For Everything, Apparently There's Visa!

"That'll be $2.47," the cashier said.  The thirty-something woman who looked like she had just finished an aerobics class fumbled through her oversized shoulder bag and pulled out a credit card.  The cashier didn't even flinch as she processed the transaction.  I thought to myself..."Lady, you don't have three lousy bucks in that gargantuan bag?!"  Apparently nobody carries cash anymore.  Life does, in fact, take Visa.

Not so long ago, using plastic for a $2.47 transaction would have been looked upon with disdain.  Store managers would be summoned and fingers would wag.  Now its no big deal.  Cash is passe.

The folks at MC and Visa have achieved their goal of making card use so ubiquitous, so commonplace that nobody gives it a second thought.  Its a super deal for the card companies who double dip from consumers and retailers alike on the same transaction.  The whole idea is to make spending and purchases easy.  Ridiculously easy.

If we rewind a few years, we can see what happened when it became ridiculously easy to get a mortgage.  Buying a $650,000 home on a $20,000 income was no problem.  Through the process all the players took their cut and looked the other way.  We see where that got us.

Thankfully, consumers have been holding back on big purchases and reducing credit card debt...a little.  Personally, I despise credit cards but many aspects of American life don't function well without one.  If I had no credit card I couldn't rent a car, book a hotel, buy plane tickets, purchase anything online or over the phone, ....and the list goes on. So I have a credit card....ONE credit card.  I don't need another one.

The big problem I see with credit cards is that they're too easy to use and nobody warns you if you're spending too much.  No alarms, no sirens, no text messages...just swipe and be on your merry way...until its too late.  A non-credit card transaction goes like this...."Boy, I'd really like that new TV. The tag says it's $600. Hmm, I have a gum wrapper, half a movie ticket and $38 bucks in my wallet.  Guess I can't buy it."  End of story.  If you have a credit card..."I really DESERVE that TV.  I'm gonna go for it! I'll just put it on my card."  It isn't until three weeks later after you've been watching everything in glorious high def that the bill comes in.  "Aw, snap!  I don't get paid for two weeks.  I'll just pay the minimum for now."  Curtain rises....enter the accrued-interest-on-average-daily-balance fairy....

Although credit cards were around when I was young, society encouraged more of a cash-and-carry policy. If you didn't have the money, you didn't buy it.  Even if you did have the money, it wasn't uncommon to pull out your wad and count off the bills required to finalize the transaction.  If the proposed post-purchase cash wad was now too small, the potential purchase might be shelved.  The counting of the cash provided us a reminder...a reference point to truly measure the cost of a purchase.  Now, a purchase is just a card and a signature.  There's no reference point....no pile of currency to be handed over.  Be the purchase for $2 or $2,000, there's only the card.  Visa wants it that way.

When I go to restaurant with friends, I screw everything up.  The cash underneath the four credit cards is always mine.  I count it out and I'm done.  No paperwork or bills to contend with later.  My friends ask "Why are you paying cash?"  It's as if cash is now only used for special occasions....like trips to the strip club or playing three-card-monty on the street.  Wouldn't want to use it all up, would I?  I'd have none left for debauched activities.  Sophisticated grown-ups use credit cards...right?  I guess that's where we're headed.  Using cash makes me feel like a gangster anyway.  "Don worree'bout it yooz guys.  I got plenty a cash."  The only thing that would make that statement sound better is if I had a big fat Cohiba clenched between my teeth when I said it.  Seriously, though....cash isn't all that bad.

One recent client of ours had a Home Shopping Network addiction.  We estimated she'd spent nearly $50,000 on the stuff she saw on TV and she wasn't rich.  Let's change the scenario....Let's say she had the contents of her bank account neatly laid out on the coffee table in piles of currency and every time she decided to buy something that was on the TV she had to lean forward, count out the bills corresponding to the amount of the purchase and hand it over to someone.  What are the odds there'd be two full storage units of unopened HSN stuff and an empty bank account?

I rest my case.

Oops!  Maybe I DIDN'T need that _____ <--- Insert frivolous purchase here.

Paralysis

It's been one of those days.  A day where I get to see some of the harsh realities of people's lives.  Sadly, some of these realities are largely preventable.

We'll call her Lori.  I could hear the stress in her voice over the phone.  She freely admitted that she was calling me because I was her last hope to make some desperately needed money.

I've received these calls before and the consultation isn't always pleasant.

I pulled up to the smallish house...the lawn hadn't been tended to in some time.  The foreclosure notice on the door was wrinkled and faded, having been tacked to the door for months.  Underneath the body of the notice, the occupant scrawled "I still live here.  Please call me."

I'm a solutions kinda guy.  If there's a way to solve a problem in a way that works out economically for everyone, I can usually figure it out.  Today that wasn't going to happen.

Lori showed me the interior of her home.  It was neat and well cared for... in stark contrast to the exterior.  She was visibly rattled...fully aware that the sheriff could arrive at any moment to evict her.  She called me to remove some belongings and sell them at auction with the hope that I could solve two problems... money and an inability to move large items from the house.  Unfortunately, the items she showed me were of little value and were hardly worth moving.  Seems her mom had a different take on the value of these items and stressed that she "needed" to get a certain amount for them.  My response was, "Not on this planet."  It wasn't what she wanted to hear.  I explained the simple economics of demand and changing tastes and that I can't control what the general public desires or doesn't desire.

"But it MUST be worth more than that! I'll just keep it then because I just CAN'T tell my mother that all this isn't worth what she thinks it's worth.  I just CAN'T."  In fact, what she was presenting to me for sale was only a small portion of what was in the house.  The rest of the (much more salable) items all had a lot of sentimental value.  There was a trunk that belonged to her deceased husband, a chest that was her grandmother's...and so on.  She couldn't sell any of those items and refused to sell any of the "junk" if we couldn't get what her mother said she should get for it.  Upon making these statements, she broke down, curled up on the sofa and cried.  Some days, I don't like my job very much.

I took a deep breath and prepared to explain to her the true gravity of her situation.  I explained that I understood about sentimental value, but that she intended to tote around items that reminded her of her sad past.  "Do you want to look forwards, or back?" I asked her. "How are you going to move them?" Then I looked right at her and asked...."If you stood out on the lawn with your back to this house and in an instant it all disappeared, would you feel relief?"  She didn't hesitate to say "YES."

The reality was that she had no way to move any of the contents of the home.  She had no job and barely enough money to eat and at any moment she could be forcibly removed from her home which the bank had foreclosed upon some months earlier.  Odds were that she was going to lose everything when the bank changed the locks and the law escorted her from the property.  I knew that, but she didn't seem to understand that impending bit of reality.  Through the sobbing and the hard luck stories she continued to cling to and be paralyzed by the belongings that surrounded her.  If she couldn't accept reality, I couldn't help her.  Through her emotional breakdown I could hear her say that she "couldn't live like this anymore" and that "nobody would help her."

It was hard to witness and sadly, I enter into just such a scene or variations thereof on a regular basis now.  I see the ravaged lives that recession causes, but in my experience much of it is preventable.  If we could just get past the attachment to things...that desire for more and bigger.  I know my view is a jaded one and I couldn't help but think this poor girl was hanging onto things for comfort as everything around her fell apart.  I get it.  My last words to her were "Lori....they're just things....let them go.  You don't have a choice."

I realize those words could be interpreted as self-serving, but they weren't.  I really wanted her to see the world for just a moment through the eyes of someone who deals with this sort of thing almost daily.  Lori looked up at me, attempting to compose herself, and said...slowly..."This stuff is weighing me down.  It's keeping me from moving on and I don't know what to do about it."  She wasn't hearing me at all and I felt powerless to do anything about it.  She murmured something about going back to Spain and I told her that she should do just that.  I apologized for not being able to help her, wished her good luck and before I left, I heard her say "You were my last shot.  I thought for sure you could help me.  I got all this stuff together for you."

One of the things I learned quickly is that in business, you NEVER, EVER let emotions dictate business decisions.  Lori was paralyzed.  I couldn't help her.  Chances are that by the time she understood about letting things go, it would be too late.

Enjoy Spain, Lori.  Start again.  Don't get attached to things. That goes for everyone.

Are a few pieces of furniture worth this sort of anguish?