Double Journey

This may seem obvious to a lot of people but it wasn’t so obvious to me until today. You see, I don’t sign up for a lot of credit cards. In fact, I have only one credit card. Ironically, I was talking about this very fact with Jenny today. We discussed some statistics that showed that a group of people had as many as ten credit cards each. It was shocking to someone like me because I have no need nor do I have any desire to have more than one credit card.

But today, I wanted to add my girlfriend to my credit card so that I could better manage our expenditures and I can pay for things when she is the one actually going to the store. A pretty common thing for us which we have gotten around the last few years by me just paying her back. I decided I had enough of tracking all of this, so decided to just sign her up on my account. The process couldn’t have been more easy. I logged in to my account online, filled out about 5 questions, and they are going to send me a second card with her name on it.

I was dumbfounded by how easy they made the process. Having been in charge of a sign-up process in the past, I can appreciate how hard they actually worked to make it as simple as it was. Of course they make it this simple because it is crucially important to them to make sure people have as many credit cards as they want. The more steps you put in any process, the more likely someone is to drop out. In reality, I’m glad the process was easy, I wanted to get one and I don’t like being bothered with things that are hard to do. But it made me think of a television show I recently watched about how easy it was for people to get cards and how they got themselves into trouble. Now don’t get me wrong, I don’t feel a lot of sympathy for these people. I’m all about personal responsibility and hate it when people blame the big bad credit card companies for doing what they are supposed to do, make money.

How about you, how many cards do you have? Do you find it really easy to just sign up for new ones?

I was driving in my car when I heard an ad for debt consolidation. These ads are everywhere, so it must be pretty good business. Anyway, something I heard on the radio really struck a nerve with me. To paraphrase the commercial it basically stated, “Have too much Credit Card Debt? Don’t you realize that the credit card companies are after you by charging you high interest rates? It’s not your fault. Blame the big bad credit card companies who are out to get you!”

Now I won’t dispute the fact that credit card companies are trying to make a lot of money off of you. After all, they are a business. However, this commercial really just bothered me. Seriously folks, when you have credit card debt, you really have nobody to blame for yourself. There are times where there is a legitimate emergency, and you have to use credit to get out of it. But these are few and far between. Even in these cases, I would argue it is still YOUR fault if you have EVER purchased something you didn’t need on a credit card and left a balance because you should have been saving the money to put into an emergency fund in the first place.

So instead of blaming other people for your problem, why don’t you stop buying things you can’t afford? Don’t let the credit card companies charge you interest in the first place. Be in control of your own finances, and you will be in control of your own destiny. I know it can be easier to just point the finger of blame at someone else. But when you point that finger back at yourself, you will find that more often than not, accepting responsibility for your own mistakes will be far more productive.

Don’t try to keep up with the Jonses. After seeing a post on MoneyNing about working on Chirstmas, it got me to thinking about how people always try to compare themselves to other people. While MoneyNing’s post was about working on Christmas Eve, I think the advice is true in ALL aspects of life.

I used to really care what other people thought. Thank god I got over that before I actually started earning my own living. Ever since I was on my own, I cared much more that I was doing well and not so much that people thought I was doing well. Don’t get me wrong. Sometimes I look around at my peers and want the things that they have. Would I like the nice car or the newest gadget? Of course. But I would also like to stop working at a young age, and I won’t be able to do that if I accumulate stuff rather than wealth.

It’s just a cycle you can’t win. So stop trying to buy whatever it is that you think you have to buy just to look like you can. Believe me, the Jones’ probably can’t afford it either, and you are trying to win a fool’s race.  All that will happen is that you will push yourself into debt.  And you won’t even accomplish what you want, because the Jonses really don’t care what you have, they have their own problems.

Be rich, don’t look rich.

Tomorrow is Christmas. Not to sound so cynical, but it really is one of those things that has turned into a consumer driven holiday. Given that, it gives great insight to where we are as a nation economically and where we might be headed for the next year.

This year looked to be a bad year for retailers. Many people were blaming the subprime mess and credit crisis for the problems. Others believed that the consumer was worried about a recession. But it looks like there may have been a slight last-minute rush to the stores.  However, I wouldn’t rush to crown this a great success.  Other reports I read are that Credit Card debt is rising, so much of this consumption may indeed be borrowed from the future.

This holiday season will be crucial to myself because it will dictate a lot about where I think the economy is actually going this year, and thus my investment strategy.  You see, people vote with their wallets.  It is an important psychological thing for people to buy things during this time of year as to not disappoint their loved ones.  If people aren’t spending, they are worried about the future.  If they are worried about the future, they must see things on the horizon that really worry them.

I’ve been a natural bear for a while, so I need to temper whatever news comes out about the consumer with my own internal bias.   I would be shocked if this holiday season turns out to be a success as I think the wealth effect will be working in reverse.  People are starting to realize that their home is not an ATM.  I think it is happening slower than it should, but it is happening.  If people feel poorer, they will spend less, and the economy numbers will be affected.