Unpleasant firsts

[bigshovel]

This oil debate has come up here at tbn in all of the forums in some form it seems. The common thread of most all of these debates is related to those who are in way over their heads and drowning in debt. I refuse to complain about the cost of fuel because it just is a fact of life now. Is there better things for me to spend my money on, sure there is. I see the debt example brought up on this site daily, i.e what dealer is offering 0 percent FINANCING and so on. If you can't pay cash for it you flat out can't afford it. With monthly debt payments inflationary costs will affect your day to day monetary transactions. Oil jumps a dime and the bank does not care you do not have an extra dime they want their payment and now your short a dime. If nothing is financed you have alot more control as to what becomes priority in your life. Get smart with money and it will work better for you.

Brad

 

[jcmseven]

Brad,

I cannot agree with you more. It is true that many people in our society live so close to the edge that they are greatly affected by small variations in gas price. Yes, there are those truly less fortunate who by reason beyond their control have difficult times related to current issues with gas and other "spin off" expense. As we both know, these people are in the minority of those swimming in debt. I accepted a position with a large tertiary care hospital last year that allowed me to pursue my medical interests and spend more time with my family, two important and oft neglected things for a physician. I also make quite a bit more money than I did before, a nice bonus but not the reason I changed jobs. Interestingly when I was in private practice I was responsible for reviewing all payroll checks before they were sent to our 53 (at the time) employees. We had an office manager but a physician partner had to sign off on the payroll (that was me). In almost EVERY case, I had at least 10 employees asking me to review their checks early so they could deposit them to cover, primarily, credit card expense. One employee, who made around $10/hour, admitted to me she had over $40,000 in credit card debt AND had bad credit, thusly eliminating her good chance for a better rate. She was single and had two small children, which her parents, who also apparently had a poor financial state, were helping to raise. What type future does this leave for HER lineage?? My dad always has echoed that if someone took all the money away from each of us, and monitored our progress for 10 years, the ones who are comfortable now would be again and the ones who are broke now would be again also. I think he has a point. As you aptly stated gas is but one aspect of a much larger problem which in my mind is unfixable, given our penchant to overspend and undersave (I read 30% of Americans have less than $500.00 in savings--can this be true??). Sure, I have used credit myself for convenience, but pay things off timely and use it only as a last resort. This is something ingrained to me by my dad, and I wish more of our population had that type guidance. To many have the guidance like that I noted above.

John M

 

[bigshovel]

John M,

I'm in a similar position as you, self employed and in the past have worked as many as three jobs to sustain a paid for lifestyle. I mandate a debt to income inquiry on all of my potential hires. I without a doubt have some of the BEST employees on the planet due to their finances are in line at home and they don't bring the finance stress to my building or create a bad culture with their co workers. With that said, It is not beneath me to work after hours for some of my self employed friends if asked. One of my employees saw me on a weekend working for a friend of mine and figured if the boss does it he can to. He showed up for work one monday excited as a kid at christmas in a brand new cadillac escalade, hopped out and handed me the bill of sale. As I read the bottom line on the bill of sale it said paid CASH!!!! He looked at me with a grin and said, I have been listening and watching, I now know why you pay with cash and don't finance, IT FEELS GREAT and it's mine not some bank's. As for those on the minimum wage front and hovering close, education and some equitable skill sets will go a long way. In high school the local road construction companies were hiring all of us kids at the time they could. Trained us on equipment and form carpentry, then paid us federal davis-bacon wages on job sites. I don't know why some people stay entry level, that is not what minimum wage was designed for.

 

[john_bud]

Big, jcm,

I agree with both of you 100%.
We have;
Cars, truck, tractors, a house and some acres. Paid in full.

It's not hard to do, either. While some of my buddies were buying new trucks, boats, etc every year or so, trading up houses (bigger debt each time too and needing new furnishings), we were living UNDER our means, paying down the house (30 year note paid off in 13), paying down vehicles etc. Also, not having the habit of blowing a 1/2 days pay every week in the tavern on booze and smokes helps a lot!

jb

 

[Kendrick]

your atleast lucky enough to be in that situation through timing. im young enough that i was screwed from the begenning and am just now getting out from under where my parents left me. I have learned about debt and will never have personal credit cards. those who dont own wont get ahead of the game. I feal sorry for the kids of the worker with 40k debt. I know just how hard it will be. Considering where she is, they probably have not been taught how to live self sufficently or any skills needed to keep from being in debt.

 

[EddieWalker]

Whenever I hear about people losing their homes, or massive personal debt, I think of a guy that I used to work with. Around the mid 90's he bought a 2,500 sq ft home on 3 acres in the Hayward hills of California for $250,000. It was a fixer upper, but still a steal of a price.

He cleaned up the house, new paint and carpets, but nothing major. The value of the house started to increase quite a bit. Sometimes as much as $100,000 in a single year. He would refinance his loan one year and take out a second the next year. He said that a home was never supposed to be paid for anyway and that he'd be crazy not to take advantage of the equity that he had into it. He and his wife spent it on trips and partying. New computers, tv's and gifts. They really liked to show off and even splurged to pay for strangers on a helicopter tour in hawaii.

When the cash ran out, the struggled to survive. Sometimes they had to borrow money just to buy gasoline to get to work. His mom would have to help out with the mortgage payment and when things broke in the house, they were left broken.

This cycle went of for awhile until the money they took out was used to cover the personal loans they had and help with the mortgage payment. Somehow they were still able to refinace the house when the payment was more then they could make from their jobs!!!

Their million dollar home is now worth half that, but they owe half a million more then what it might sell for. Some of us sold out houses at or near the peak. I did and moved to Texas. He never had that option and I often wonder if he still has the house and who's making the payments.

To add to that, his credit card collecton was legandary. They were both famous for getting new cards to pay for the old cards, or go on short trips. A cruise or long weekend at Lake Tahoe, or hunting trip to Utah. Lots of drinking and showing off that he would tell us about, and we'd just wonder at how he made the payments.

He did start a beef jerky business that did real well. He was a natural salesman and had people coming up to him buying every thing he had. It was good beef jerky too!!! He paid for it from his credit card and then made minimum payments on the card. Another indication of big spending and no common sense. He got to the point that he was trying to borrow cash from his family and then co-workers to get more beef jerky since his credit cards were maxed out. He couldn't get the cash and wasn't able to get anymore beef jerky to sell.

When I left, he had his horses taken away from him, though I'm not sure of the real reason. He said it was too much money to feed them, but his wife had told somebody that he bought them on a payment deal and after making payments for a few years, quit because he didn't have any more cash.

People like him are big influences in my life. I never want to be in that sort of situation and have struggled, sacrificed and waited for the things I want so that I can afford them. I'm debt free right now except for a small credit card debt that I used recently and will pay off shortlly. I'm looking at buying a new cargo van, but don't want to go into debt to buy it, so I'll hold off for awhile longer. Not sure about what I want exactly, so there's no rush anyway.

I bought gas for my truck Saturday morning at $3.79 a gallon and when we left for a wedding a few hours later, it had gone up to $3.89!!!!! It hurts, but so far, we're just paying it and going on with our normal lives.

Eddie

 

[hazmat]

A brief synopsis of an ad running on the local country radio station (my emphasis)

John-
"Bob are you taking the kids to the lake this weekend?"

Bob
"No - I can't afford the gas!"

John-
"You should buy a pool from Namco! I did"

Announcer
"Why spend money on high gas prices when you can vacation in your own back yard?

Let's do the math - figure the lake is 100 miles round trip at 20MPG that is 5 gallons = $20 which is only $10 more than if gas were $2 a gallon. So instead of paying $10 extra (or $200 if he goes 20 times) to visit the lake, he is going to save money by paying thousands for a pool.

The reason this ad will actually work is because Namco is offering financing on the pool and some people really aren't all that smart.

 

[Bird]

Folks, let's not forget that politics is a prohibited topic on Tractorbynet.

 

[MikeD74T]

Exxon and the other "oil" companies are all publicly traded companies. You and I are free to buy stock in them like any other company. If they make a proffit, all of us who own that stock make a proffit. If they lose money, then so does everyone who owns that stock. The people who run the company are there for one reason, to make a profit. Same with any other company. What's really important is that most people that are retired have their pensions vested in a variety of companies, including the oil companies. If the oil companies were to stop making a proffit, then the funds available for the pensions would decrease. To suggest that any company makes too much money and should be regulated in what they can earn is to suggest total control of all business. A practice that was tried and failed in Russia.

The reason that most people blame the oil companies for the price of oil and complain about the profits they make is called misdirection. The real problem is in the way the country is being run and how we are having to import fuel because we cannot build any refineries. More people, more need for fuel and the same number of refineries. There is no shortage of oil, in fact, the known oil reserves are increasing faster then the oil is being used. But for some reason, we've decided to block access to getting it.

Do you really think it's the oil companies fault that they cannot drill for oil where they know it exists? Do you really think it's the oil companies fault that they cannot refine crude oil into fuel so they can sell it and make even more profit? Do you really think that they are raising the price of oil so that we will spend more money at the pump, but buy less fuel?

There are some very smart people who work for and run the oil companies. They are regulated and controled by some very corrupt and incompentent people in Washington DC.
Eddie

Eddie, Please don't be insulted by me saying that your belief may be clouded by your youth.

In the days of rural electrification government regulated the price of electricity completely and power became availible to most of America. Although limited, profit was guaranteed. Stockholders were semi- to wealthy Americans that wanted steady growth both in their income AND the American way of life. For each individual there was one power company & one price. Power companies prided themselves in the quality of their product & service.
Show me where deregulation has lowered electricity prices or increased reliability or service. Show me where stockholders have not been robbed by corrupt management.

There used to be one phone company per customer. They provided phone service at a fixed cost also with a guaranteed profit. Phones were repaired for free. Show me a person today that isn't into subscription poverty for the cost of instant portable communication devices that promote the equivilent of drunk driving. Show me a phone bill where the price of "availibility" isn't higher than the cost of actual usage.

Airlines used to provide comfort, food, & reliable transportation. Now we're subject to instant cancellation, frequent overbooking, & a complete lack of concern for comfort.

Not that many years ago only the Mafia could get 20% interest. Now mortgage companies lure buyers into single digit loans only to raise rates for the sole purpose of foreclosing when there's enough equity to call it profit. Then they blame the consumer for overextending themselves.

There's a lot of space between a free market and Communism, but the extremes of either is no place to be. Today's market & profit motives aren't based on what the consumer will pay but limited only by what the consumer will not or cannot any longer pay. There's room for regulation in a free market where it benefits the majority. None of the above industries had trouble selling their stock when they were regulated & they weren't going bankrupt daily.

I agree that there are very smart people working for the oil companies but also believe they are the very same people that are the corrupt regulators in Washington. MikeD74T

 

[mjarrels]

Of all the people... Look at Ed McMan... At 85 years old, can't work anymore and is losing his home. Must have made some very bad decisions during his life. I believe he is also a retired Air Force Reserve General! What kind of leader is this?

mark

 

[EddieWalker]

Mike,

I'm never insulted by those who disagree with me and explain why they feel I'm wrong. It's why I'm here and how I learn. I agree that my beliefs may not be correct, but until I learn differently, they are what I've come to believe. I've changed political parties several times and have no problem doing so again. Unfortunately, I'm only 42 years old, so that's something I can't change right away, but I'm working on it!!!!

I don't think our way of life is suffering and I'd go so far that even with the increase of what we are paying for fuel, our way of life far exceeds those of our parents and grand parents. We can all become wealthy if we want to and work towards it. Those who just want it, but are not willng to sacrafice and work towards it will never achive it, but I belive that in time, I'll reach a level of wealth that will allow me to retire and live a comfortable life. This is because of my ability to buy and sell what I want, including shares of oil company stocks as well as other comodities.

As for being robbed by corupt management, that's true for every company. It can happen no matter where you work, or who you work for. We saw that in the late 90's when it came out that the big accounting firms were allowing corporations to report anything they wanted for income, which inflated there stock value for instant profits. Same thing happened with the Dot Coms. After a few years, it fell apart and the George Bush had to fix it. Janet Reno should be in jail for her incompetence, but that's another thread.

My point is that those employees knew what was going on, but until it became public and too late to get their money out of their stocks, they let it continue. Of the supposed millions they lost in pensions, it was all based on inflated stock values that should never have been at those levels anyway. The news played it up like they had lost everything, but it was all on paper and they were buying into it like a pyramid scheme. Those of us who were buying stocks like that in the 90's know how crazy it was. We should also be honest enough to admit that we knew none of those companies were worth anything and that it was a gamble that paid off for some, while others got too greedy and lost allot by staying in too long. Bill Clinton came out looking good for awhile because of the massive windfall the government received by the capital gains taxes, but when that went away, he was left with a recession. Again, I blame Janet Reno for not inforcing the laws and allowing the big accouting firms like Arthur Anderson to falsify incomes for their clients.

I remember having to rent the phone in our home while growing up. I remember it not working all the time and I remember having to pay extra for a second and third phone. If they were repaired for free, that was a local condition in your area, because that's what my dad did for a living. Pacific Bell made allot of money being the only business in town, both before and after the breakup of AT&T. Now there are dozens of phone companies to chose from and phone service is probably one of the most reliable things we have available to us.

I agree that government is taxing us too much on phone service and especially cell phone service. It's not something you have to have, and I would just as soon not have mine. But it's business that has made it possible for us to have cell phones due to customer demand. Government just makes it harder and takes it cut of the profits.

The airlines are their own worse enemey. Some are making huge proffits, so we know it's not the industry, but just a few dinasours that have run themselves into the ground. I fly on the cheapest ticket I can find and expect to be uncomfortable. If I wanted comfort, I'd expect to pay more for that. It's available, I just chose to spend as little as possible to get where I want to be.

The same is true with home loans or any other loan. Nobody has to buy a house or take out a 20% loan. They choose to do so because they don't want to save up the 20 percent down payment and get a lower interest rate. Blaming a company for making it available removes all responsibility from the person who actualy takes out the loan and signs the papers. People get into finacial trouble because of the decisions they make, not because they were forced to make spend more then they can afford. Even when they take out those high interest loans, they continue to feed their destruction with credit card debt until they owe more per month then they earn. How many people are losing a house that doesn't have several credit cards that they've maxed out and a room full of high end electronics? I know that we don't have a flat screen TV in our home, and won't until our monsterous, ten year old, big screen stops working.

Nobody wants to go back to the "good ole days" except in very isolated memories of certain things they like. We have it so much better today that there is no comparison. I love to watch old movies, but to see how they lived back then is just amazing. To hear stories from the old timers about a time without AC, phone, electricity, indoor plumbing, effective medicine, highways, airlines and tv is just more sacrifice then I ever want to go through. Making enough money for one or two pairs of clothes, food to eat and a small house is not very appealing either. How many people in the 50's and 60's had what we take for granted today? Cars, appliances, comunications, entertainment and big homes. Things were cheaper, but incomes were also less and allot more peole died from work then old age back then too!!!

We're a long way from getting it right, but with modern, instant comunications, we're also more aware of the problems then before. I think that in time, we'll get better at seeing through the spin and holding those responsible for their actions. The possibility exists to make it better, it's just a slow process with allot of resistance to admitting the old ways didn't work and the new ways might not either, but something will and we need to find it.

Sorry for the soapbox,
Eddie

 

[EddieWalker]

Of all the people... Look at Ed McMan... At 85 years old, can't work anymore and is losing his home. Must have made some very bad decisions during his life. I believe he is also a retired Air Force Reserve General! What kind of leader is this?

mark

Who knows what happened to the millions he made while he worked. He's blaming the economy for that, but I think it's more on the lines of massive spending without any thought to where the money is coming from. It doesn't matter how much you have if you spend it all and then some.

He also said that they won $7.5 million in a mold case from their insurance company. Then they had to pay their lawyers, which only left so much for repairs and remodeling the entire house. I don't care how big the house is, I can solve the mold problem for under $1 million!!!! He got carried away and foolish in his remodeling and almost admits it, but still blames the economy because he can't get work with a broken neck and at 85 years old, doesn't have any retirement saved up.

He's just a big example of the overall problem. Spend like a drunk sailor and then blame everyone else for it. I'm sad to see anybody at his age go through this, but he needs to take responsibility for what he's done and quit blaming others.

Eddie

 

[Dyer retired]

Who knows what happened to the millions he made while he worked. He's blaming the economy for that, but I think it's more on the lines of massive spending without any thought to where the money is coming from. It doesn't matter how much you have if you spend it all and then some.

He also said that they won $7.5 million in a mold case from their insurance company. Then they had to pay their lawyers, which only left so much for repairs and remodeling the entire house. I don't care how big the house is, I can solve the mold problem for under $1 million!!!! He got carried away and foolish in his remodeling and almost admits it, but still blames the economy because he can't get work with a broken neck and at 85 years old, doesn't have any retirement saved up.

He's just a big example of the overall problem. Spend like a drunk sailor and then blame everyone else for it. I'm sad to see anybody at his age go through this, but he needs to take responsibility for what he's done and quit blaming others.

Eddie

I have a hard time feeling sorry for Ed McMahon, he's been in the entertainment business since he was 15 and made no end of money with Johnny Carson and endorsement deals, so he should have been putting some away. He was saying that his house is worth 7 million, but he is only getting offers of 3.5 million, suggesting that the 3.5 would not cover what he owes. He may have to downsize and live within his means. Eddie, as for spending like a drunken sailor, he would probably prefer being called a drunken Marine....former Marines are touchy that way. I think he flew Corsairs and was a flight instructor after that for the Marines.

John

 

[Charlesaf3]

Just skimmed it, but I've gotta say I totally agree with Eddie Walker.

The oil companies actually aren't making that big a profit - take a look at their percentage profit. Then look at apple or google.

Problem is, there's only so much oil, and a lot of indians and chinese using it now. Every year there will be a little less. Truth is, a couple of hundred bucks a year more on oil is painful, but if that's killing you, you really need to cut back.

And to really go out on a limb, there's a lot of ways $4 oil is good for this country. Its the only thing that will get us to use less, which is the only way we can stop sending our money to countries that don't like us very much.

 

[john_bud]

Problem is, there's only so much oil, and a lot of indians and chinese using it now. Every year there will be a little less. Truth is, a couple of hundred bucks a year more on oil is painful, but if that's killing you, you really need to cut back.

And to really go out on a limb, there's a lot of ways $4 oil is good for this country. Its the only thing that will get us to use less, which is the only way we can stop sending our money to countries that don't like us very much.

I agree completely. At $4.75 a gal (predicting next weeks price) it will hurt more than when it was $3.75, which hurt more than when it was $2.75, which hurt..... well you get the point.

There are very few people that actually MUST drive a lot. I guarantee that I can get back every nickle the higher gas is costing, unless you're a traveling salesman or similar!

1) drive less. Log where you go and why -> then plan and combine trips.
2) drive slower. Go 55 on the freeway. Coast to the lights. Coast to the stop signs. If you are less than 10 seconds between gas and brake, you're too aggressive.
3) maintain the vehicle. New air filter, fresh oil, pump the tires to the max, use thinner oils, use synthetic oils. Make dilly dern sure the brakes are not dragging. Remove all extra weight.
4) buy skinnier tires. Rolling resistance is a big deal.
5) ride your bike or walk when the distance is 2 miles or less. It will get some lard off your butt and that will reduce fuel consumption too .
6) car pool. 5 guys pooling will cut consumption by 80% each. Duh.


Problem is, we use the car as "Transportainment". That's both transportation and entertainment. And we project our personality (real or desired) with our choice of vehicle. Now we are having to face up to the fact that there is a cost involved! Mr Macho in the Hummer doesn't look so good now compared to Mr Wimp in the Prius, does he?

By the way, I am driving a '73 cougar convertible with 351C 4V, AOD transmission, 3.25:1 limited slip and true dual exhaust. Been tuning the edelbrock carb to gain mpg's and was at 19.9 mpg last fill up. As transportation, it's expensive. As entertainment, it's cheap. 2 people, sun, wind, smells of spring and it only costs 12-14 bucks an hour. The work is done in a Duramax diesel.

jb

 

[IllMarty1]

Eddie,

Amen. That is all!

Marty

 

[jimmysisson]

I agree there's no evidence of a cartel, and the oil co's are making good returns for their shareholders, as they have every right to do. Just that with the price of gas (and heating oil, which you have to buy in BIG chunks), we naturally get a bit ornery. It makes you wonder if we need to be subsidizing their exploration and new extraction techniques. Seems like that's what these profits would be used for if it was any of OUR small businesses. You'd put your profits back into your work, if you choose to, and not take handouts. .02 and out.
Jim

 

[john_bud]

Question: why is it a "solution" to tax a producer that is not able to keep up with demand? Especially when the producer is only making a single digit profit percentage? Does that make every profit in double digits "Windfall Profits"? Wouldn't it be a better "solution" to FORCE them to start drilling in Anwar NOW? The gulf ? The arctic? Shouldn't they FORCE the states to allow off shore wind power farms? (Currently blocked by multi-millionaire politicians that enjoy yachting with Buffy while drinking $1000 wine who think it will spoil their view -- Cough cough Kennedy! Cough Cough). Shouldn't they FORCE the construction of new nuclear power plants for cheap clean electricity so we don't have to burn oil for heat?

Since when is repressing sucessful commodity suppliers progress? Oh wait - forgot -> no politics.

jb