1940s

How to find motivation to balance your budget

Dave Farquhar Saving money , , , , , , , , ,

This week I read a story on Get Rich Slowly about a couple who refuses to budget. The conversation ended when the person who needed to budget bragged about getting five shrubs on sale for $10 each. She didn’t need them, but the deal was too good to pass up.Consumerism is an easy trap to fall into because of easy credit, and the messages are all around us. Most people who know me probably categorize me as an extreme cheapskate. Certainly there are lots of things I could be doing that I don’t, but even by doing a few little things you can improve your financial situation immensely.

Watch less TV. I think this is a really big one, because TV is the primary source of marketing messages. It’s not just the commercials either. The TV shows give lots of messages about how you’re supposed to live. It’s not a realistic picture.

At one point in my life I was able to go a year without watching TV, just watching the World Series each year. I watch more now. I try to catch This Old House on Sunday evenings and sometimes I’ll watch a show with my wife, so I probably watch 3-4 hours a week now. But that’s a lot less than average.

My advice to someone who wants to watch more TV than I do would be to watch older movies (1940s-1960s), as that would make it harder to compare your life to someone else’s. Plus, there’s a lot less product placement and other marketing shenanigans going on, and if you watch it on video, no commercials.

Have realistic expectations. A lot of 20-somethings seem to think they have to have furniture as nice as their parents. That’s unrealistic and sometimes impractical. The previous generation didn’t always have what they have now. Walk into the home of a 50-something, and some of the furniture will be new, but some of it will be 10-15 years old, possibly more. The furnishings were bought over the course of many years. Plus, nicer things are impractical when you have kids running around. There will be spills and stains and dirt. Kids need to be taught to respect things, but what’s the point of ruining a $1,000 sofa to teach the lesson? It’s better to put something older and cheaper in harm’s way instead–much easier on the credit card and on your sanity.

Budget. A budget isn’t some mystical thing. It’s a simple list of your money as it comes and goes. It can be as simple as a spreadsheet. In one column, list all your sources of income–your paycheck, plus anything you make on the side. Add up that total.

In another column, list your monthly expenses. That’s everything–your car payment, rent or mortgage, credit card bills, utility bills, gasoline, food, and entertainment. You may have to save your receipts for a month to do this realistically. Add up that total. Hopefully it’s a smaller number than the first total.

I first did this in college when I was treasurer for my fraternity. We were in serious financial trouble but nobody knew why. I grabbed the checkbook, did the simple analysis I described above, and figured out we were spending more than $400 per member every month. We were only charging $380 a month for people to live there.

When we couldn’t raise rates, I started cancelling things. I cancelled the Super Bowl Party. I cancelled cable TV in the lounge. If it wasn’t a basic necessity of life, it went. It made me unpopular and it didn’t balance the budget, but it cut the shortfall.

I’m guessing most of the people who voted against me raising rates are having more trouble paying their bills today than they need to.

The expenses involved in a personal budget are different than for an organization, but the principles are identical. You still need to have more coming in every month than comes out, and if you can’t figure out how to make more, the only way to have more money is to spend less.

Reward yourself. Practically. A few years ago my budget was tight and I’d taken on an expensive hobby. Then I realized what I spent on food every day. It started with $1 for a cup of coffee and a doughnut. Lunch was $5 at the cafeteria. And usually I spent another dollar or two in the vending machine. I let my ego tell me it wasn’t worth my time to pack a lunch.

Then I did this math equation: (365-52-52-10-10)*7 and came up with $1,687. I was spending $1,687 a year on (mostly) bad food because I thought I was too important to pack my own lunch.

I was also making about $15,000 a year less than I make now. Dice.com tells me I’m slightly underpaid now, let alone then. Who was I kidding? That $1,687 was a luxury I couldn’t afford.

So I went to the store, bought a Thermos and a big can of coffee, bought some instant oatmeal and some breakfast bars and granola bars, and started packing fruit and sandwiches. What was left became my hobby budget.

I couldn’t motivate myself to cut that expense just to have more money, but being able to afford something I otherwise couldn’t was enough motivation for me. Eventually I shrunk the hobby budget and started using that money to pay down debt.

But had my situation been different I don’t think it would have been a bad thing, necessarily, to keep using that to fund a hobby. It’s easy to get discouraged when it seems like everyone else is passing you by, even if they’re passing you by on borrowed money.

Look at opportunity cost. Opportunity cost is about the only thing I remember from college economics. The theory goes like this: The cost of a new car isn’t $20,000. It’s what else I could have done with that money. So the cost of a new car is a plasma TV ($5,000), a high-def DVD player ($500), a nice computer ($1,500), a new high-efficiency furnace ($4,000), a nice vacation ($3,000), all three current generation video game systems (roughly $1,000), a new living room set ($2,000), and you’d still have $3,000 left to replace two or three appliances with high-end models, or all your major appliances with new low-to-mid-range models.

Would it be worth driving an older car for a few more years to be able to afford to go on a home-improvement binge like that?

Or here’s the way I prefer to look at it. I could invest that money conservatively, using a no-load index fund that just does exactly what the Dow Jones Industrial Average does. Historically, money invested in the DJIA doubles every seven years. Some seven-year periods are better than others, of course. If I dump $20,000 into that kind of a fund, it will be worth $320,000 in 28 years.

The sticker price on the Honda Civic sitting in my driveway was around $15,000, but that’s not what it cost me. It didn’t cost $16,500 either (I paid some interest on it because I didn’t have the cash to buy it outright immediately). It cost $264,000.

I know some people look down on me for driving what’s now a five-year-old car, but I can build myself a very nice nest egg just by keeping my cars two or three times as long as everyone else does. Will they still be looking down on me if I retire at 65 and they have to work 10 more years because they still have debt to pay off?

If the cost of a secure future is driving a car typical of what 16-year-olds drive, I’ll pay that price. It’s a bargain.

Don’t pay interest. If you have a choice between financing something and waiting a while and paying cash, wait and pay cash. Paying interest is like paying rent. It’s paying money off and having nothing to show for it in the end.

I do use interest-free periods to buy things because that gives me a little more time to get the money together. I financed a furnace earlier this year because they offered 6 months same as cash. I probably could have paid cash on the spot but it would have been less comfortable. Being able to spread my payments out over six months allows me to pay more on the mortgage, which does charge interest.

And here\’s something for you…

Dave Farquhar General ,

Last night my wife and I watched Dead Men Don’t Wear Plaid, a Steve Martin movie from 1982. It’s a parody of film noir movies from the 1940s and 1950s.Some reviews criticize the plot as being too simple or too unbelievable or too formulaic. I can see the point, but this is a parody. Off the top of my head, I can’t think of a single parody that had a plot that would have made Shakespeare jealous.

As entertainment, I think this movie is a home run. Even though the movie is about a murder investigation in which Martin’s character gets beat up a lot, it’s not a violent movie. There’s some double entendre in it, but not as much as you would see in a typical sitcom on network TV today. And I don’t think there’s any foul language in it either.

But more importantly, it’s funny, which is good, because that’s what it set out to be. I don’t want to give away the jokes, but the scene where Martin shows up with a puppy for a peace offering had me laughing longer and harder than I’ve laughed in years. And you’ll probably be able to watch the scene two or three times and notice something you didn’t notice the first time.

And if you’re a fan of old movies, you can have fun watching the old clips interspersed within and play guess-the-actor and guess-the-film with them.

If it sounds promising to you, buy it (used copies are pretty inexpensive online–around $5 plus shipping). Or the next time you’re in the mood for a movie and none of the new releases look good, give this oldie a spin.

But don’t blame me if you end up buying it.

Cars (as in vehicles) for train layouts

Dave Farquhar Toy trains , , , , , , , , , , , , , , , , ,

I was at Kmart today, and as I usually do, I wandered down the toy aisle on the off chance I might find some cars that might work on my train layout.

I did a lot better than I usually do–Jada and Maisto came through for me.I won’t talk about HO and N scale trains because for those scales, you can walk in to any hobby shop in the country and find pretty much anything you want. Us Lionel and American Flyer fans have it a lot tougher.

Lionel O scale is roughly 1:48. You won’t find 1:48 vehicles anywhere these days, but you can find 1:43 and 1:50. Some people fret that 1:43 is way too big, but sometimes you can hold up one maker’s 1:43 vehicle next to a similar 1:50 vehicle from another make and find they’re just about the same size. Maisto and New Ray are two makes of cars that size.

Lionel and Marx O27 is 1:64, more or less. Maisto, Jada, and Ertl make lots of 1:64 cars. Some Hot Wheels and Matchbox cars are close, but most are closer to 1:72, which is a bit small.

American Flyer O gauge trains made after 1937 are 1:64 scale, and all American Flyer S gauge trains are 1:64.

Since I run O27, I have lots of vehicles to choose from, but the problem is finding something era-appropriate. Contemporary vehicles are no problem to find, but if you want something old, it’s hard to find much other than a ’57 Chevy. Well, you can find a handful of late ’50s cars of various makes, but it tends to lean towards the late ’50s, and from looking at the stuff in the diecast aisle, you would think Ford and GM were the only two companies making cars in the ’50s. Want a Studebaker or a Hudson or (gasp) a Dodge? Good luck.

Of course I had to make things more difficult. I like really old trains, so a ’57 Chevy isn’t exactly going to cut it. I need 1930s and 1940s cars.

Maisto just happens to be offering a 1:64 ’36 Ford Coupe as part of its G Ridez series. It has homey-ized rims and thin tires, but other than that, it looks pretty stock. Hot Wheels has offered a ’36 Ford since I was a little kid, but it was always a hotrod.

Maisto also offers a ’37 Ford, but it has a prominently chopped roof

And Jada is offering a 1:64 ’39 Chevy Master Deluxe as part of its Dub City Old Skool line. Like the Maisto, it has thin tires and weird rims, but aside from that, it looks stock, and it’s black. This is a very nice car to have because it’s a late 1930s station wagon–a family car. It looks just like the cars you see families using in the movies set in the ’30s and ’40s. I hope I can find a few more of these because it’s the kind of ordinary car that will look natural even if I had several on the layout.

So if your toy train preferences lean towards American Flyer S gauge or Lionel or Marx O27, a trip down the toy aisle at your local Kmart or Target would probably be a good idea.

One thing I’ve learned is that I have to be patient. Usable cars are out there, but there may only be a handful of them issued every year–including anything Mattel releases under the Hot Wheels or Matchbox brands, undersize or not. I take what I can get. But improving the layout a little bit at a time over the course of years is part of the hobby’s appeal. At least it’s supposed to be.

The overworked American

Dave Farquhar Society , , , ,

This is old, but still true, and Labor Day is a great day to explore the topic of The Overworked American. The trend has not reversed since it was written.

Basically, what Juliet B. Schor says is that productivity has soared since the 1940s, and when productivity soars, you can choose to do one of two things: work more, or work less. Europe by and large has chosen to work less. The United States hasn’t.I know ever since I saw a John Cummuta seminar back in November 2004, I’ve been harping on living cheap and paying off debt as quickly as possible. The goal isn’t so much to pile up tons and tons of money. That’s just a side-effect. That’s not the goal. There’s a different goal, and it’s actually a lot shorter-term: The goal is to buy freedom.

When I was growing up, Dad almost always carried a beeper. And invariably, when we would go out (on those rare occasions when we did get to go out), that beeper would go off, and Dad would have to find a phone, and more often than not, then Dad had to go away.

Then I grew up and I got a beeper of my own. Back in the ’70s, you had to be something really important like a doctor to have a beeper. Today all you have to know is what ctrl-alt-delete means. I guess it was the first time my pager went off in the middle of a date that I knew something was horribly wrong, but I didn’t know what to do about it.

It took seven years, but I finally got the answer.

Cummuta’s tapes are pretty expensive, but you can go to the library and get a book by Dave Ramsey or David Bach and get the same benefit because all of those guys pretty much say the same thing.

What those guys can’t give you is motivation. My wife and I have amassed a library of financial books. In a lot of cases my wife had a conversation with the original owners of the books. They all said the books had good ideas, but it was so hard to do.

Which brings me back to The Overworked American. What Schor doesn’t say in that excerpt is that you do have a choice. When your boss comes to you and says you’re going to work Labor Day, and not only that, you’re also going to work on Saturday and Sunday of that weekend too, and, oh yeah, you’ll probably have to stay late on Friday, you’d better believe you have a choice.

Well, assuming you don’t have to write a check to the bank for $1,000 every month for that roof over your head, and another check for $400 or $500 every month for those four wheels that get you to work, and another one for the four wheels that get your spouse to work.

When $24,000 of your annual income goes strictly towards transportation and shelter, you will return the call when the beeper goes off. You’ll answer the cellular phone (which you pay for) on the first ring if that’s what your boss wants. You’ll work Labor Day weekend and you’ll like it because your boss has you exactly where he wants you.

That’s why I’ve been harping so hard on living within your means. I don’t drive a Honda Civic because it’s what all the cool kids want to drive. I drive a Honda Civic because it’s a reliable car that rarely has to go into the shop, because it gets really good gas mileage, and because I was able to pay it off in two years.

Perhaps more importantly though, I plan to still be driving that Honda Civic on the day I write that final check that pays off the mortgage.

Unless something were to happen to that Honda Civic in the meantime, that is. If that happened, I’d probably go buy a 2000 or a 2001 model and put whatever money was left over towards the house.

You don’t have to get a new car every three years, or even every five years. We’ve been conditioned to trade in our cars every few years, but if we do that, then someone else gets to control our lives. We’re slaves to consumerism! Slaves!

And when you can’t spend any quality time with your spouse because you’re always at work (or working from home), and you don’t have the time or energy to pull your own weight at home, and there’s all the stress that puts on your marriage, could that have anything to do with why divorce rates are as high as they are?

But if you can drive home every night in your car that you own outright to your house that you own outright and can sit down on your couch that you own outright, guess what? When your boss tells you that you have to work Labor Day, you can say no. Why? Because if your only monthly expenses are medicine and food, if your boss says the f-word (the five-letter one), all that matters is whether the White Castle down the street is hiring because that job will more than cover your expenses while you try to find another regular full-time job.

And that, my friends, is why I’m typing these words on an old 700 MHz computer, why I didn’t go out for lunch this afternoon, and why I haven’t traded in my four-year-old Honda Civic. The math tells me I can have this house paid off in two and a half years. I don’t know if that means I’ll find a way to do it in a year and a half, or if it means it’ll take closer to four. But I look at it like high school–something with a beginning and a very definite end. In the meantime, there’ll be some good things that happen and some bad things. But there will come a day when it will be over.

And on that day, I’ll get a taste of the real world.

I don’t know about anyone else, but I’m really looking forward to that.

American Model Toys and Kusan trains

Dave Farquhar Toy trains , , , , , , , , , , ,
American Model Toys and Kusan trains

While almost everyone knows American Flyer and Lionel, and a lot of people have heard of Marx, there was a fourth maker of toy trains in the late 1940s and early 1950s that was much smaller, although very innovative, and today is nearly forgotten: Auburn, Indiana-based American Model Toys.

Its legacy, however, ties into virtually every major producer of O gauge trains in business today.

Read more

Dave gets a movie rental card

Dave Farquhar Video , , , , , , , , ,

Faced with producing a documentary film, and faced with the increasing prospect of doing it on my own without help from people who know what they’re doing, I went on an excursion last night. Well, first I called up a friend to see if she was doing anything. She wasn’t home, so I decided to do something useful with my Saturday night: research.
I drove to Hollywood Video, filled out a membership form and handed over my driver’s license and a credit card. I came home with two installments of Ken Burns’ acclaimed Baseball series. I wanted to see how Burns did documentaries, particularly how he handled stills and mixed stills with old movies. So I grabbed the 1910s-1920s installment and the 1930s-1940s installment. Then I drove over to Wal-Mart and picked up a couple of frozen pizzas. Then I came home to watch and learn.

Burns usually shoots still pictures the way a cameraman would shoot a scene, either shooting the less-important part of the scene and then panning over to the important part, or shooting a panoramic view of the whole picture, then zooming in on the important subject. When faced with a good, well-composed and well-cropped closeup, he just lets it sit alone. On television, there’s no such thing as a still–the image will jump a little–so you can get away with that more than you might think. He added a little more life with sound effects and voiceovers. For example, when showing a picture of a sportswriter, he added a voiceover and the quiet sound of a manual typewriter. That’s an interesting trick I’ll have to remember–when you can’t engage the eyes with much, engage one of the other senses.

And what about transitions, the whiz-bang stuff that Premiere gives you so much of? If Burns ever used a transition, it was very subtle. Where I looked for transitions, I found only hard scene changes.

But for all his critical acclaim, I was disappointed with the 1910s-1920s installment. Babe Ruth Babe Ruth Babe Ruth Babe Ruth. I had to check the tape to make sure this was Baseball, and not a biography of Babe Ruth. Yes, Babe Ruth was (unfortunately) the most important player of that era. But Babe Ruth wasn’t baseball. He was a fat drunk who hit a lot of home runs mostly because he had a ballpark with a nice short porch in right field for left-handed hitters to hit into. And he mostly played right field, so he didn’t have to run around a lot. Yes, in his early days Ruth was a tremendous athelete. But he didn’t take care of himself, and had he played anywhere else, he would have been far less remarkable.

What did Ken Burns have to say about the 1929 World Series? Author Studs Terkel came on and talked about how his buddy had tickets to Game 1 of the series and wanted him to go. He didn’t go. Lefty Grove was expected to pitch. Instead, Howard Ehmke (who? Exactly.) pitched instead. There’s a story behind that, but heaven forbid Ken Burns spend 30 seconds telling that story when he can use that 30 seconds to show a package of Babe Ruth-brand underwear instead.

Screw it. I’ll tell the story. About mid-season, A’s owner/manager Connie Mack went to Howard Ehmke and told him he was letting him go. Ehmke was a veteran pitcher, but he was well past his prime, and Mack rarely pitched him–six of the other pitchers on his staff went on to win 11 or more games that year. Mack was a notorious cheapskate and was known to sometimes only take two pitchers with him on road trips, so far be it from him to keep Ehmke around and on the payroll when he didn’t need him. At that point, the A’s were World Series bound, with or without Ehmke, and the whole league knew it. (No wonder Burns didn’t talk much about the 1929 season–the only noteworthy thing Babe Ruth did that year was remarry.) But Howard Ehmke had never pitched in a World Series, so he pleaded with Mack to let him stick around just long enough to pitch in a World Series game. Now Connie Mack may have been a cheapskate, but he wasn’t a soulless bastard like so many baseball owners of that day and later days. He had compassion on his veteran pitcher and said OK. Now I don’t remember whose idea it was, but they even talked about him starting one of the games. Mack asked him which game he’d like to start. Figuring he had nothing to lose, Ehmke answered, “The first one, sir.”

Absurdity. The best pitcher in the game that year (and for most years to come) was one Robert Moses “Lefty” Grove. You play the first game to win, so you go find your best pitcher to go win it for you. So the whole world expected Lefty Grove would pitch Game 1. So the Cubs, expecting left-handed fireballer Grove, loaded up their lineup with right-handed power hitters. At the last possible moment, Mack announced his starting pitcher would be soft-throwing right-hander Howard Ehmke. Ehmke pitched the whole game. He won, too, striking out 13–a series record.

The 1929 World Series was one of the most dramatic series ever, with the A’s staging a gutsy come-from-behind victory in Game 4, scoring 10 runs in the 7th inning to overcome an 8-0 deficit. Lefty Grove came in to pitch the 8th and 9th and preserve the victory, notching his second save of the series.

But since Babe Ruth sat at home while all this was going on, I guess nobody wants to know about it. They don’t want to know about any of the colorful guys on either team either. Jimmie Foxx was the greatest right-handed home run hitter in the game before Mark McGwire came along. A converted catcher, Foxx would play seven positions at some point in his career. Whereas Ruth began his career as a pitcher for the Red Sox, Foxx wrapped his up as a pitcher for the Philadelphia Phillies. Like Ruth, he was always smiling. And he was one of the nicest guys to ever play the game.

The rest of the Philadelphia clubhouse wasn’t as nice as Foxx. Left fielder Al Simmons was a vicious hitter–arguably there were two things on that team meaner than Simmons’ bat, and those were Foxx’s bat and Simmons’ temper. It was a good thing the A’s didn’t lose much in those days, because after every loss, Simmons, hotheaded catcher Mickey Cochrane, and hotheaded pitcher Lefty Grove would redecorate the locker room. Connie Mack knew better than to go near the place until after they’d left.

As for Hack Wilson, the Cubs’ star center fielder, well, I’ve heard stories about him. It would have been nice to hear some new ones.

Hopefully we’ll find out a little bit about all these guys in the 1930s-40s installment. After the Yankee Dynasty of the late 1920s ended, the A’s Dynasty replaced it, and Ruth was retired by 1935–his last great season was 1932–so there isn’t much excuse to talk about him.

So while I was able to learn a fair bit about how a movie can come together and look good from discrete elements that are varied and sometimes damaged, I’m less impressed with Burns’ storytelling. To hear Burns tell it, you’d think the only teams that played baseball in that era were the Yankees, Red Sox, Yankees, A’s, Yankees, New York Giants, Yankees, the Chicago Cubs, Yankees, the St. Louis Cardinals, Yankees, and the Negro League teams, who rightly or wrongly got more screen time than the non-Yankees MLB teams.