Accountability and Responsibility

I’m looking at my calendar and I can’t believe that it is February 22, 2007 — almost 8 weeks have passed since we all had to buy new calendars. Around New Year’s Eve many people make new personal promises for how they’ll do 2007 differently — and few will stick to them. That’s normal, we get stuck in our habits and our desires and tend to forget our past mistakes.

So today is a great time to open up to yourself and figure out what you would have done differently. Feel free to share at the forum if you have some good advice for others — especially in the realm of accountability to others or responsibility to people you forget you are responsible to.

My list of what I would have done differently — and am already actually doing — is as follows:

1. Spend more time with family, really.
2. Spend more time meeting new people just once.
3. Learn and memorize 3 out of 12 of my neighbor’s full names, and everyone in their house.
4. Shave more often (Business partner Christos tells me I look like a homeless guy!)
5. Take customers out to dinner more often.
6. Buy more gold.
7. Buy more silver.
8. Give more gold and silver away as presents.
9. Stop hounding my friends with “I told you so.”
10. Find more friends to set up for the “I told you so.”
11. Publish more posts, stop saving them in the “Saved Drafts” folder.
12. Sell the third car.
13. Stop “buy” bets on the craps table, stick to pass line + odds and come bets with odds.
14. Clean out my pipe more often (stinky).
15. Change my own oil, for real (won’t happen).
16. Get a smaller refrigerator, get rid of one kitchen cabinet.
17. Get out the “don’t vote” earlier in the year.
18. Stop fighting with various Pastors in the area when they come across my opinions.
19. Rip out all my closets and replace them with smaller armoires — less clothing, more space.
20. Change the bulbs more often rather than stumble around in the dark completely.

So what would you have done differently, and what are you actually doing? Discuss it at the accountability and responsibility forum.

I heard it twice in the past 2 weeks, and 4 times in the past 6 months. If we look at a (fake) estmated progression curve, that means I’ll hear it 2 times per week within a month, and ten 4 times per week in less than 6 months. Actually, maybe that estimated progression isn’t fake.

The most recent time I heard it was at the top of the 2 week period. A friend I haven’t talked to much over the past 3 years called me up out of the blue and asked if I’d go with him to spend a “free” US$250 credit he received from a local casino that he hasn’t gone to in 6 months. From what I know of him, he goes to play video poker about every quarter, and spends a few grand playing. I’m fairly certain that he’s broken even over the long run.

Since my budget in November didn’t allow for cash out of my own pocket for gambling, I gladly accepted to grab $100 of his credit to sit on a video poker machine next to him, just to talk for a few hours. I don’t play video poker unless it is for pure social reasons — while it is fun, it isn’t the form of gambling I like most (I only like social interaction, not “winning.”). My friend, though, loves video poker. Unfortunately, he plays terribly — but the way he plays also fits into why he seems to hate his life.

Originally, I had typed up my recollection of our discussions intending to just post it as a one-shot article. Instead, I broke it down into about a dozen topics, and decided to post them one at a time as a mini-series titled the Definition of Living. It seems that different people look at living differently, but the way I look at is the rarest. I’d like to change that, at least for the readers here.

My friend (Eric) has a decent job making a little over US$60,000 a year. He lives in a nice house (worth probably US$300,000 at the peak of the housing bubble). He has a nice wife, two kids, two nice cars, and really seems from the outside to have it all together. But as many readers know, keeping up appearances is more the standard today than is truly being “together.”

Eric told me he hates his job — he works about 42 hours a week, 49 weeks a year, plus almost 10 hours a week in driving. His vacation time is 3 weeks but he takes it in pieces, a little here and a little there. I believe he said his family has taken 3 1-week vacations in 5 years. I know he doesn’t get any time with his extended family, even though they all live within an hour drive of him or less. Eric told me his marriage is shakey — he never gets to spend quality time with his wife, who takes care of the kids as well as works a part-time job. He never gets to spend time for himself doing what he likes to do, other than the video poker days he used to take every so often. I’m not sure he even has a hobby. As I watched him push the “Deal” button over and over, I kept thinking about how much his life is like his gambling style.

Eric was playing $1 bets on single hands on a machine that accepted 25 cents, 50 cents and $1 bets. He was playing conservatively, playing as if he were in a real poker game trying to just get the best hand for the win. There were times he was up by a little bit, and down by a lot. I was sitting on my machine, betting 25 cents a hand but playing the max bet (5 times 25 cents). I wasn’t playing conservatively, I was only looking for the best payout — the Royal Flush. A few times I saw that he had a KQJ, all suited, but he dropped the J and tried for 2 pair or a full house. If I get that hand, you better believe I’m going to risk losing that hand for the opportunity for the 800:1 payout on a max-bet royal flush. $1.25 per hand on my end for 800:1 versus $1 on his hand for 400:1. Royal flushes are rare (about every 9000 hands I believe), but I’ve hit them enough in my rare video poker runs to know that they’re not THAT rare. I didn’t hit one, but I hit enough straights and flushes to set me above his take at the end (which I gave to him, since it wasn’t my money).

Eric also plays life conservatively — he is employed, and I am self-employed. He has a boss, I am my boss. He has a preset work schedule for a preset salary, I have a variable schedule and a variable income. His life allows him to take no risks, but the reward is slim. My life is all about calculated risks, and the rewards have outpaid the failures. He just wants to win against every other hand in the game of life, I want to hit the jackpot even if there are losses along the way. Life isn’t a gamble for all, but for those willing to take the risk, the reward is obvious. Life isn’t like a casino, though — the odds aren’t against you since there are so few actually pursuing the jackpot actively.

I was looking at Eric’s life breakdown the other day when I was rewriting these articles, and I realized that life isn’t easy for him. He has a nice house (3 bedroom, 2 bath), but his mortgage is extreme. On his US$300,000 loan and home equity line, he’s paying about US$1900 a month in housing debt. That’s about US$1525 a month in interest going into his 5th year of ownership. If my calculations are correct, he still owns US$270,000 on a house that will fall in value due to the over-inflation of the housing market. For 5 years, he basically rented from a bank, except the bank didn’t pay for maintenance and taxes. I know what his taxes are thanks to Cook County, Illinois’ property tax assessor’s webste: he’s paying about US$3100 a year. Including homeowner’s insurance, he’s paying about US$2300 a month to live there, or about 38% of the gross household income. Ouch. Even worse, 31% of his gross household income goes to interest, taxes and insurance — not including maintenance. No wonder he’s unhappy.

Eric makes fun of my living situation: owning multiple mobile homes rather than a tract home (they’re built similarly, but my primary mobile home is twice as efficient as his house is, if not 3x as efficient). I live in 1200 square feet right now, versus his 1600 square feet (plus he has a basement to store all his junk in). My monthly cost of living is US$500 for lot rent, US$8 for property taxes and US$18 for very good insurance — about 8.7% of his gross annual income. I can buy a mobile home today in my owner-occupied modern middle-class mobile park for under US$8000 as a “walk-away” where the owner needs to move but can’t easily because he has a lease to get out of and a mobile home to sell. Mobile home sales can be finnicky unless you have the funds to owner-finance. Most owners don’t. US$8000 is what Eric’s family pays in just interest alone over 5/6 months.

I’m not embarassed about my living situation — I used to be when I lived in a huge house 2 miles away from my mobile home community. I couldn’t really afford it, but it was huge and everyone was jealous of me until they all upgraded to even bigger homes. Now they’re jealous of me because they can’t keep up with that lifestyle. I’m not jealous of anyone because I know my life revolves around reaping what I sow — when I screw up, it costs me down the line if I am greedy or stupid. There’s an old adage that you can’t drive your home but you can live in your car. I CAN drive my home if I need to. I can even walk away from it entirely and let the community take it to auction off. It isn’t a big concern. While Eric continues to try to draw full houses in his poker machine, slowly watching his nut/nest-egg run dry, I am able to play riskier on grabbing that Royal Flush, and if my nut runs dry, it won’t put me out of business since it isn’t my nest-egg, too.

I keep thinking of taking a long hiatus for a year to focus on my faith ministry and on my writing. I figured I could do it, balance some of that off-time by working on new business skills, and coming back to the market a year or two down the line refreshed and more efficient through learning new tricks of the trade. I’m already halfway there, significantly cutting my customer-base down and my free time higher. I haven’t felt a big financial burden from diminishing my income, but I have felt a huge spiritual lift from not being so profit-focused. Rather than hoping for a 5% raise as Eric does, I cut my income by 30% but cut my expenses by 92%. I feel about 6 times wealthier because of it. My friends still laugh behind my back (and to my face), because they’re happy with the full houses and the two-pairs that life deals them. But soon, those full-houses and two-pairs turn into a dry-streak, and the lack of Royal Flushes and Straight Flushes means that their nest-egg is gone.

So what is a person to do that is 35 years old, with 33% of their work years behind them but another 25 years of payments to make to be debt-free? I believe the first step is to get rid of pride — it is pride that turns into ego that turns into risky life choices that can ruin your future free time and happiness. Think about what everyone else is probably paying for what they have, and you might see that they’re not being honest about their stability, too. When they say that the equity in their home is their best investment, remind them that they’re probably paying 90% to interest and 10% to equity — and that they don’t have a free-and-clear title to anything, so they really don’t own a majority of anything. That’s not pride at that point, it is a horrific gamble. It is like dropping a AKQJ suited hand with an unsuited 4, in order to try to get a pair of 4’s that win nothing. It is easy to say that you were hope for 4-4’s after the fact, to cover up that you really didn’t realize well in advance that your definition of living is “just getting by and hoping things get better.”

The articles of this series are:
1. “I can’t do it anymore.”
2. The balance of living.
3. The reality of time preference.
4. The future is usually the same as the past.
5. How to make big changes that don’t feel huge.
6. How to focus on reality versus fakeness when dealing with others.
7. A simple 10-step plan for an 18 year-old just starting out.
8. A moderate 10-step plan for a 26 year-old who is on the verge of prideful living.
9. A much-needed 10-step plan for a 34 year-old who is fearful of the future.
10. Why it might be too late for the 42 year-old who lived beyond their means and still does.

Eric CAN do it, but he just can’t do it the way that he IS doing it. He has to do something, and I hope that these articles can help. Few will agree with them, but I hope that if your life starts to head in Eric’s direction, you might recall where to find the archive and put it to good use. Even better, I’d love to hear how you balance certain thoughts behind my reasoning for how I define living. Discuss it at the accountability and responsibility forum.