE DEGREE - There are a bunch of jobs out there today where well qualified workers can make a good living without the benefit of a college degree. Our neighbor's boy went to a local lineman's school and got hired at the end of his second semester because of the need for people to run electric lines. He is an apprentice but started well over $10.00 per hour and will be in the $20.00 per hour at the end of this year. There are similar opportunities in the automotive repair, air conditioning area and I think solar and wind energy areas will soon have a lot of opportunities. I think there is a whole new ballgame starting in building that retrofits, re insulates and makes property more energy efficient.

BUY A NEW CAR - I am sure that in the era of the 50's, 60's and even into the 70's the life span of a car was shorter and it made sense to trade in your vehicle every couple of years to have dependable transportation. More and more the cars are lasting 200,000 miles and it makes sense to buy a good used car and drive it until the wheels fall off. Yes, I do support proper maintenance on your cars. The depreciation a new car suffers the first year can run several thousand dollars. Add to that cost the high tax rate and sales tax and it could easily be as much as we paid for houses a couple of years back. Those 2008 cars just off lease that run about $12,000 are a bargain compared to the new cars at nearer $20,000. Dollar per mile is a lot more important than smiles per miles.

INCOME MUST BE GREATER THAN OR EQUAL TO OUTGO - This is one of the few things I don't disagree with. I think that having a life where you buy those things that you need not the things you want will make you happy in the long run. Wanting what you have not getting what you want is more often good enough. For those of you starting out in life, this equation might be off for a year or two but in the long haul you must pay attention.

BUY STOCK - The problem with this is who will buy it when I retire? I don't see a lot of the kids out there heavily investing in the stock market to keep it high so I can get my money back. I also have been a miserable picker in this arena. Hell, even my Blue Chip GM stock that paid dividends of 50 cents per quarter for years has tanked.

Tomorrow I will write about some ideas that have worked for me. Got to go call my momma, that's always good advice.

MUD