Adults rule the world. That is a fact of life. I can clearly remember as a teenager being quite mystified about that fact. Why aren’t teenagers ruling the world?
There are seven times as many adults as there are teenagers. In other words, if a UFO flew over the earth tomorrow and beamed up all of the teenagers, the world would hardly notice. In the grand scheme of things, teenagers are insignificant.
So why do you and most other teenagers feel that teenagers outnumber adults? It’s because the world you live in creates a strange illusion for you. During most of your life you have lived in a school environment that concentrates children and teens together. Right now you spend a majority of your life in a classroom where there are 20 or 30 teenagers and 1 adult. The family structure supports the illusion as well. In your own family there might be two or three kids and one or two parents. It seems like teenagers, therefore, make up at least half the population. What you are missing is the millions of adults that do not have children. There are a lot more of them than you imagine.
By sheer force of numbers adults rule the world. But there is another thing that causes adults to be in control: they own everything. They own all of the cars. They own all of the houses and apartment complexes. They own all of the businesses and skyscrapers. They own the government. They own all of the forests and weapons. They own it all.
These are very interesting facts, and they have interesting implications. You need to learn and understand one thing from them: Adults are in charge. There is nothing you can do to change this situation. Adults decide who get hired, fired, loans, and who gets a B or an A on their homework.
So why is that important for you to understand? If you are going to succeed - in fact, if you are going to accomplish anything at all, whether it be saving the environment or becoming a millionaire - you need to learn how to fit into the adult world. You need to become an adult yourself so that you are not in the insignificant fringe group called "teenagers." The sooner you learn to fit in to the adult environment, the better. The world simply does not make sense until you see it from an adult perspective, because adults own and operate everything.
The great thing is that you can start to become an adult today. The day you stop thinking about yourself as a teenager and start thinking and acting like an adult, you begin to become an adult. To do that, it is important to understand what it means to think and act like an adult. More on how to do that next.
Friday, April 30, 2010
Wednesday, April 28, 2010
So You Want To Run Away From Home?
What I would like to do in this post is show you how much money it takes to live a normal life in America. Once you understand that, adults and everything about them begin to make a lot more sense.
Lets say that you were to get totally fed up with your parents. In a fit of passion you decide at age 16 to run away from home. You hop a freight train and you end up in Atlanta, Georgia to begin your new life. Your goal is to live a normal lifenot an extravagant life, just a normal life. So, you are standing on a street corner in Atlanta. What is your first step?
First, you need an apartment. Every major city in America has apartment locator magazines, and you can find racks of them at grocery stores, convenience stores and so on. Pick one up some time. What you quickly find is that any "nice" apartment costs about $600 for a one-bedroom unit. A "nice" apartment has a pool, probably a club house, well-kept buildings, nice landscaping and so on. You realize that $600 a month is impossible. Where are you going to get $600 every month as a runaway? So you get a copy of the paper to look in the classified ads. What you find is that the cheapest apartment available is a "student" unit near the university. You go to take a look. It is really just half of the upstairs of an old house. It is a dump. No air conditioning, for example. Peeling paint. The carpeting is dirty and worn down. The toilet wont flush, but the man showing you the apartment says he will fix that. You can see all the pipes and they are all rusty. It is $350 a month. You also have to put down the last months rent and a security deposit of $300. Just to move in you need $1,000. Then you need $350 per month, every month. Now you need power for the apartment. You call the power company. They want $17 to turn on the power. Since you have no credit history, they also want a $200 security deposit. You ask the landlord for an estimate, and he says that the power bill will run about $250 per month in the winter because the apartment is heated with electric baseboard heaters, but it drops to $40 per month in the summer. The average is about $150 a month. You would also like to have a phone and cable TV. Cable is $50 a month and $70 to install it. The phone is $40 to install, $100 for a deposit and about $25 per month if you make no long distance calls.
Now you need some furniture for the apartment. You need a sofa, a chair, a living room table, a shelf, a TV, a table for the TV, a kitchen table and chairs, pots and pans, silverware, plates, utensils, a bed, a dresser, a night stand, several lamps, several phones and so on. Forget luxuries like a stereo, computer, VCR, XBox, etc. You have no money for those. You also need sheets, towels and blankets. If you were going to go out and buy nice stuff, and buy it all new, this would all cost thousands of dollars. You look in the classified ads and manage to find used stuff that is pretty beat up but serviceable and it all costs about $1,000. You end up renting a truck to pick it all up; that costs $100 for two days. The sheets, towels and blankets you get cheap at K-Mart for $70. You also spend $100 on paper towels, toilet paper, cleaning supplies, soap, toothpaste, shampoo, toothbrush, garbage bags, aluminum foil and so on. All of this is "stuff," but it is kind of hard to make it past the first day without toilet paper.
Now you need a car. The average price for a new car in America is over $20,000, and the cheapest new car you can buy is about $8,000, so thats out. You start looking for a used one. You know what you wanta hot, red, two-seat sports car. Unfortunately, you find that there are two kinds of used cars: nice ones and junkers. You cant afford the nice ones. The junkers look like crap and feel like they are going to fall apart any minute. You keep hunting until you find a 1986 Plymouth Horizon. It looks like hell because all the paint is peeling off and the seats are torn, but it seems to run well and the guy only wants $800. To buy it you need to transfer the title and get a license plate. The Department of Motor Vehicles wants $35 for the title, $25 for the plate, $24 in taxes and $2 to notarize everything. However, they wont give you the plate because you must have insurance and the car needs to be inspected. The inspection costs $25. The inspection station tells you that you must buy new tires, and they end up costing $250. The first insurance agent you call wont even talk to you because you are under 20. Neither will the second. Neither will the third. You eventually find an agent who will get you insurance, but it costs $1,800 per year. You have to pay the first $900 up front to activate the insurance.
Now you have a place to stay and a car. Certainly this is not a luxury situation. You are living in a dump with beat up furniture and a junky car. But you now have the essentials. So far it has cost you this much to get situated: When you ran away from home, you probably didnt happen to stick nearly $6,000 in your pocket. Where would you get that kind of money to begin with?
What this shows you is the "cost of entry" into an American lifestyle is high. Very high. Keep in mind that the example presented here is the absolute bottom of the barrel. It gets no cheaper than this and it gets significantly more expensive for anything nicer.
Now that you are on your own you have monthly expenses. Some we talked about above. Several we have not discussed yet, like food, gasoline, car repairs, clothes, property taxes, etc.
The car maintenance includes gasoline and regular maintenance like oil changes, new tires, repairs, etc. The random category handles all the random unexpected things that crop up without warning. Property taxes are a good example. Parking tickets. Drivers license renewal. Money you lose. Things like that.
Note that this monthly budget includes no luxuries or entertainment: no dinners out, movies, dates, videos, CDs, books, magazines, trips, vacations, air conditioning, cell phones, beer, cigarettes and so on. If you smoke, that simple fact alone can add up to $100 a month to your monthly expenses. Beer could add $50. Note again that this is a bottom of the barrel existence. You can double this number if you want to live in a nice place, drive a nice car, have some normal luxuries and so on.
At the same time you were forgetting to grab $5,000 as you walked out your parents door, you probably also forgot to grab the $1,300 you need for this month. Or the $1,300 you need for next month. Or Therefore, you need a job.
So far we have ignored the income side of all of this. You should keep in mind that none of the above could have happened if you did not have a job first. You could not get an apartment without a job. Or a phone. Or power. Or car insurance. You must have the job first. Every single place you go to will ask for your job history and credit references. You have none. We have ignored that fact for the sake of the example. What you know is that you need $5,000 to get started and $1,300 per month to live your life.
Since you dropped out of high school to run away, you dont have a high school diploma. Therefore, the only place you can get a job is at a fast food place. It pays $5.00 an hour. You do some quick math. If you work 10 hours a day, 6 days a week, you can make $300 a week. Of course, no place will let you work more than 40 hours a week because of overtime restrictions. So you work at one restaurant 40 hours per week and another restaurant 20 hours per week. That earns you just about exactly $1,300 a month in a 31-day month. Just enough to squeeze by.
Who wants to work 10 hours a day, 6 days a week scrubbing toilets and flipping burgers? The problem is, what choice do you have? If you want to live in this trashy apartment, you have to make money. If you want to drive this trashy car, you have to make money. If you want to eat, you have to make money. You have no choice. With this job you can at least break even on monthly expenses.
Maybe once you get situated for a month or two you can figure something else out. Unfortunately, you have miscalculated. You have forgotten about taxes. When you get your first pay check you are stunned to find that the federal government has erased 15% of your check. The social security administration and Medicare has lifted 7.5%.
You are nowhere close to breaking even. So what are you going to cut? Medical insurance is probably the first thing to go, but that is extremely, incredibly risky. Even the simplest illness can cost several hundred dollars by the time you cover the office visit to the doctor and the cost of prescription drugs; if you get in a car wreck you will be in debt for life. Now you have to cut another $200. So you cut cable. What else, exactly, are you going to cut? Food? Phone? Clothes? You cant move to a cheaper apartment. You cant get a cheaper car. You are already at the bottom.
So, you are working 10 hours a day, 6 days a week. You live in a dump with junky furniture and a trashy car. You have no health insurance, no cable TV, no phone, no clothes, and you are eating what you can at work and going hungry on Sunday.
Now what? Are you starting to get the picture? This, by the way, is the definition of poverty. When you hear about "Americans living in poverty," this is what they are talking about: this sort of crappy, 60-hours a week, no way out, cant make ends meet sort of existence. You are scraping by at the absolute bottom on the barrel, and if anything goes wrong you are dead. If your car blows its engine, or you get a speeding ticket and your insurance goes up, or you get sick one week, oryou are out on the street. There is absolutely no slack in your budget. Once you are out on the street, it will cost you another $4,000 or $5,000 to get back on your feet again. So you are permanently stuck.
You must do something with your life so you can make more than minimum wage. It is impossible to survive on minimum wage. When you hear adults constantly talking about a "good job" so they sound like a broken record, thats why. It takes about $20,000 a year just to get by in this country.
You dont mind making minimum wage when you are a teenager living with your parents because it is gravy. Your parents are paying the rent, buying food, covering all the bills, giving you clothes and loaning you a car. You should now see that minimum wage wont cut it when you are out on your own.
You really need your family to help you get started in "real life." How else can you handle that $5,000 start-up fee? There is no way to start a household for any less than $5,000. Your parents can help you with expenses, loan you furniture, and so on.
If you were to actually find yourself in this position, it would be difficult to get out of it. When you are working 10 hours a day, 6 days a week, there isnt a lot of time for anything else. The only way to get a better job is to get more education. But when, exactly, are you going to get it?
A person in this position has no freedom. You are absolutely stuck in that rut and there is no way out. You get up every day and go to work, then you come home dead tired and feel like you are trapped in a prison cell. Money is freedom.
Right now you might be thinking, "There are lots of jobs out there that pay a lot more than minimum wage. Ill get one of those jobs. Its easy." Keep this in mind: Median income for the U.S. in 1997 is $23,000. That means half of the jobs in this country pay less than that. All of the jobs paying better than that are being fought for by all the people in America who give a damn. You arent just going to walk into an office one day and be handed an easy $30,000 a year job. There are 100 other people in line trying to get that job just like you.
Running Away from Home Sucks!
When teenagers decide to "run away from home" they aren't thinking about the financial Implications of what they are doing. They just want out. They aren't thinking, "Let's see, to live a minimal American life the cost of entry is $6,000, so I need to raise that money prior to departure and then" Instead they take off, end up in a city, and immediately are destitute. They have no money, no food, and no place to stay. There is no way to get a job and no other way to make money. Someone eventually suggests or forces drugs or prostitution. And there it is.
Lets say that you were to get totally fed up with your parents. In a fit of passion you decide at age 16 to run away from home. You hop a freight train and you end up in Atlanta, Georgia to begin your new life. Your goal is to live a normal lifenot an extravagant life, just a normal life. So, you are standing on a street corner in Atlanta. What is your first step?
First, you need an apartment. Every major city in America has apartment locator magazines, and you can find racks of them at grocery stores, convenience stores and so on. Pick one up some time. What you quickly find is that any "nice" apartment costs about $600 for a one-bedroom unit. A "nice" apartment has a pool, probably a club house, well-kept buildings, nice landscaping and so on. You realize that $600 a month is impossible. Where are you going to get $600 every month as a runaway? So you get a copy of the paper to look in the classified ads. What you find is that the cheapest apartment available is a "student" unit near the university. You go to take a look. It is really just half of the upstairs of an old house. It is a dump. No air conditioning, for example. Peeling paint. The carpeting is dirty and worn down. The toilet wont flush, but the man showing you the apartment says he will fix that. You can see all the pipes and they are all rusty. It is $350 a month. You also have to put down the last months rent and a security deposit of $300. Just to move in you need $1,000. Then you need $350 per month, every month. Now you need power for the apartment. You call the power company. They want $17 to turn on the power. Since you have no credit history, they also want a $200 security deposit. You ask the landlord for an estimate, and he says that the power bill will run about $250 per month in the winter because the apartment is heated with electric baseboard heaters, but it drops to $40 per month in the summer. The average is about $150 a month. You would also like to have a phone and cable TV. Cable is $50 a month and $70 to install it. The phone is $40 to install, $100 for a deposit and about $25 per month if you make no long distance calls.
Now you need some furniture for the apartment. You need a sofa, a chair, a living room table, a shelf, a TV, a table for the TV, a kitchen table and chairs, pots and pans, silverware, plates, utensils, a bed, a dresser, a night stand, several lamps, several phones and so on. Forget luxuries like a stereo, computer, VCR, XBox, etc. You have no money for those. You also need sheets, towels and blankets. If you were going to go out and buy nice stuff, and buy it all new, this would all cost thousands of dollars. You look in the classified ads and manage to find used stuff that is pretty beat up but serviceable and it all costs about $1,000. You end up renting a truck to pick it all up; that costs $100 for two days. The sheets, towels and blankets you get cheap at K-Mart for $70. You also spend $100 on paper towels, toilet paper, cleaning supplies, soap, toothpaste, shampoo, toothbrush, garbage bags, aluminum foil and so on. All of this is "stuff," but it is kind of hard to make it past the first day without toilet paper.
Now you need a car. The average price for a new car in America is over $20,000, and the cheapest new car you can buy is about $8,000, so thats out. You start looking for a used one. You know what you wanta hot, red, two-seat sports car. Unfortunately, you find that there are two kinds of used cars: nice ones and junkers. You cant afford the nice ones. The junkers look like crap and feel like they are going to fall apart any minute. You keep hunting until you find a 1986 Plymouth Horizon. It looks like hell because all the paint is peeling off and the seats are torn, but it seems to run well and the guy only wants $800. To buy it you need to transfer the title and get a license plate. The Department of Motor Vehicles wants $35 for the title, $25 for the plate, $24 in taxes and $2 to notarize everything. However, they wont give you the plate because you must have insurance and the car needs to be inspected. The inspection costs $25. The inspection station tells you that you must buy new tires, and they end up costing $250. The first insurance agent you call wont even talk to you because you are under 20. Neither will the second. Neither will the third. You eventually find an agent who will get you insurance, but it costs $1,800 per year. You have to pay the first $900 up front to activate the insurance.
Now you have a place to stay and a car. Certainly this is not a luxury situation. You are living in a dump with beat up furniture and a junky car. But you now have the essentials. So far it has cost you this much to get situated: When you ran away from home, you probably didnt happen to stick nearly $6,000 in your pocket. Where would you get that kind of money to begin with?
What this shows you is the "cost of entry" into an American lifestyle is high. Very high. Keep in mind that the example presented here is the absolute bottom of the barrel. It gets no cheaper than this and it gets significantly more expensive for anything nicer.
Now that you are on your own you have monthly expenses. Some we talked about above. Several we have not discussed yet, like food, gasoline, car repairs, clothes, property taxes, etc.
The car maintenance includes gasoline and regular maintenance like oil changes, new tires, repairs, etc. The random category handles all the random unexpected things that crop up without warning. Property taxes are a good example. Parking tickets. Drivers license renewal. Money you lose. Things like that.
Note that this monthly budget includes no luxuries or entertainment: no dinners out, movies, dates, videos, CDs, books, magazines, trips, vacations, air conditioning, cell phones, beer, cigarettes and so on. If you smoke, that simple fact alone can add up to $100 a month to your monthly expenses. Beer could add $50. Note again that this is a bottom of the barrel existence. You can double this number if you want to live in a nice place, drive a nice car, have some normal luxuries and so on.
At the same time you were forgetting to grab $5,000 as you walked out your parents door, you probably also forgot to grab the $1,300 you need for this month. Or the $1,300 you need for next month. Or Therefore, you need a job.
So far we have ignored the income side of all of this. You should keep in mind that none of the above could have happened if you did not have a job first. You could not get an apartment without a job. Or a phone. Or power. Or car insurance. You must have the job first. Every single place you go to will ask for your job history and credit references. You have none. We have ignored that fact for the sake of the example. What you know is that you need $5,000 to get started and $1,300 per month to live your life.
Since you dropped out of high school to run away, you dont have a high school diploma. Therefore, the only place you can get a job is at a fast food place. It pays $5.00 an hour. You do some quick math. If you work 10 hours a day, 6 days a week, you can make $300 a week. Of course, no place will let you work more than 40 hours a week because of overtime restrictions. So you work at one restaurant 40 hours per week and another restaurant 20 hours per week. That earns you just about exactly $1,300 a month in a 31-day month. Just enough to squeeze by.
Who wants to work 10 hours a day, 6 days a week scrubbing toilets and flipping burgers? The problem is, what choice do you have? If you want to live in this trashy apartment, you have to make money. If you want to drive this trashy car, you have to make money. If you want to eat, you have to make money. You have no choice. With this job you can at least break even on monthly expenses.
Maybe once you get situated for a month or two you can figure something else out. Unfortunately, you have miscalculated. You have forgotten about taxes. When you get your first pay check you are stunned to find that the federal government has erased 15% of your check. The social security administration and Medicare has lifted 7.5%.
You are nowhere close to breaking even. So what are you going to cut? Medical insurance is probably the first thing to go, but that is extremely, incredibly risky. Even the simplest illness can cost several hundred dollars by the time you cover the office visit to the doctor and the cost of prescription drugs; if you get in a car wreck you will be in debt for life. Now you have to cut another $200. So you cut cable. What else, exactly, are you going to cut? Food? Phone? Clothes? You cant move to a cheaper apartment. You cant get a cheaper car. You are already at the bottom.
So, you are working 10 hours a day, 6 days a week. You live in a dump with junky furniture and a trashy car. You have no health insurance, no cable TV, no phone, no clothes, and you are eating what you can at work and going hungry on Sunday.
Now what? Are you starting to get the picture? This, by the way, is the definition of poverty. When you hear about "Americans living in poverty," this is what they are talking about: this sort of crappy, 60-hours a week, no way out, cant make ends meet sort of existence. You are scraping by at the absolute bottom on the barrel, and if anything goes wrong you are dead. If your car blows its engine, or you get a speeding ticket and your insurance goes up, or you get sick one week, oryou are out on the street. There is absolutely no slack in your budget. Once you are out on the street, it will cost you another $4,000 or $5,000 to get back on your feet again. So you are permanently stuck.
You must do something with your life so you can make more than minimum wage. It is impossible to survive on minimum wage. When you hear adults constantly talking about a "good job" so they sound like a broken record, thats why. It takes about $20,000 a year just to get by in this country.
You dont mind making minimum wage when you are a teenager living with your parents because it is gravy. Your parents are paying the rent, buying food, covering all the bills, giving you clothes and loaning you a car. You should now see that minimum wage wont cut it when you are out on your own.
You really need your family to help you get started in "real life." How else can you handle that $5,000 start-up fee? There is no way to start a household for any less than $5,000. Your parents can help you with expenses, loan you furniture, and so on.
If you were to actually find yourself in this position, it would be difficult to get out of it. When you are working 10 hours a day, 6 days a week, there isnt a lot of time for anything else. The only way to get a better job is to get more education. But when, exactly, are you going to get it?
A person in this position has no freedom. You are absolutely stuck in that rut and there is no way out. You get up every day and go to work, then you come home dead tired and feel like you are trapped in a prison cell. Money is freedom.
Right now you might be thinking, "There are lots of jobs out there that pay a lot more than minimum wage. Ill get one of those jobs. Its easy." Keep this in mind: Median income for the U.S. in 1997 is $23,000. That means half of the jobs in this country pay less than that. All of the jobs paying better than that are being fought for by all the people in America who give a damn. You arent just going to walk into an office one day and be handed an easy $30,000 a year job. There are 100 other people in line trying to get that job just like you.
Running Away from Home Sucks!
When teenagers decide to "run away from home" they aren't thinking about the financial Implications of what they are doing. They just want out. They aren't thinking, "Let's see, to live a minimal American life the cost of entry is $6,000, so I need to raise that money prior to departure and then" Instead they take off, end up in a city, and immediately are destitute. They have no money, no food, and no place to stay. There is no way to get a job and no other way to make money. Someone eventually suggests or forces drugs or prostitution. And there it is.
Tuesday, April 27, 2010
Why Are Adults So Concerned with Money? What's their Deal?
For any normal adult living in America today money ranks right up there next to oxygen. Without money you cannot eat. You have no place to sleep. You cannot drive. You have no freedom. If you dont have money, you are forced to live in a homeless shelter or on the street. If you have ever been to a homeless shelter, you can understand why that is not an appetizing option. It is this simple reality that causes adults to be so concerned about money.
Most teenagers do not understand the importance of money. They also do not understand the amount of money that is required to live a normal life. This occurs for a very simple reason. Parents provide teenagers with everything. Teenagers, therefore, live in a dream world. The moment you exit this dream world and have to live life yourself, your opinions about money will change dramatically.
Just what does it takes to live a normal life in America. Once you understand this, adults and everything about them begin to make a lot more sense. Here are some cold hard facts:
IF YOU DONT PAY THE RENT, YOU ARE HOMELESS
It turns out that this is the central reality from which adults derive all their decisions. Almost everything else adults do makes sense once you realize, understand and appreciate this fact of life. Right now you are oblivious to this fact of life because by living with your parents you are living in a dream world. Once you leave this dream world and start living on your own, you will be acutely aware of this particular fact of life. Given that central reality, you can quickly derive a second fact of life:
YOU MUST HAVE A JOB TO PAY THE RENT
No matter what you do, you need a place to live and you have to eat. Therefore, you must have a job. You have two choices when you look for jobs: good ones and all the rest. The time to start preparing yourself for a good job is during your time as a teenager when you can control things like finishing high school, going to college and so on.
Third fact of life, WORKING 60 HOURS A WEEK IN A DEAD-END, MINIMUM WAGE JOB ONLY
TO LIVE IN A CRAPPY APARTMENT WITH NO A/C REALLY STINKS ( I will explain why in tomorrows post)
EVEN IF YOU DONT CARE ONE BIT ABOUT ADULTS AND JOBS AND SCHOOL RIGHT NOW, YOU WILL ONCE YOU HAVE TO PAY THE RENT
You might not care about jobs and money now, but that is only because you dont have to. You are able to sponge off your parents as a teenager, so you dont have a care in the world. A few minutes after leaving your parents house to start out on your own you will care about a job. You will care how much you make. You will care how much rent costs. You will suddenly care very deeply, because you will have no choice. That is a fact of life. If you are looking through magazines as a teenager thinking, "Wow, when Im older I am going to drive a Corvette and live in a great big house," you need to start planning your life today. It turns out it is not as easy as you think. If it was, you would have a Corvette now.
Now lets look at your parents. What is motivating them? They are faced with these same money concerns every day. The difference is that if they mess up its not one person who ends up on the street; its the whole family. Even if you live in what appears to be an extremely safe, suburban neighborhood, you might be surprised at how precarious things might be under the covers. It really depends on how good your parents are at managing their money. Lets say that your father has an extremely good job. He is making $60,000 a year. His job covers his health insurance and gives him two weeks of paid vacation per year. You live in a nice, four-bed-room home. You have two cars: your mother drives a nice, two-year-old mini-van and your father drives a 1978 Dodge Dart that you despise. You have a brother (also a teenager) and a sister (10 years old). Your mother stays at home.
Lets look at a likely monthly budget for the household. Lets say that the house cost $140,000 when your parents purchased it 5 years ago. They paid $10,000 down and locked in a fixed rate 30-year mortgage at 8.5%. That means the monthly mortgage payment on it is about $1,000 per month. They pay about $40 per month for homeowners insurance and about $100 per month in property taxes. The house also needs to be maintained at a rate of perhaps $50 per month.
This covers things like a new furnace, water damage, roof repair, repainting, recarpeting, new appliances and so on. On the car side the monthly payment on the mini-van is about $400. Car insurance is about $100 per month. Car maintenance, gas, etc. on the two cars is about $200 per month. Food is running about $300 per month. Power/water/sewer/gas is about $200 on average per month. The phone plus long distance is running $80 per month. Cable is $50.
Your parents also have other goals. If they are smart, they are saving between $6,000 and $9,000 per year for retirement. They are also putting something aside to cover future college costs. They also have some kind of life and disability insurance.
Even though your father has an exceptionally good job at $60,000 per year, barely half of it ($35,000) actually makes it home. You can see taxes take a gigantic bite out of his paycheck. That is why your parents may often rant about taxes and politicians, by the way. Anytime you have someone taking $20,000 a year out of your pocket you are going to complain.
Your parents do not have an extravagant lifestyle. They live in a respectable but certainly not elaborate home in an inexpensive part of the country (the house would cost twice as much in California, for example). They have two cars, but neither is a show-stopper. They have no luxury items like a boat or an RV or a $10,000 home theater system or a cell phone. And yet, monthly expenses almost exactly match monthly income.
What this budget does not include are things like Christmas, birthdays, family vacations, dining out, movies, newspapers and magazines, ballet lessons for little Suzy, soccer equipment, school pictures, yearbooks and on and on and on. You can see exactly why your father drives a 1978 Dodge Dart. What choice does he have? Sure, he'd like a fancy car, but its impossible. You can also see why your parents are fairly tight when you ask for anything. Where, exactly, is the money going to come from? If you want a $100 pair of sneakers, that blows the clothing budget for the month. If anything goes wrong it is a big problem. If a major expense pops up unexpectedly (for example, braces or eyeglasses for one of the kids), then your parents have to borrow the money for it, and they are going to have to cut back somewhere else to pay back the loan. The most likely thing they will cut is the retirement withholding.
This explains why an extremely large percentage of adults in America (more than half) have inadequate retirement plans. The next thing they will cut is the college fund.
Why is your mother working or thinking about getting a job? To earn some extra money to cover things like Christmas and birthdays and family vacations. Why does your father sometimes complain about work but still go in every day? Because if he doesn't the whole family is in a very bad place. Note that there is no line item in the budget for "emergency savings." If your father loses his job, it is going to cause a tremendous amount of difficulty and there will not be a lot of good options.
Remember that at one point in their lives your parents were teenagers once. They had all of the dreams you have now nice cars, fancy trips, expensive stereos and so on. They wanted it all, just like you. All of it has been put aside so that the family budget will balance. Whenever you ask for an expensive Christmas gift and get it, that is a gift that your parents cannot give to themselves. It is when you begin to realize the level of sacrifice your parents made to raise you and the amount of financial juggling they did to give you what you wanted that you begin to truly respect and appreciate them. That process starts perhaps at age 20 or 25, but doesnt really hit you until you are into your 30s and raising your own family. It is not something you, nor your peers, ever realize or appreciate as a teenager.
Tomorrow we will discuss just what it takes to leave your parents home, or run away. Doesn't that sound like a great plan....stay tuned!
Most teenagers do not understand the importance of money. They also do not understand the amount of money that is required to live a normal life. This occurs for a very simple reason. Parents provide teenagers with everything. Teenagers, therefore, live in a dream world. The moment you exit this dream world and have to live life yourself, your opinions about money will change dramatically.
Just what does it takes to live a normal life in America. Once you understand this, adults and everything about them begin to make a lot more sense. Here are some cold hard facts:
IF YOU DONT PAY THE RENT, YOU ARE HOMELESS
It turns out that this is the central reality from which adults derive all their decisions. Almost everything else adults do makes sense once you realize, understand and appreciate this fact of life. Right now you are oblivious to this fact of life because by living with your parents you are living in a dream world. Once you leave this dream world and start living on your own, you will be acutely aware of this particular fact of life. Given that central reality, you can quickly derive a second fact of life:
YOU MUST HAVE A JOB TO PAY THE RENT
No matter what you do, you need a place to live and you have to eat. Therefore, you must have a job. You have two choices when you look for jobs: good ones and all the rest. The time to start preparing yourself for a good job is during your time as a teenager when you can control things like finishing high school, going to college and so on.
Third fact of life, WORKING 60 HOURS A WEEK IN A DEAD-END, MINIMUM WAGE JOB ONLY
TO LIVE IN A CRAPPY APARTMENT WITH NO A/C REALLY STINKS ( I will explain why in tomorrows post)
EVEN IF YOU DONT CARE ONE BIT ABOUT ADULTS AND JOBS AND SCHOOL RIGHT NOW, YOU WILL ONCE YOU HAVE TO PAY THE RENT
You might not care about jobs and money now, but that is only because you dont have to. You are able to sponge off your parents as a teenager, so you dont have a care in the world. A few minutes after leaving your parents house to start out on your own you will care about a job. You will care how much you make. You will care how much rent costs. You will suddenly care very deeply, because you will have no choice. That is a fact of life. If you are looking through magazines as a teenager thinking, "Wow, when Im older I am going to drive a Corvette and live in a great big house," you need to start planning your life today. It turns out it is not as easy as you think. If it was, you would have a Corvette now.
Now lets look at your parents. What is motivating them? They are faced with these same money concerns every day. The difference is that if they mess up its not one person who ends up on the street; its the whole family. Even if you live in what appears to be an extremely safe, suburban neighborhood, you might be surprised at how precarious things might be under the covers. It really depends on how good your parents are at managing their money. Lets say that your father has an extremely good job. He is making $60,000 a year. His job covers his health insurance and gives him two weeks of paid vacation per year. You live in a nice, four-bed-room home. You have two cars: your mother drives a nice, two-year-old mini-van and your father drives a 1978 Dodge Dart that you despise. You have a brother (also a teenager) and a sister (10 years old). Your mother stays at home.
Lets look at a likely monthly budget for the household. Lets say that the house cost $140,000 when your parents purchased it 5 years ago. They paid $10,000 down and locked in a fixed rate 30-year mortgage at 8.5%. That means the monthly mortgage payment on it is about $1,000 per month. They pay about $40 per month for homeowners insurance and about $100 per month in property taxes. The house also needs to be maintained at a rate of perhaps $50 per month.
This covers things like a new furnace, water damage, roof repair, repainting, recarpeting, new appliances and so on. On the car side the monthly payment on the mini-van is about $400. Car insurance is about $100 per month. Car maintenance, gas, etc. on the two cars is about $200 per month. Food is running about $300 per month. Power/water/sewer/gas is about $200 on average per month. The phone plus long distance is running $80 per month. Cable is $50.
Your parents also have other goals. If they are smart, they are saving between $6,000 and $9,000 per year for retirement. They are also putting something aside to cover future college costs. They also have some kind of life and disability insurance.
Even though your father has an exceptionally good job at $60,000 per year, barely half of it ($35,000) actually makes it home. You can see taxes take a gigantic bite out of his paycheck. That is why your parents may often rant about taxes and politicians, by the way. Anytime you have someone taking $20,000 a year out of your pocket you are going to complain.
Your parents do not have an extravagant lifestyle. They live in a respectable but certainly not elaborate home in an inexpensive part of the country (the house would cost twice as much in California, for example). They have two cars, but neither is a show-stopper. They have no luxury items like a boat or an RV or a $10,000 home theater system or a cell phone. And yet, monthly expenses almost exactly match monthly income.
What this budget does not include are things like Christmas, birthdays, family vacations, dining out, movies, newspapers and magazines, ballet lessons for little Suzy, soccer equipment, school pictures, yearbooks and on and on and on. You can see exactly why your father drives a 1978 Dodge Dart. What choice does he have? Sure, he'd like a fancy car, but its impossible. You can also see why your parents are fairly tight when you ask for anything. Where, exactly, is the money going to come from? If you want a $100 pair of sneakers, that blows the clothing budget for the month. If anything goes wrong it is a big problem. If a major expense pops up unexpectedly (for example, braces or eyeglasses for one of the kids), then your parents have to borrow the money for it, and they are going to have to cut back somewhere else to pay back the loan. The most likely thing they will cut is the retirement withholding.
This explains why an extremely large percentage of adults in America (more than half) have inadequate retirement plans. The next thing they will cut is the college fund.
Why is your mother working or thinking about getting a job? To earn some extra money to cover things like Christmas and birthdays and family vacations. Why does your father sometimes complain about work but still go in every day? Because if he doesn't the whole family is in a very bad place. Note that there is no line item in the budget for "emergency savings." If your father loses his job, it is going to cause a tremendous amount of difficulty and there will not be a lot of good options.
Remember that at one point in their lives your parents were teenagers once. They had all of the dreams you have now nice cars, fancy trips, expensive stereos and so on. They wanted it all, just like you. All of it has been put aside so that the family budget will balance. Whenever you ask for an expensive Christmas gift and get it, that is a gift that your parents cannot give to themselves. It is when you begin to realize the level of sacrifice your parents made to raise you and the amount of financial juggling they did to give you what you wanted that you begin to truly respect and appreciate them. That process starts perhaps at age 20 or 25, but doesnt really hit you until you are into your 30s and raising your own family. It is not something you, nor your peers, ever realize or appreciate as a teenager.
Tomorrow we will discuss just what it takes to leave your parents home, or run away. Doesn't that sound like a great plan....stay tuned!
Money, Money, Money, Money
Have you ever wondered why so many adults spend so much time worrying about money? Why do millions of adults get up every morning and go to work for 8 or 10 hours a day? Why do adults spend so much time discussing taxes and prices and the cost of living? Why are news shows and newspapers so full of economic news? Why do married couples frequently fight about money? To understand adults, you have to understand money. Once you understand money, adults make a lot more sense. That will be my next series of topics. Money Matters and I mean it REALLY matters.
Monday, April 26, 2010
You Have the POWER to Define Your Life
How many times have you heard this question, "What do you want to be when you grow up?" As a teenager you will hear this question a lot, but you have probably heard it since you were three years old. It is often connected to, "Where do you want to go to college?" and "What will be your major?" and "What are you good at?"
You may also be asking yourself the same questions. You may find that you suddenly beginning to ask yourself, "What am I going to do with my life?"This is a good thing. You are in a position of incredible power when you ask yourself questions like, "Who am I?" and "Who do I want to become?" You are the only person who can answer these questions. You, and only you, get to choose exactly who you will become in the future.
Think about this for a minute. The power of these questions lies in the fact that you can choose to become anything you want! Imagine becoming anything. Think about the freedom that gives you. The great thing about being a teenager is that you are a blank slate. You can pick almost any answer to the question, "Who do I want to become?" at this point in your life, and you are in a unique position to make it happen. You can, to a large extent, design your life completely from scratch. You get to make thousands of choices that will determine exactly who you will become as an adult. Choices like these:
What will I choose for my career?
How much money will I make, and why?
Who will I marry?
How many children will I have?
How will I dress?
Where will I live?
What kind of car will I drive?
Will I go to college, and if so which one will I attend?
What will be my major in college?
What will be my attitude toward life?
What will be my values?
Will I smoke? Will I take drugs?
What sports do I want to play?
And so on...
As you can see, the answers to all of these questions are wide open for you at this age. You could decide today, "By age 30 I will be an architect in Montana, and I will drive a red Mercedes." And you could make that happen. There is absolutely nothing to stop you. You could decide on just about any course and make it happen in just the same way. At no other point in your life do you have the absolute freedom of choice that you have as a teenager. That is not to say that you cannot change your mind later. You can completely redesign your life from scratch at age 30 or 40 if you find that to be appropriate. It simply is a fact that as a teenager all of these questions are wide open and you get to select the initial answers for all of them from an infinite pool. That is a lot of freedom.
The average teenager often faces significant problems in making all of these choices:
Most teenagers never realize that they have total control of their lives. The questions "Who am I?" and "Who do I want to become?" never quite make it up into the average teenager’s conscious mind, so life just sort of bumbles along letting things happen randomly. These teenagers miss a great opportunity because they miss the possibility of becoming anything they want. Your range of options is wide open as a teenager.
Most teenagers do not understand the realities of the world into which they are about to enter. American society is an exciting but tough environment. It requires quite a bit of knowledge to become successful in this environment. As a teenager you are fairly naïve about the real world
Most teenagers also live in a protected dreamland created by their parents. That is probably hard (or impossible) for you to imagine, but it is definitely the case. It is easy for you to make mistakes that can affect you negatively for the rest of your life.
Most teenagers do not believe in themselves, nor do they believe that there is any way to improve their odds of success. No matter what path you choose to follow in your life, you have to be confident and believe in yourself in order to succeed. You also need to learn key facts and techniques that will improve your odds of succeeding. One of the best ways to get started is to simply ask the people around you for their thoughts and ideas, especially adults. Another is to experiment, and your time as a teenager is a great time for that sort of experimentation.
As a teenager you can explore a whole set of options to learn more about yourself and the world around you. You can pick something you really want to do well and you can go do it right now. You don’t have to amorphously think, "Acting might be fun…" Instead say, "I am going to be an actor!" and then pursue it. You can audition for acting parts. You can find some friends and do plays together. One of the great things about being a teenager is that you can pursue many things at once. You can also afford to fail, and you don’t have to worry about it if you do. Head in a direction and see what you find there.
I hope I have at least captured your attention and will provide more detail and information in the coming days...stay tuned!
You may also be asking yourself the same questions. You may find that you suddenly beginning to ask yourself, "What am I going to do with my life?"This is a good thing. You are in a position of incredible power when you ask yourself questions like, "Who am I?" and "Who do I want to become?" You are the only person who can answer these questions. You, and only you, get to choose exactly who you will become in the future.
Think about this for a minute. The power of these questions lies in the fact that you can choose to become anything you want! Imagine becoming anything. Think about the freedom that gives you. The great thing about being a teenager is that you are a blank slate. You can pick almost any answer to the question, "Who do I want to become?" at this point in your life, and you are in a unique position to make it happen. You can, to a large extent, design your life completely from scratch. You get to make thousands of choices that will determine exactly who you will become as an adult. Choices like these:
What will I choose for my career?
How much money will I make, and why?
Who will I marry?
How many children will I have?
How will I dress?
Where will I live?
What kind of car will I drive?
Will I go to college, and if so which one will I attend?
What will be my major in college?
What will be my attitude toward life?
What will be my values?
Will I smoke? Will I take drugs?
What sports do I want to play?
And so on...
As you can see, the answers to all of these questions are wide open for you at this age. You could decide today, "By age 30 I will be an architect in Montana, and I will drive a red Mercedes." And you could make that happen. There is absolutely nothing to stop you. You could decide on just about any course and make it happen in just the same way. At no other point in your life do you have the absolute freedom of choice that you have as a teenager. That is not to say that you cannot change your mind later. You can completely redesign your life from scratch at age 30 or 40 if you find that to be appropriate. It simply is a fact that as a teenager all of these questions are wide open and you get to select the initial answers for all of them from an infinite pool. That is a lot of freedom.
The average teenager often faces significant problems in making all of these choices:
Most teenagers never realize that they have total control of their lives. The questions "Who am I?" and "Who do I want to become?" never quite make it up into the average teenager’s conscious mind, so life just sort of bumbles along letting things happen randomly. These teenagers miss a great opportunity because they miss the possibility of becoming anything they want. Your range of options is wide open as a teenager.
Most teenagers do not understand the realities of the world into which they are about to enter. American society is an exciting but tough environment. It requires quite a bit of knowledge to become successful in this environment. As a teenager you are fairly naïve about the real world
Most teenagers also live in a protected dreamland created by their parents. That is probably hard (or impossible) for you to imagine, but it is definitely the case. It is easy for you to make mistakes that can affect you negatively for the rest of your life.
Most teenagers do not believe in themselves, nor do they believe that there is any way to improve their odds of success. No matter what path you choose to follow in your life, you have to be confident and believe in yourself in order to succeed. You also need to learn key facts and techniques that will improve your odds of succeeding. One of the best ways to get started is to simply ask the people around you for their thoughts and ideas, especially adults. Another is to experiment, and your time as a teenager is a great time for that sort of experimentation.
As a teenager you can explore a whole set of options to learn more about yourself and the world around you. You can pick something you really want to do well and you can go do it right now. You don’t have to amorphously think, "Acting might be fun…" Instead say, "I am going to be an actor!" and then pursue it. You can audition for acting parts. You can find some friends and do plays together. One of the great things about being a teenager is that you can pursue many things at once. You can also afford to fail, and you don’t have to worry about it if you do. Head in a direction and see what you find there.
I hope I have at least captured your attention and will provide more detail and information in the coming days...stay tuned!
My Blog Purpose...
My goal in this blog is to help Teens realize the amazing freedom they have to control their lives and destiny by assisting them in making good decisons about the future...NOW!
Great...another old person trying to give me advice, why should I listen to him. That is one of the benefits of advice. It allows you the freedom to choose any, all, or none of it to apply to your life and decision making. Advice is simply knowledge with out the pain of experience.
In the coming days I will blog what I believe are some undeniable truths about choices, decisions, and attitude that can literally allow you to define your life. I only ask that you follow along and consider what I am presenting, and choose those elements that apply to you.
If you are entering high school, you are in a very unique and powerful position. In the next four years, and only in that time frame, you have the complete POWER and AUTHORITY to literally define your life. After this short period of time, your previous decisions and actions will begin to dictate what your life will become, and your POWER over your life begins to deminish greatly. At 42, it is impossible for me to now decide that I will be a successful attorney, live in Montana, drive a corvette, and earn over 1 million dollars.
You have that POWER! I look forward to sharing my experiences and providing you with some advice that can help you Define Your Life. Subject will include:
How the World Really Works
Facts of Life that Every Successful Adult Understands and Uses Everyday
Why are there so many rules and laws to follow?
Why does the opposite sex seem to hate me?
Why are Adults so concerned about money, the price of things, taxes, etc?
and much, much more...
You can also drive the topics by your posts and feedback. Parents are also encouraged to follow and provide your insight, and engage your pre-teen or teen in similar discussions.
Great...another old person trying to give me advice, why should I listen to him. That is one of the benefits of advice. It allows you the freedom to choose any, all, or none of it to apply to your life and decision making. Advice is simply knowledge with out the pain of experience.
In the coming days I will blog what I believe are some undeniable truths about choices, decisions, and attitude that can literally allow you to define your life. I only ask that you follow along and consider what I am presenting, and choose those elements that apply to you.
If you are entering high school, you are in a very unique and powerful position. In the next four years, and only in that time frame, you have the complete POWER and AUTHORITY to literally define your life. After this short period of time, your previous decisions and actions will begin to dictate what your life will become, and your POWER over your life begins to deminish greatly. At 42, it is impossible for me to now decide that I will be a successful attorney, live in Montana, drive a corvette, and earn over 1 million dollars.
You have that POWER! I look forward to sharing my experiences and providing you with some advice that can help you Define Your Life. Subject will include:
How the World Really Works
Facts of Life that Every Successful Adult Understands and Uses Everyday
Why are there so many rules and laws to follow?
Why does the opposite sex seem to hate me?
Why are Adults so concerned about money, the price of things, taxes, etc?
and much, much more...
You can also drive the topics by your posts and feedback. Parents are also encouraged to follow and provide your insight, and engage your pre-teen or teen in similar discussions.
Subscribe to:
Comments (Atom)