Doggedness, or persevere, or keep trying, or stick with it, etc seems to have lost some of its righteousness in the times in which we live.

This came to my attention recently when in a conversation with a former teacher, along with something I had previously read; we discussed the drop out rate of high school students. Nationwide, I think it’s about 8%.

 

I had another conversation this week with a woman whose husband has owned and currently owns Taekwondo or Karate studios. Most of the students are grade school with some junior high school and older.

 

The drop out rate in these classes is very high as the kids become bored and the parents say ok, well let’s try something else.

 

Ever give your kids music lessons? Most of them are encouraged to select an instrument around 6-7^th grade by their school, the parents run and rent the clarinet, or guitar or violin and encourage their child as much as possible. Others may go out and rent a piano.

 

In most cases, the child’s enthusiasm wanes’ quickly, the parents push the student to practice and an on going battle between parent and child evolves and the kid says I don’t want to do this anymore.

 

The frustrated parents give in and the instruments are returned.

 

How about the adult who tries a new business venture, or a new job?

 

Their enthusiasm can even be contagious when they start this new occupation or hobby, or even book to read, but if they start to lose interest, or the job is too hard, they look for ways to get out of it, or quit, or drop out.

 

One of the most startling things I heard this past week about “dropping out” was of home owners buying a new bigger and better house than they currently had, and then giving their original house back to their lender.

 

Their present home is worth considerably less than the amount they owe on it.

 

Huh? I asked. How can they do that?

 

More than one person I queried told me that if you have good credit, you select your new house that in today’s market is typically bigger, cheaper and better than where you now live.   It could very well be a foreclosure or short sale.

 

However, at today’s interest rates, compared to what your present mortgage is, the monthly cost of the new house will be considerably less than what you now have.

 

So what do you do with two houses?

 

I was told that you simply give your current house, the one that’s worth much less than the amount of your comparatively high rate mortgage, back to your lender and walk away.

 

What about your subsequent credit rating I asked? Oh they said, no problem. You’ve got your new mortgage on the new home and you won’t need to borrow again.

 

So is this right?

 

To be pragmatic, no question. If the child loses interest in the Taekwondo or flute why would a parent want to continue a losing battle every day?

 

If the hobby or book is not interesting after a while, why continue to spend your time on it?  If the job is too hard, find a new one as soon as you can. The same goes for a new skill you may want to try to learn like fishing, or learning a new card game, etc.

 

However, I and most of my generation was taught that “if you don’t succeed at first try and try again.”

 

The example comes to mind of Thomas Edison who had thousands of attempts to develop the light bulb before he succeeded. So did Ben Franklyn on many of his inventions or Marconi etc.

 

Another lesson I often heard growing up was “necessity is the mother of invention.” In other words, when you really have to find a way to do something, more often than not you can figure it out.

 

In other words, “persistence pays.”

 

How about the male, of all species, who chases after the female he’s attracted to.

 

How about the goals and dreams and ambitions we all have that we aspire to.

 

Maybe it’s clever to walk away from a bad loan in this day and age, and I’m probably just old fashioned, or in any case, old, but it just seems morally wrong to me.

 

Am I wrong?

 

Am I impractical?

 

Am I not being pragmatic?

 

 

How many of us over our lives were excited to have a new car, if for nothing else, the smell of it. With leather, it’s even better.

As a matter of fact, automotive leather tanners incorporate the leather with an odor to help sell the car and leather upholstery along with it.

We all like the latest features, some that we never figure out how to use, and tell ourselves how much safer we are with all of the new additions manufacturers have added.

Then there’s the prestige factor to show our friends and relatives that we could afford to buy a new car.

S what’s all this worth?

To me not much.

The last new car I bought was five years ago. I liked the one I had before it so much that I bought the newer model and liked it even more.

I loved the new car/leather smell, the shiny bright finish and the additional gadgets that made “my driving experience” as the ads say even more enjoyable.

But what did I pay for all of this?

In my case, about $55,000 not to mention license fee’s of around $1500 based on the cars value, insurance etc. The “enjoyment” was “worth” the money for the first few months and then..

It became like every other car. It’s a convertible so the wonderful new car smell evaporated pretty soon; it got a few dings, and eventually just nice transportation.

My warranty was up after 3 years, so I quit going back to the dealer and now go instead a group of mechanics that only deal in this brand.

I always keep it up to date for all the suggested maintenance and repairs and even have it detailed once a year and washed often.

The mechanic told me that the car would good for at least another 60,000 miles (it has about 65,000 now). He advised that whatever money I put in it to keep it up will be minimal compared to the cost of buying another new one.

He even told me I was crazy to buy premium gas as the manual states. The car will run fine without it. He’s right.

My insurance costs are now much lower, and the license fee that was once around $1500 is down to about $350 plus $50 to have it inspected.

If I want to take a long trip, say a few thousand miles or so, I can rent a car for maybe $30.00/day and have a new car with no maintenance. However, I don’t take car trips like that anymore. I’d rather fly.

To be objective, I think a new car is very important to many people for a variety of reasons and good for them.

It’s just a matter of how you want to spend your income. For some companies, it’s a nice deduction. For others, it’s important that they make a good impression with a nice new car for their customers. For others, it’s an ego massage.

As the saying goes, different strokes for different folks. For me, as long as the car provides comfortable and reliable transportation with a minimum of hassle, why not keep it as long as it fulfills your functional needs – or is ego one of those needs?

 

 

38/42 + 5 year changes

 

Without one scintilla of scientific research and nothing more than just life experience, I have noted that men especially, but in many cases women as well, make major changes in their lives between the ages of 38 and 42.

Don’t ask me why, but think about your own life and those you know.

Some men I’ve known, for various reasons, initiated divorces. Others changed their careers. I’ve known some who started to cheat on their wives and others who for the first time bought themselves that neat little sports car they always wanted.

Come to think of it, my Dad married my mother when he was 42. Lucky for me he did. He never had a sports car though

Some start to work out more than ever, jog or grow a beard, or begin new major hobbies. Others move and many at this stage of their lives advance in their occupations.

In my case, I started a new Company at 39 and built the foundations for a new career.

I think in this age range most of us are pretty healthy and still young enough to be creative, enthusiastic and energetic, but why do we tend to make major changes in our lives?

I must admit, I don’t know. I can only guess that for the first time, we have a better guesstimate of what our future is going to look like.

Between 38 and 42, we tend to stop and take a look at where we’ve been so far and decide if we want to continue our lives as they’ve been or make changes to what they want to be. I think that’s what happened in my case.

The other observation I made some years ago is that no matter how we plan, or calculate, at times, beyond our control, situations occur that considerably change our lives within five years (or less) in the future.

Think back to where our lives were five years ago. In my life the changes were monumental and I had no idea five years ago what it would be like today.

By the same token, it can be a little scary. How different will our lives be five years from now?

Think back over previous five-year periods in your life and look at the changes.

Life is a never-ending “challenge” and if you really want to live it to the fullest, it’s never boring.

 

 

 

Michael Fleisher, president of Bogen Communications in New Jersey wrote a column in today’s Wall Street Journal.

I don’t know if I’ve ever copied a story in its entirety from the paper before, but I thought this was so illuminating about the current malaise of the job market, that anyone in business could identify with it.

I recommend you read it to find out why one company finds it hard to not only afford its current employee’s but why it hesitates to add more.

You likely have the same situation in your company.

With unemployment just under 10% and companies sitting on their cash, you would think that sooner or later job growth would take off. I think it's going to be later—much later. Here's why.

 

“Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings.

 

She's been with us for over 15 years. She's a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

 

Employing Sally costs plenty too. My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay.

 

Health insurance is a big, added cost: While Sally pays nearly $2,400 for coverage; my company pays the rest—$9,561 for employee/spouse medical and dental. We also provide company-paid life and other insurance premiums amounting to $153. Altogether, company-paid benefits add $9,714 to the cost of employing Sally.

 

Then the federal and state governments want a little something extra. They take $56 for federal unemployment coverage, $149 for disability insurance, $300 for workers' comp and $505 for state unemployment insurance. Finally, the feds make me pay $856 for Sally's Medicare and $3,661 for her Social Security.

 

When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose 33% surtax on Sally's job each year.

 

Because my company has been conscripted by the government and forced to serve as a tax collector, we have lost control of a big chunk of our cost structure. Tax increases, whether cloaked as changes in unemployment or disability insurance, Medicare increases or in any other form can dramatically alter our financial situation.

 

With government spending and deficits growing as fast as they have been, you know that more tax increases are coming—for my company, and even for Sally too.

Companies have also been pressed into serving as providers of health insurance. In a saner world, health insurance would be something that individuals buy for themselves and their families, just as they do with auto insurance. Now, adding to the insanity, there is ObamaCare.

 

Every year, we negotiate a renewal to our health coverage. This year, our provider demanded a 28% increase in premiums—for a lesser plan. This is in part a tax increase that the federal government has co-opted insurance providers to collect. We had never faced an increase anywhere near this large; in each of the last two years, the increase was under 10%.

 

To offset tax increases and steepening rises in health-insurance premiums, my company needs sustainably higher profits and sales—something unlikely in this "summer of recovery." We can't pass the additional costs onto our customers, because the market is too tight and we'd lose sales. Only governments can raise prices repeatedly and pretend there will be no consequences.

 

And even if the economic outlook were more encouraging, increasing revenues is always uncertain and expensive. As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment.

 

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price.”