The Failures of Frank Lloyd Wright

Arguably one of the most influential architects of the 20th Century, Frank Lloyd Wright's career was marked with one failure after another.

As I noted in an earlier posting, Failure is Always an Option, and even inevitable.  And yet the mainstream media, that lovely source of poor normative cues that lead to depression, would have you think otherwise.  They want you to believe that there are supermen in the world, who do no wrong and never make mistakes.   And this is an asinine proposition, and largely what is wrong with things in the world today.

Our politicians and public officials are held to standards so high, that no one could meet them.  People like Washington, Jefferson, and even Lincoln would have been sacked early in their careers, by today's standards.  After the Battle of New York, calls would cry out for replacement of the "incompetent" Washington - if he were held to today's standards.  And Jefferson's sexual peccadilloes would surely have gotten him impeached, if we held him to the standards applied to Bill Clinton.  And Lincoln?  A failed lawyer and businessman who lost eight elections.  By today's standards, he would be relegated to obscurity.

What about Wright?  We laud him as a great architect, and if you are in New York, you really should see the Guggenheim, the crowning achievement of a career that spanned over 70 years.  Yet the Guggenheim has its flaws, as does Fallingwater, his other signature work.  Recent renovations at Taliesin reveal foundations consisting of little more than beams set on raw earth, or in some case, ashes.  In another celebrated project, he argued with his own son on the suitability of using "decomposed granite" in retaining walls without reinforcement.   Much of what he designed had structural flaws, roofs that leaked, foundations that cracked.

And his life was filled with controversy and tragedy - starting early in his career, when he moonlighted for clients in addition to his day job with another architectural firm.  He was controversial, and often his designs were ridiculed and despised.   Many of his greatest projects were never built.   Others, unappreciated, were torn down or remodeled beyond recognition.

But yet, in spite of all of this, he is recognized today as a genius and a trend-setter whose visions are part of the architectural landscape today.  And yet, his life was filled with setbacks, failure, and mis-steps.  He was not a failure by any means.   But successful people fail, all the time.

The media paints a different picture of the great and the near-great.   According to their myopic view, they never fail - just pile one success atop another, until they are at the top of the heap.  But it ain't really so.

Even the best batters strike out occasion - actually about half the time.  And even the best pitchers can't always pitch a perfect game.   People make mistakes, and still succeed.   No one, not a human being, anyway, can be perfect all the time.

So what is the point of all this?  Well a few things, I think.

1.  Expect failure in your life - expect things to not work out as you plan.  This is the norm.

2.  Expect yourself to be weak on occasion and guard against this by setting up your finances to avoid weakness.  Gambling responsibly is a nice theory - not going into a Casino at all is a better option.  Similarly, relying on being "perfect" all the time with regard to a high-interest rate credit card is just asking for trouble.  Get a low interest rate one, so you are better off when the inevitable happens.

3.  Don't be depressed when you make mistakes, succumb to human weaknesses, or just fuck everything up royally.  We've all done it (boy howdy, I have!) and still come out the other end of foreclosure, being fired, flunking out, getting divorced - or whatever - pretty well intact.  The media touts being perfect all the time, because they want you to be depressed.  They want you to think there is something "wrong" with you, as you are not perfect like the people on TeeVee.   The want you to be depressed.  Depressed people make excellent consumers, particularly for media.

4.  Expect weakness and imperfection in others.   When a political candidate makes a slip of the tongue, don't castigate him.   But think hard about the opponent who intentionally sets out to make a big deal of it.   Who is pretending to be perfect (when we know he is not?) and who is admitting to human weakness?  Similarly, expecting perfection in our spouses is not realistic.  Having a laundry list of "if he ever....I'm out of here!" is not the sign of a strong marriage or realistic expectations.

The bottom line is you can fail - and fail a lot - and still succeed.   This does not mean you should intentionally set out to fail, but rather expect failure as a part of life and try to learn from it.

Probably the only "mistake" you can make is to never learn from your mistakes, I guess.

But I could be wrong about that....

Rule of Thumb

 As a rule of thumb, it is pretty safe to assume that any bargain offered to the poor is a bad bargain.  As a corollary, any bargain that is hyped or advertised heavily is usually also a bad bargain.

 
As I noted in a comment in response to an earlier posting, my trepidation about the Dollar Store is this:

1. They present bargains to the poor.

2. The poor are usually presented with the worst sort of bargains.

3. Ergo, anything at the Dollar Store is likely to be a bad bargain, as it is something offered to the poor - who get the shittiest bargains around.

This is not to say there no good bargains there, only that, in general, there are likely to be some real stinkers - and my experience so far has proven this right.  You can sell the poor anything - so they do.

Rules of thumb always have exceptions, of course.  But in general, they can be useful in helping you parse data and make decisions without having to yank out a calculator every 45 seconds.

And as a rule of thumb, buying anything that is targeted toward the poor is probably a bad bet.  Why?  Because the poor get the worst sort of deals imaginable, in terms of bargains, interest rates, and the like.

So you know off the bat, that Payday loans, rent-to-own furniture, pawn shops, title pawn loans, rent-to-own bling rims, check cashing stores, and the like are all bad bargains, without even having to resort to doing the math (which I have here, in the past, and shown them to be bad bargains).   They are hyped and advertised heavily, and are located in lower-class, lower-income neighborhoods.

So, if you want to stay out of trouble, stay out of the places the poor go for bargains, because, chances are, they will not be good bargains.  And the one or two possible good bargains that might be there (but likely aren't) are not worth the hassle or risk.

A similar Rule-Of-Thumb can be applied to anything advertised on the radio, particularly those loud blaring and deceptive ads.  You know, the diet plan that purports to be an "interview" with a local doctor.  Or the car ad that rips through a paragraph of "fine print" at the end of the ad.   Almost anything heavily advertised is a bad bet, simply because the cost of advertising is padding the price.

But, alas, many of us are raging true believers.  "Say, maybe they are having closeout deals on new Hyundais this labor-day weekend!  And free hotdogs for the kiddies!"   But you go there, and 10 hours later, tired and worn out (with two very cranky kids) you come home with the temp tags on a car or SUV you never intended to buy, at a staggering interest rate, at a price that is, well, you don't even know what the price was, exactly.

Sometimes the best bargains are rarely advertised.   The wireless companies will beat you over the head with their "low low monthly rates!" of "only" $39.99 (some restrictions apply, taxes, fee, phone and wireless plan, extra).   Meanwhile, AT&T never even advertises its GoPhone plan, which, for someone like me who rarely calls, works out to about $100 a year.  For that $39.99 you could talk 400 minutes a month - with no added fees.

But that doesn't get a blaring ad, does it?

How Bad News Sells

This afternoon on MSNBC:

Stocks see biggest weekly decline of year

By msnbc.com news services

Stocks finished mostly higher Friday as rising energy shares offset early weakness in the market, but both the S&P 500 and the Dow Jones industrial average saw their biggest weekly decline of the year.

Equities fell early after data showed a drop in single-family home sales, but a rebound in energy and material shares from their slump in the previous session, helped Wall Street overcome those losses. A rise in crude oil prices gave upside support to the energy sector.
The benchmark S&P 500 is down over 1 percent for the week, though it remains up 10 percent for the year and up more than 25 percent from its October closing low.

It was the worst stock market performance since Dec. 16, CNBC said.

OK,  so reading this article, what do you take away from it?

1.  The stock market is tanking, once again!

2.  This has been a bad year for stocks!

3.  The stock market is doing even worse than it was in December!

The Answer?

None of the above.

I've said it before and I'll say it again:  Bad news sells.   And if you go through media reports on the economy for the last 50 years, you'd think the Dow Jones Industrial Average was down to say, 50 by now. 

Every day you are hammered with "bad news" of one sort of another, or made-up metrics like the one quoted above.  Declines are hyped, but days, weeks, months, and years of steady gains are ignored, as are things like dividends (unless Apple decides to pay them).

Why was this week the "worst week of this year?"

Answer:   Because this has been a ripping good year for stocks, so far, and this mediocre week, which seems stellar by 2008-2011 standards, is only Ho-Hum for 2012.

In December, the Dow was as low as 11,500.  Today it is at 13,000 - an 11% gain!  Annualized, this would be a 46% gain from the nadir of December 2011.

Yes, the market is ripping along.   But you would never guess that from the story above, would you?

So, let me ask you again.  Why do you watch TeeVee?  Why do you believe stories, like the "human flies like bird" video, that was put up yesterday by both MSNBC and CNN when it had already been discredited as a HOAX online?

Getting financial advices and normative cues from the media is to be fed a parcel of lies and bad bets.

Today also, on MSNBC, "Man offers house for Facebook Stock!"

Sigh.

They never give up, do they?

And yes, Facebook stock is a shitty bet.

And you know this, if only because MSNBC is hyping the snot out of it.

Cyber-Paranoia

The serial rapist is coming for YOU!  Or maybe Obama, I can't remember which.

You get an e-mail from a friend.   In it, or in a link attached to it, is an alarming message!   "Please pass this on!" the e-mail pleads, "The mainstream media won't report this, because they don't want to alarm anyone!  But if it saves one life, it is worth it!"

The attachment or forwarded message then goes on to tout some alarming trend or event.   They can take on one of a number of forms.

1.  The Psycho Rapist/Slasher:  Women are being victimized in the mall by rapists waiting under your car, or spraying you with perfume samples, or whatever.

2.  The Financial Ripoff:  There is a new scam going around where people are going to steal your identity.  Better cover up your license plates!

3.  The Political Hack:   Clinton/Bush/Obama is going to declare Martial Law and take away our Guns/Gay Marriages and we know this is true as a Wal-Mart truck overturned and all the "Martial Law" signs spilled out.

4.  The Missing Child:  Little Tiffany has been snatched from the trailer park!  Pass this on!  We all need to drop what we are doing and go look for little Tiffany!  Nine times out of Ten, little Tiffany doesn't exist, and in the other one time, either she was found 5 years ago, or she was a teenaged runaway.


5.  The Helpful Tip:  Not really a fear-seller, but the message offers a helpful tip to let you in on a little secret in life.  You can take apart a lantern battery and get a zillion AA batteries for pennies!


Let me just reiterate that none of these types of messages are true at all.  So why do people send them?  There are two reasons.   First, people like to be able to share special inside secrets for those in-the-know.   Everyone wants to know about the secret backdoor entrance to Disney World, where there is no line, or how to get a special deal that the rest of the plebes aren't part of.   And hoarding this supposed information and parceling it out to special friends is something that people like to do.  "I'll let you in on a little secret..." people say.

But of course, there aren't any little secrets.   And the best advice is often common sense - but no one wants to hear that, and no one feels "special" dispensing that, do they?

The second reason is just fear-mongering.    The political types want people to be afraid of Clinton/Bush/Obama, and the fact that they use the same scare-stories about both Republican and Democratic candidates is telling.  Fear also sells, too.   Crank up the fear, you crank up gun and alarm system sales.

Fear of the Mall Slasher is one reason most cars today only unlock the driver's door first, and then unlock the remaining doors after a second push of the button.    We don't want to let the Mall Slasher into our car!  No one bothers to think that the Mall slasher could just grab our key fob, open the car, and force us into it, if they really wanted to.   But no, that is not the case, and this fear is now engineered into our cars.

What is the harm in these messages?  A number of things.  To begin with, as I have noted before, people's perception of crime has always been a lot higher than the actual incidence of it.  Think about it - what are about half the TeeVee dramas about?  Crime.   As a result, people live in fear - unnecessary fear - which leads to depression and learned helplessness.

This level of fear also makes it easier to isolate people and set them against one another (the old "divide and conquer" technique) so that the average Joe Citizen doesn't think his real enemies are perhaps the people slowly bleeding him to death financially, but the unseen mugger who is ready to steal his wallet.

It is the old distraction game, used on a widespread social-engineering basis.   Don't worry about the nice man at the car dealer who is ripping you off to the tune of $5000 or more by leasing you a car, worry about that suspicious looking young black man in the hoodie.  Right?

And by the way, you should lease a brand-new car, so you don't break down on some deserted road and be killed by the Serial Slasher or robbed by the aforementioned Young Black Man in a Hoodie.  Right?  That is how fear can be used to persuade you to make a poor economic decision.   And yes, I have had so-called rational people tell me this, with a straight face. 

Fear bootstraps upon itself and sells a lot of product.   People hunker down in their homes and send out for Pizza, rather than interact with a society at large.

So how do you avoid this fear and why should you?

Well, the easiest way to avoid it is to not watch television.   Despite what these e-mails say about the "mainstream media" not reporting fear-mongering, that is just about all they do.   The second thing to do is not read or believe these fear messages, and if a "friend" sends these to you, find a new friend.  Seriously, people like that are just a drag on your psyche, and you are better off without their constant fear-mongering entirely.

What is the advantage of not being afraid all the time?   It sort of seems self-evident.   But you can perceive the world as it really is, not as the fear-mongers want you to.   And no, this doesn't mean you will start walking though a public housing project and thinking "Gee, look at all the nice friendly people!" but instead, stop thinking that muggers and rapists are behind every corner of your suburban enclave.

Acting rational in an irrational world simply means being able to perceive reality for what it is, and not what it isn't.   Today, many philosophers tout the idea that reality or truth is a relative thing, and that there is no underlying reality or truth, only different people's perception of it.  This is, of course, utter bullshit, and philosophers are not to be trusted with the truth.

As I noted in an earlier post, you can jump of the Empire State Building and claim to be taking a shortcut by avoiding the elevator - and you can delude yourself with this notion for a moment or two.   But then reality, in the form of a concrete sidewalk, intervenes, and ruins the whole illusion.  Suddenly, the idea of relative truth or perception turns out to be nonsense.

The people who are the most successful in the world - these hated 1%'ers - are not necessarily rich to begin with, smart, or even lucky.   No, the common denominator is, aside from wanting it badly enough, the ability to perceive reality more clearly than anyone else.   These are the ones who bought real estate when it was cheap - and sold out before the crash.  They saw reality for what it was, which the rest of us only see today in retrospect.   The better you can perceive reality from bullshit, the wealthier and happier you will be.

The more you chase after delusions - or live in fear - the worse off you will be.

And right there is why they sell fear - it distorts your perception of reality and gets you to act in ways that are against your own self-interest.  Combined with the television and the entire Carnival of distractions, the consumer is so disoriented, dazed, and confused, that he is easy pickings for the pickpockets of the consumer economy.

The first step to walking in the light, is to walk away from fear.

Auto Repairs

Auto repairs are getting expensive, which is one reason a lot of people use to justify buying a brand-new car.  But with a little intelligence, they need not be pricey.   This does not mean they are free.

This is one posting where I don't feel sorry for either party on either side of the transaction.  People whine and complain about car repair costs, expecting them to be done for free.  And of course, they fail to educate themselves, take care of their car, or choose the proper place to have the car repaired.   Many repair shops feed upon this ignorance and charge "what the market will bear" in terms of repair charges.   And often, the market will bear a lot.   But running a repair shop isn't cheap, and fixing a car is a far more costlier proposition than you might think.   Understanding both sides of the issue is key.

And one problem, in today's crazy disposable economy, is that repair costs easily can exceed replacement costs, for many consumer items.  I recently repaired the shifters on my old TREK bicycle.  It turned out the grease used in assembly hardened over time, causing a small pawl to stick in position, preventing the shifter from working.

Figuring out this problem required disassembling the tiny shifter (held together with impossibly tiny screws) and taking apart its clockwork mechanism (with no fewer than three tightly wound springs), discerning how it was supposed to work, figuring out the solution (using WD-40 to soften the grease to get the pawl to move again) and then reassembling, without forgetting any parts.

Once I did this, fixing the remaining shifters (on two bikes) was simple.  Remove the access cover, spray liberally with WD-40.  I don't know why I waited three years to fix this.   But this illustrates how repairing anything can be time consuming - unless you've done the same repair before.  Which is one reason why going to a specialist for your make and model car can be a good idea.

But it also illustrates how the labor can exceed the market value of the product.   If I had taken this bike to the upper-end bike shop on Rich People's Island (a ripoff- never go there!) they would have likely recommended replacing the shifters, or recommended buying a new bike.  Either way, their labor charges would have exceeded the value of the bicycles.  These people charge $50 to fix a flat tire, and I am not kidding.   On a bicycle.  And people go there.    People are idiots.

But this bicycle example illustrates the nature of repair of anything, and how being handy with tools (and being patient) can save a lot of time and money.  And that right there is one reason you should leave older cars to people who are handy with tools.   Because while I might be able to fix things, if you aren't handy, you'll just throw an ocean of money at something and end up very, very unhappy.

So what are the "secrets" to keeping car repairs reasonable?   Here are a few tips:

1.  Once Out of Warranty, Don't Go to the Dealer:   New car dealers make their money in the repair shop.   In many cases, they make only a few hundred dollars on the sale of a new car.  They hope to make up the difference in the warranty repairs, trade-in and used car sales, and in out-of-warranty repairs, for those customers foolish enough to go there.

Why do dealers have the highest repair costs?  They just do.  That fancy shiny new building that looks like a spaceship and has a crystal chandelier in the showroom cost some serious money.  And they have to charge a high labor rate to pay for the high overhead as well.

Plus, they have a mountain of employees running around the place, each with a benefits package.   The mechanics are paid pretty well, but usually the dealer pays to send them to factory training.  So they set their labor rate high, and their parts cost is high as well.  The latter is often because "factory parts" are expensive, and the dealer is obligated to use them as part of its franchise agreement.

By the way, car companies often make as much if not more money on parts than they do on a car.  And this is why they have campaigns to "Keep your ACME car, all-ACME!  Use only certified factory ACME parts!" - because the cost of such parts is over double that of aftermarket parts.   And yes, often they are of better quality.  But often not, and often "factory" parts are made by third parties and for sale from other sources for less.   Basic wear items - filters, brake pads, and the like - are cheaper elsewhere, even if they are identical to and made by the same company as, the "factory" version.

But, aren't dealer mechanics highly trained and know your car better than anyone else?  Yes and no.  Look around your typical dealer's shop sometime and notice how young many of the mechanics are.   Yes, the dealer sends them to factory mechanics school - to learn the latest about the latest new cars.  And as what I call "warranty monkeys" they know how to repair problems with cars that are 1-5 years old.  But usually, they have little or no experience with older cars, with higher mileage and older car issues.  Why?  Because 90% of their work is with clean, shiny, new cars that are still under warranty.

Joe Blow buys a 10-year-old used BMW and takes it to a dealer.  The mechanics snicker that they haven't seen such an "old car" in a long time.   About half of the mechanics have never seen one that old, ever, as they have been working for only five years.  And none of them are familiar with what happens to these cars when they get to be a decade-old and have 100,000 miles on them.  Often, they are utterly clueless, and may even suggest repairs that are unnecessary.

For example, as I noted before, it is typical for these cars to develop cracks in the flexible rubber intake elbow, which causes an air leak downstream of the Mass Air Flowsensor, allowing un-metered air into the system.  This elbow costs $15 and takes 15 minutes to install.  But, the mechanic, having never seen a car where the rubber is rotted out, reads the error codes (oxygen sensor out of range) and replaces all four oxygen sensors, which cost $250 apiece (dealer pricing) and another $500 in labor - and still fails to fix the problem.

And yes, that actually happened to a friend of mine - or would have, until he read my posting on the matter on a BMW site and ordered the $15 elbow and replaced it himself.

Dealer mechanics just don't see older cars with dirty engines and all the weird things that can go wrong with old cars.   So they don't know.  They are trained to read codes and replace parts, or to consult "service bulletins" describing factory defects that need to be repaired.  They are not familiar with the more difficult and esoteric job of diagnosing problems and fixing them.  And this is not because they are bad mechanics, but because they have no experience and no opportunity to get experience, in this area.

There is one other aspect of dealers that is kind of scandalous.   Some dealers will come up with a laundry-list of "defects" which at their repair rates would cost thousands of dollars to repair.   They then helpfully offer to take your "clunker" (which may need only $500 in repairs) as a trade-in on a new or newer car.   Yes, this is fraud.  Yes, I have seen it on numerous occasions.   One friend was told his car needed $3000 in repairs, when in fact, it needed $300 (that cracked intake elbow was one of them!).   Another was told his car needed $5000 in repairs, including $500 each for new rear-view mirrors (!).  In both cases, my friends were pressured to buy new cars, and fortunately, they both saw through the ruse.

And when I say "don't go to a dealer" this goes double for a used-car dealer.  Avoid used-car dealers entirely - for buying cars, or repairing cars.  Period.

There is one exception, with regard to new car dealers, and that is so-called "secret warranty" repairs.  In some instances, dealers may be authorized to fix things that are out of warranty, if they are a chronic or endemic problem to the model or marque.

For example, GM replaced TM-250 transmissions in some cars, sharing the repair cost based on mileage, with some owners.   Broken coil springs on Chevettes were replaced out of warranty.  Dodge repainted a lot of older Ramchargers with fading silver paint.   BMW replaced engine blocks in older 5-series, when the aluminum (a similar composition to the Vega engine!) eroded due to high-sulfur content US Fuel.  Sometimes, you can search online for these things, if you suspect a breakdown of a major component might be covered.

I wrote before about Extended Warranties.  I don't think they are a good bet, but if you buy one, make sure it is a factory warranty (even dealers will lie about this) and beat them up on price, as they are wildly overpriced.  Yes, a new engine might cost you $5000.  But that doesn't make an extended warranty worth $3000 - odds are, your car will never break in a manner covered by the warranty.



2.  Discount Chain Stores - Use Wisely:  The major automotive chain stores (and discount stores) that sell tires, do brake jobs, or change oil, can be useful, if you use them wisely and what they were intended for.   Going to Sears or Wal-Mart to have your engine replaced is a bad idea.  And likely they will tell you they can't do it.

But for an oil change or to have your tires mounted, they might not be bad choices.   Eeven if you don't buy them there - the Tire Rack will ship tires to your home for less than you'd pay at a tire store.  Wal-Mart can mount them for $20 a tire.  Similarly, such places can put a new battery in your car for not a lot of money.

But understand the limitations of such places and use them only for such simple repairs.  Wal-Mart might be able to do a brake job, but replacing struts may be another matter entirely.


3.  Rip-Off Chains:  Many specialty chains advertise heavily on the TeeVee and radio, and promise to do brakes, mufflers, tires, or transmissions.   Some of these are not bad deals, while others are outright rip-offs.

Modern cars rarely have exhaust system problems - they last 10 years or more.  But muffler work is nasty and messy, and a muffler shop can replace your exhaust system for a lot less than a dealer or indeed many specialty shops.   But beware - get a price quote up front, and don't fall for the trap where a simple muffler replacement morphs into a catalytic converter replacement or more.

Also, before doing any exhaust work (or any work) on a newer car, bear in mind that emissions warranties may cover some parts, including the catalytic converter, on your car for up to eight years.  

Transmission Chain Stores are notorious for diagnosing every problem as "replace transmission".  And many people report that replaced or rebuilt transmissions don't last very long.   Frankly, a transmission should last the life of the car, and if you are looking at replacing a transmission, perhaps the life of your car has lapsed.  I would avoid the transmission chain stores like the plague.

Brake Job Chains might seem like a good place to get a brake job, but their come-on pricing ($29.95 per axle!) is often just that.  That price is for a Geo Metro, and covers only pads.   Turning the rotors or replacing them is extra.  And by the way, turning rotors is often a waste of money - all you are doing is taking material off the rotors for no apparent reason.   If the rotors are "warped" (which really rarely happens) just replace them - they often can be had for as little as $25 each, for popular cars.  Otherwise, just replace the pads.


4.  Tire Stores:  Tire stores also advertise heavily and have three fundamental problems.  First, they don't sell you the tire you really need, but what they happen to have in stock.  So the "tire expert" (who was wetting his bed, only a few years ago) tells you that the Skid King Lock-em-up 2000 is the best tire for your car, when in fact, it is the only tire they have in the back room that will fit.  Funny how that works.  And, of course, their prices are not really very good, and the tire is some off-brand, or it has a poor wear rating.

The second problem is that they try to tack on "road hazard" warranties and the like, which are like any other extended warranty, just bullshit.  Chances are, the stock tires on your car, that you are replacing, never had so much as a nail in them.  Paying $20 to $50 a tire extra for this is often wasted money - but illustrates how they are in the up-selling business.

The third problem is that they always recommend an "alignment" even if you don't need it.   Or they claim that to honor the "road hazard warranty" you have to get an alignment first.  Modern cars generally don't need an alignment, if you drive them carefully, don't floor it through potholes, or slam into parking lot bump stops all the time.

My 1995 Ford F-150 never had an alignment until 100,000 miles, at which point I thought I should have it done.  The fellow at Sears adjusted the alignment very slightly and made it drive worse - it wandered all over the road with too much toe-out.  Once home, I turned the tie-rods back in to their previous adjustment (which I could see by the rust line) and the truck ran great.   It never pulled or veered or wore out tires.  And I should have left well enough alone.

My 2002 X5 now has 130,000 miles on it, and has never had a front-end alignment.  Nor does it need one.

If your car's tires are wearing well and the steering isn't funny or the steering wheel crooked, chances are, you don't need an alignment.  If the car is pulling to one side, either you have a stuck brake caliper or have some serious suspension issues that need to be looked at.  Ditto for oddball or loose steering.  But a well-maintained car may never need a front-end alignment (or four wheel alignment) in its lifetime.

And many new cars have only one adjustment  - toe-in.  And even if your car has a camber or castor adjustment, chances are, the tire shop isn't going to spend the time dicking around with that, as it is too time-consuming and they risk breaking rusty old bolts.

I watched several alignment guys at work, as I needed alignments done on cars after I replaced control arms, tie-rod ends, ball joints, and the like (which usually WILL require a front-end alignment).  In many cases, they put the car on the rack, look at the toe-in and then adjust that.  The computerized systems, which are supposed to show alignment specs for your specific make and model car, are often ignored, with the tech not even bothering to enter this information, but rather hitting "generic" as the car model.  They then align to what they believe is a standard amount of toe-in and leave it at that.

You really have to watch those chain-store guys like a hawk.  And no, it is not "insurance regulations" that prevent you from entering the work area, but rather them not wanting you to see how they actually work on your car.

I have found that buying tires online is often a better deal.   You can buy the tire you want, rather than what was in stock, and then take it to Wal-Mart for mounting and balancing.  And yes, Wal-Mart does a good job of that.   Ironically, Wal-Mart's tires are rather expensive, and they have a lot of off-brands.  I would not buy the tires there.


5.  Jiffy-Lube:  Jiffy Lube bears special mention, and the comments here can be applied to any oil change place or chain.  When you operate thousands of stores and change the oil on millions of cars, using lower-skill labor, well, shit is going to happen.  This does not mean they do a bad job, only that eventually, you will leave someone's oil drain plug out, or drive their car into the oil pit.  But anyone can do that sort of thing.  A friend of mine went to her Toyota dealer for an oil change - and they left the drain plug out.  Shit happens, as they say, and when you change the oil in millions of cars annually, shit will happen.  It doesn't mean you are incompetent - necessarily.

But the lube chains do try to "upsell" services - often recommending replacing air filters (long before they are due) or doing transmission oil changes - which can be a good idea, providing it is done.  Yes, in some documented incidents, oil change places have charged people for changing transmission oil, and then not changing it.  Ouch.

And of course, with today's modern synthetic oils, you can go a long time between changes.  And most of these discount oil change places charge a LOT for synthetic (sometimes as much as, if not more, than what you'd pay at an auto parts place).  So the savings are not as great as all that.

If you go to one of these places, like with a chain store, stick around and watch what they are doing to you car.  Often, this eliminates a lot of problems, if they know you are watching.

I use an oil extraction pump, which makes changing oil about a 10-minute affair with no mess.  Since my cars all require prescription motor oil (and radiator fluid, transmission fluid, etc.) it is just a lot easier to to it myself.


6.  Gas Stations:   Most Gas Stations have convenience stores these days, not repair shops.  The few that do are often repair shops that just happen to be located in gas stations.   Selling gas is no longer their first line of business - they leave that to the gasaterias.

These types of shops are catch-as-catch can.   Some are great, others less so.  In the small development I lived in, near Alexandria, Virgina, we had such a gas station, and they did good work.  They were not cheap, but not as expensive as a dealer.  And I had no trouble recommending them to friends.  Usually, such places develop a reputation quickly as a good place to go, and if you ask your friends and neighbors (as opposed to, say, Yelp! or Angie's List, or some other site that could be shilled or have postings from hysterics) you should be able to find such a place in your area - that can work on most common makes and models of cars.

There are, however, other types of service stations that should be avoided at all costs - and these are the kinds of places that rely on the unsuspecting and unwary to walk in.  Again, it pays to ask around in your neighborhood.  And just as the honest repair place gets a good reputation quickly, the ripoff place is well-known to everyone.
 


7.  Specialty Shops:  Once a mechanic has any kind of experience at all, he usually opens up his own shop.  And many specialize in a particular brand or marque, or brands from certain countries (Japanese, German, etc.).  These can be a good option, if you have a specialized car which needs specialized repair.  The fellow who repairs 100 cars just like yours is more likely to know how to fix such a car.   The generalist who works on everything from Chevies to Toyotas, to VWs to Fords might not be able to diagnose a BMW or Mercedes problem as easily or accurately.   But he will charge you his hourly rate to do so.

In the bicycle example above, once I disassembled the entire shifter, I knew what the problem was on the other three, and how to fix it.   Knowing the problem is half the battle, and when you see 100 of the same make and model car, it isn't hard to understand what is going on.   I can fix a BMW, only because I've had a number of them.   Don't ask me about your Toyota.

Similarly, a specialist mechanic can quickly diagnose problems on your brand of car - problems that may stump a generalist mechanic or even a dealer.   For an older car, particularly of an esoteric marque, these are the mechanics I would look for.


8.  Evaluating a Mechanic:  Again, references from friends and neighbors are useful.  If your neighbor went to Joe Mechanic and says, "Well, he did good work and the price was reasonable" that is a good sign.  No one is going to be cheap or free, so just get that out of your head.

And ignore bad reviews from people you know to be hysterics, unreasonable, or cheap.  You know the type - they want it fixed yesterday, for free, and a loaner car as well.  People like that are never happy and they try to abuse the reputation of honest tradesmen as revenge for perceived slights.

How a shop looks tells you volumes as well.   A sloppy place with greasy floors, disorganized piles of tools, and junk all around - with junked or wrecked cars in the lot that have been there for years - is a sign of someone with sloppy work habits.   On the other hand, the guy with the "German Autohause" with the pristine building and collector cars in the front window might just be a poseur and also have a high overhead  - and still not know what he is doing.

A well-ordered but busy shop should be concentrated on the work at hand, not on making things look too pretty.   But a good mechanic and well-run shop doesn't leave junked cars laying around or tools on the floor or blackened grease all over.

To me, there is a middle ground, and the shops that are well-ordered but busy looking are the best choice.   A place that is nothing but technicians in lab coats with clipboards is a poor choice, as is the Cletus in his coveralls with tools on the floor.

* * * 

 The main problem with car repair is often the nut behind the wheel that needs adjusting.  Yes, the car owner is the source of most of the problems:

1.  People want their car fixed for free - they seek out screaming bargains rather than just solid good deals.  Screaming bargains are usually a cover for rip-offs, in most cases.   Seek out a fair bargain and you are better off than trying to get repairs for free or steeply discounted.

2.  People throw good money after bad cars.   No, your car likely won't go 300,000 miles, nor should you expect it to.  At the end of its design life, a car can need a lot of repairs, and it isn't worth fixing.  Understanding the Weibull curve is essential to understanding car repair.   Many people throw thousands of dollars at an older car, and only then realize they foolishly wasted money - and give up.  Knowing when to unload is important, and sometimes it is better to replace than repair.  And increasingly, modern cars have a lot of esoteric parts which are hard to find or expensive - making even simple repairs costly, once the car is over 15 years old.

3.  People don't take care of their cars.  Park your car in your garage - if you have one.  Putting garbage in your garage and you car outdoors makes no sense.  Stop driving like white trash - being in a hurry all the time and tailgating, speeding, etc.   I haven't changed the brake pads on my car in 75,000 miles - because I don't drive like you do.   Drive your car like you want it to last 20 years - and it just might.

The above discussion covers the first point.   The last two points bear some further examination.

I rag on the poor a lot here, not to abuse them, but only  to illustrate how, by making poor decisions in life, they end up poor, and/or they perpetuate or exacerbate, their poverty.   We can't expect them to know any better.   But I use this to illustrate how, as a middle-class person, your poor decisions also affect your financial well-being as well.  If you can avoid making poor choices, there is at least some hope for you.

If you go to a poor neighborhood, and are astute about cars, you will be shocked to see how many poor people have fairly new cars - but that they are all dented, scratched, dirty, poorly cared for, and poorly driven.

Both of my cars are over a decade old, and yet look like new.   And yet I will see a "poor" person driving a five-year-old car that looks like it has been in a demolition derby - dented and filthy, filled inside with trash, with papers and garbage all over the dashboard.


How you take care of a car has a direct effect on how long it will last.  Perhaps the poor are not bright enough to see this.   But you, Mr. and Mrs. Middle-class who went to college, have no such excuse.

And yes, I see many middle-class people - smart people (supposedly) - who treat their cars like they live in a trailer park.

If you want to save money on car expenses - and they are huge expenses for most Americans - take care of your car.

You will also note, if you drive through a poor neighborhood, how the poor make poor financial choices by throwing thousands of dollars at cars that should be headed for the junkyard - trying to "fix" a 20-year-old Impala (book value $400), for example, or putting $2000 of "bling" rims on a $500 car.

They mistakenly view a car as a permanent thing - to be kept forever - and only give up on the car when the repairs become unaffordable.   Even then, they don't give up - they just park the car in the side yard, as if to say they will "get back to it" someday.  They never do.


I love my cars, but when they need a new transmission or a new engine, it will be time to sell them.    Or if they are over 200,000 miles, I may sell them.  Or if they no longer fit my needs, I will sell them.  They are just things - consumer goods that wear out, over time.   "Hanging on" to a vehicle makes no sense at all.


That's about it, really.   When you make poor decisions (in both senses of the word) about cars, you will end up poor - or at least poorer.

Buying Back Stock And Jumping the Shark

When running a company, do you use profits to invest in the future, or just to cash in for today?  Stock buybacks are often the sign of a company struggling, not succeeding.

In an earlier posting, I noted that buying back your own stock is not always a great deal.  In theory, when you buy back the company's stock, you increase the value of the remaining shares, so each shareholder has an increased value in their stock.   From a tax perspective, this is great, as the shareholder then pays tax on capital gains (15%, the Mitt Romney rate) rather than 35% (the upper-middle-class schmuck rate).

But it doesn't always work out that way.  Why?  Well, share prices are determined by market values, and market values are not rational all the time, and the value of a company can be affected by things other than number of shares outstanding.  So you buy back shares, and the value of the company may plummet, if there is an announcement of a competitor's product hitting the market, or a recall of your own product, or a drop in earnings - or whatever.  There is no direct linking of a share buy-back to a share price increase.

The second problem is, of course, when the company has the cash laying around to buy back shares, then it is likely at a high share price.  So while the company is buying back itself (like a snake eating its own tail) it ends up paying the highest possible price to do so.  In short, it is not getting very good value for its money, particularly if the share price goes down, instead of up, which it could, if earnings drop, for example.

The third problem is, of course, that the motivation to buy-back shares may be self-serving.   As was reported in the Apple share buy-back, the principle reason stated by management for the buy-back was to prevent "dilution" of the stock (a code-word for share price drop) when huge stock options are offered to employees later this year.   So, in other words, the people getting the stock options have decided that it is a very good idea to use the company's resources to prop up the share price.   And this is no secret -  it was the stated reason given by management.   Few bother to read.

And manipulation of stock prices, until fairly recently, was the name of the game.  Until recently, companies could announce share buybacks and then not actually carry them out.  The idea being, that an announced share buyback would spike the stock price, so insiders could cash out.

And since new SEC rules have been enacted, some studies suggest that share buybacks are indeed timed to help insiders cash out.   And yet, when companies announce these, as Apple recently did, analysts applaud.  If you robbed a bank, you go to jail.   You rob a company, you get accolades.

A fourth problem is that some companies buy back stock even when they don't have the money or are not very profitable.   Often, these are naked attempts to shore up share price with the few remaining dollars left in the till.  It's called market manipulation, and yes, in other scenarios, it would be illegal.

A fifth problem is sometimes companies actually borrow money to do this.   Microsoft announced a share buyback in 2010, using money from a bond issue.   In short, they were turning equity shares in the company into debt shares.  And sometimes it is better to be a bondholder than a shareholder.

Of course, maybe this makes sense for Microsoft, as it can borrow money at all time low prices.  But then again, with a dividend yield of 2.51%, wouldn't it be paying more for interest on debt than it pays on stocks?  A complex question, as the money yielded from stock sales is often far less than the current sales price, so in effect, by paying a dividend, Microsoft may be paying huge amounts, in terms of percentage rate-of-return, to original shareholders.   Debt could be cheaper.   But of course, debt has to be paid back - a 10-year bond is due in 10 years, as the owners of the Mohegan Sun Casino found out.   And if you don't have the cash?  Well, it gets messy.

A sixth problem is, again, the insider problem.   In addition to stock options, many executives are paid hefty bonuses on earnings-per-share.   So, if you are an executive and earnings are down, what do you do?  Yea, decrease the number of shares outstanding.  Hello bonus!   Pretty clever thinking, no?  These are guys who didn't sleep though math class or thought fractions are hard.   Numerator, and Denominator.  Pretty slick!

Finding historical data on stock buy-backs is hard to do, as they are not indexed anywhere I can find.   Until 2004, the SEC had few rules on reporting of buy-backs.   Some folks tout buyback stocks online - of course, wanting you to subscribe to their investment letter.   This company, for example, touts statistics that companies that buyback their stocks tend to outperform companies that don't - or companies that issue more stock.  (Note, this is not an endorsement.  I do not subscribe to 'schemes' like buying only buyback company stocks).

Others are not so sure.   As noted in this NYT article:

Over the last decade, in fact, companies that spent the most on repurchases had a total shareholder return of 37 percent versus 127 percent for companies that spent the least, according to research by Gregory V. Milano, chief executive of Fortuna Advisors, which consults with companies on how to raise their share price over the long term .

Obviously, they are not touting an investment letter about buying stocks in buyback companies.

But that does bring up the flip side of company buybacks - the selling of "seasoned" additional stock.   Many companies can issue more stock, whenever they want to, effectively diluting your share of the company.  And this is what Apple is trying to prevent, as it grants share options to employees - it wants to keep those options valuable by preventing dilution.

But companies that buy back stock one year, often end up issuing more in other years - as they need money to expand or stay in business.  A stock buy-back is no guarantee of long-term performance.

And in fact, as many note, the real deal in stock price is the underlying profitability of the company, period.   A company can buyback half of its stock, but if the profitability of the company tanks, well, the stock price will tank, too.

Here are some companies that have done buy-backs, and the results:


Ford Motor Company -  Ford bought back stock in 1984, when business was doing well, and then faced financial disaster in 1991 ("It's the economy, stupid" - remember?).  A similar thing happened in the 2000's when I was a shareholder.   Ford bought back stock and debt, and then, well, 2008 happened.

Berkshire Hathaway -  Last year was a crummy year for Berkshire Hathaway - Warren Buffet's company that can do no wrong.  Actually, if you look a the history of the company, Buffet has done poorly in the past, but when he succeeds, he does very well.  But 2011 was not one of those years.  While the S&P 500 broke even for 2011, Berkshire dropped by about 4.7% (4.8% if you bought class B "little guy" shares).

And in September, Buffet bought back his own stock.  Was this Warren Buffet being a savvy guy and spotting a bargain?  Or was this Warren Buffet, showing flop sweat, and buying back his own shares, at a high price, to prop up the value of the stock?  You decide.   Many folks think today that Berkshire is "overweight" on its stock price.

Apple -  Until a few years ago, Apple was a dog of a stock.  With a P/E ratio of 40 or more, it was not a very good bargain, even at $100 a share - which many thought (rightfully at the time) was a massive over-valuation of the company.  In retrospect, it was a considerable bargain at the time - if you could have used your crystal ball to see the future.  But crystal balls don't exist, and are a lousy way to invest.

Today, at $600 a share, the P/E ratio is far lower, and for the first time in two decades, they are paying dividends again - and talking about buying back stock.  The have the cash, so why not?  And as I noted, they have to keep the share price up, if the insiders want to cash in.

But to keep this game going, they have to keep making profits at current levels - selling products and introducing new products.  If the wild profit margins on its products slip, say due to competition in the marketplace, what happens then?  Do you think they can make monopoly profits forever?

That is the call you are making when you buy Apple.  Perhaps a better use of that money might be in expanding the company or buying other companies - thus increasing the share value proportionally.  By making the company larger, the company is more valuable and profitable.  Buying back shares only serves to keep the company the same size, with fewer shareholders.

Pfizer -  Pfizer has been laying off employees and cutting back on expenses - and at the same time, buying back its stock - nine Billion dollars in 2011 alone.  Has this helped the stock price?   A little, bringing it up from maybe $20 a share to nearly $22 a share.   Unfortunately, I bought it at $27 a share before the recession hit, and it has not bounced back to its former glory.  It remains to be seen if a share buyback can do that.

In the pharmaceutical industry, it is grow-or-die, and buying back shares is a risky option, when you need to have new products in the pipeline all the time.  And the cost of developing new drugs is staggering.  As a shareholder, a buyback is nice, but I would prefer to see a new wonder-drug come out of their laboratories instead.  That would bring up the share price faster than a share buy-back.

Zimmer - this is a classic case of using a buyback to rationalize your bonus.   Zimmer has been closing plants and downsizing, and profits are down.  But by buying back $500 Million worth of shares, profit-per-share has increased, and the executive's bonuses are intact.  Who makes the decision to buy back stock?  The executives who get the bonuses!

From the NYT article:

That helped its senior management, including the chief executive, David C. Dvorak, collect millions in cash and stock incentive payments by meeting earnings-per-share goals. For example, 50 percent of Mr. Dvorak’s $1.03 million cash bonus was tied to achieving per-share earnings of $4.28 in 2010. The company earned $4.33, but without the share repurchases the company would have made $4 to $4.10 a share.

Investors have not rewarded the strategy, however: Zimmer’s shares have dropped 32 percent in the last five years....

 Zimmer is running out of money, but still buying back its stock, to the tune of a Billion dollars.  So, the head management will make more money in bonuses, even as the company burns through its cash reserves and takes on more and more debt.  Sounds like a swell stock buy, right?

* * * 

This is not to say that all stock buy-backs are a bad thing.  But often, the reasons for doing them are anything but legitimate.  They favor insiders more than shareholders, and far from being a sign of a company's financial strength, they are often a sign of weak management that has run out of ideas, or worse, corrupt management that has reduced itself to manipulating stock prices in order to protect its own perks - for the time being.


In a way, share buy-backs are like the difference between how Democrats and Republicans see the world.  Democrats see the pie, and try to figure out how to divide it up more fairly.   Republicans would rather make a bigger pie, so everyone gets a larger slice.

Buying back shares makes a smaller pie.   Your individual slice may be bigger, in proportion, but the overall pie is not larger, and in fact, often smaller.  The money spend buying back pie is money that could be spend expanding the company, creating new products, investing for the future, or just banking for hard times ahead.

Companies that invest in the future expand and thrive.  Companies that hunker down and try to increase profits per share while not re-investing in the business, tend to wither and die.

All or Nothing

Most Americans fritter away their wealth and then wonder where it all went.  Today, many are blaming the rich for 'taking their money.'  But the cold, hard reality of it is, we gave it to them, willingly.

In my posting Dreams of Avarice, I made fun of Mitt Romney's comment that us "little people", when we drive through a rich neighborhood, don't feel resentment, but rather feel that "someday, maybe that will be me!"

It is a ridiculous proposition, of course.   Our life paths are pretty much determined within a fairly narrow range of possible outcomes, based on our native intelligence, educational levels, starting economic status, and opportunities available.

And yes, Luck.  But while you might get lucky now and then, luck isn't going to un-dumb you, or make you have a sudden insight into the business world or cause to you to invent "the next big thing!"

If you look at a lot of the people who struck it rich in life - the Sam Waltons, the Bill Gates, the Warren Buffets, the Sheldon Adelsons (who?) you see one common thread:  a burning desire to succeed, and a willingness to do anything to achieve it.   These are not people who sat around doing bong hits, or warming a stool at the end of a bar, waiting for opportunity to knock.

And let's face it, most of us would rather be doing things like that - watching television, hanging out, goofing off.  That is just the sum and substance of it.   And there is nothing wrong with not having a lot of ambition.  But, (and this is key) you have to accept the lifestyle that goes along with it.

And this is why I hate pot-smokers.  Well, not hate, exactly.  Just that they annoy me.   They want all the riches, fame, and wealth, but want to just sit around and do bong hits.  They don't see the connection between one and the other.  And they assume that since they aren't rich, than someone must have "taken away" their money.

But no one took anything away.  Rather, we little people just give it away, with our blubbering thanks.  "Gee, thanks Mr. Loan Officer!  Thank you for handing me a hundred dollars and asking me to pay back a hundred-fifty!  This is like free money!"

No really.  We think that way.  All of us.  At one time in our lives, we all think we are "lucky" to get a loan.  Some never break free of this mindset.  Many people spend their lives praying to the false God of the FICO score.  I kid you not!  They go on discussion boards and obsess about a computer-generated number as if it were handed down from the Oracle and Delphi.  It is their sense of self-worth, because "having good credit" we are told, is the key to everything.

Mitt Romney was right, as stupid as his comment sounds.  A lot of us really do think that we will be rich someday.  We all harbor vague notions about becoming wealthy, but have no real concrete plans on how to do so.

So when the circus comes to town, offering to sell us unfinished condos in Fort Lauderdale, Gold Coins, or Facebook stock, we schmucks think, "This must be it!  This is our chance to make it big!  I knew someday I'd be a millionaire!  I'd better jump on this!  My ship has come in!"

It is the same part of our brain that says, "Gee, maybe that man in Nigeria really does have the sum of $5.4 Million US dollars to send to us!"  Chelsea Clinton's Father-in-Law thought so.

Yet, the ability to accumulate real wealth is present for almost all of us, but we reject it.  Why is this?  Why do we seek out long-shot odds to become wildly wealthy, while at the same time rejecting the very wealth that is put on the table?

The median income in the USA is about $52,000, while average income is about $63,000.  This is a lot of money by global standards.    If you could save even 10% of that amount, you'd have a hefty $350,000 before you retired.

Yet many people spend far more than that, tithing to an odious church, or on car payments, jet ski payments, or cable TV, or a combination of all of these things - plus more.  Many gamble that much away.

And when I call them out on this, people say, "Well EVERYONE has Cable TV!  How can you live without it?"   Answer:  Better than with.

They say, "Well EVERYONE buys a new car every three years!  How could you live with an 'unreliable' old car?"  Answer:  Better than you do with your series of econo-boxes.

And so on.  People spend their way to poverty, what I call middle-class poverty.   They have a lot of shit, but not a lot of money.   And they are one pink-slip away from homelessness - due entirely to their desire to have things now and not save a penny.   And I'll say it again and again, The Road to Middle-Class Poverty is Lined with Car Payments.

The middle-class has the opportunity to better itself, by saving money and building wealth.   But alas, few choose to do so.   They spend like demons, borrow until they are broke, and when they do invest, it is in long-shot lottery-ticket kind of deals that they tout on the TeeVee.  And of course, they lose their shirt, every time., in these flaky deals.

We saw this with the dot-com boom in the 1990's, the Real Estate booms of 1989 and 2009, the gold bubbles of 1981 and 2011, and now a new dot-com boom of 2012.  Millions of Ralph Cramdens investing in things they really didn't understand, saying "Norton!  This time we're going to be rich!  And I'll buy Alice that fur coat!  This investment is going to the moon!"

And it never quite worked out as planned.   Over the last four decades, the middle class has been leading a more and more opulent lifestyle, fueled with borrowed money - credit cards and home equity loans.  We are told that consumer spending is the end-all to our economy.  And people think it is "normal" to give grade-schoolers their own cell phones, and teenagers brand-new cars.  And no one stops to think about the cost of it all.

And when it all goes horribly wrong, we want to blame the "1% ers" for "taking our money away" - when in fact, we handed to them, with our blubbering thanks.

So, today, we have the sight of a young person claiming they can't pay back their student loans, protesting on Wall Street, and twittering about it on their $499 smart phone that costs $100 a month with a data plan and texting.  They complain they can't find a job, but they can find the time to get a tattoo and a nose ring. They just don't get irony.

Middle-class people complain they are living "paycheck to paycheck" in an e-mail "sent from my smart phone" and wonder why they are broke.   

Or we have people whining about how their home is being "unfairly" foreclosed upon when they stop making payments on it.   And they sit in their marble-bath luxury and granite counter-top kitchen, watching their 500 channels of wall-screen TeeVee and say, "It must be Obama's fault!"

No one has a "right" to luxury goods and expensive services.   But for an increasing number of Americans, this is the mindset.   Cable Television is like oxygen - they need it to live.   Smart phones are not a "should I buy one?" proposition, but a "which one should I buy?" kind of deal.   We are all told that we should have it all now, and the media portrays us all as having all this neat stuff.  Every movie and television show depicts us middle-class schmucks as having fabulous homes, apartments, and of course, brand new cars.

And we buy into it.

The odds are, you will not strike it rich.   In fact, the odds are very much stacked against you.  Unless you have a burning desire for wealth, some intelligence on how to go about getting it, access to capital and economic connections, and a willingness to scrimp and do without, in the interim, you will never become wealthy.

And right there is where most of us miss the boat.  If you look at the bios of the rags-to-riches billionaires, like Sam Walton, you see one common thread.  Old Sam didn't spend his days flopped on the couch, in front of the tube, smoking weed.  He didn't spend his days working shitty jobs so he could make payments on his Trans Am.  He didn't squander money on bullshit consumer goods - he made money selling that crap to the rest of us.

Those habits of his frugality from his early years stuck, too.  And of course, later in life, when he was a Billionaire, he still drove around in a clapped-out pickup truck and lived in a fairly modest house.

Did being cheap make him rich?  Yes and no.  Living simply allowed him to gamble on starting up his own store, early in life.  By not tying himself down to material things and car payments, he was able to plow every nickel he had, back into the business.  Few people are willing to live like this.

We trade that off for a Trans Am in the driveway, or worse, a Chevette.  You have choices in life, and you make them - and suffer the consequences.   If you want to know where all your money went, and you are sitting on a cheaply made microfiber sofa, watching your 52" flat screen television, I have a pretty good idea where.

So maybe you won't be super-rich.  That's not such a huge tragedy.   But you can still be financially independent and wealthy, on a global basis, in your own right.

It does mean, however, giving up the trappings and appearances of wealth, and making some sacrifices, for your own personal good.   Trying to "have it all" now and hoping, down the road to "strike it rich" in some vague and unspecified way, is never a very good plan.