Friday, August 14, 2015
Freedom is Never Free
How much freedom do you want? As the song tells us, “Freedom is never free.” There is always a cost associated with freedom. There is a tension in all democratic societies between freedom and equality. Freedom guarantees inequality. Equality guarantees a lack of freedom. Reasonable people can disagree as to where the optimum balance point might be located. Our elected officials spend a great deal of time debating this question. On a more personal level the question becomes, “How much freedom are you willing to exchange for security?” When you are single any other single person is fair game. Once you are married, you have paid a price in freedom to obtain security in the most important relationship in your life. If you take a paycheck from an employer, for a certain number of hours per week, you have to do what your employer wants done, when and where he wants it done. You have exchanged a measure of your freedom for the security of a regular paycheck. It is necessary to understand that the “powers that be” do not want you to enjoy your freedom. The banks and the corporations that want you as customers would prefer you become their willing debt slave. They want you to give them money on a regular basis. The governments are no different. Every time you do just about anything, the taxman is standing there with his hand out. Although gambling is illegal in all but 18 states (not counting casinos on Indian reservations), 43 states run lotteries. The lottery has been described as a tax on the willing and as a tax on stupidity. Both statements are true. Interestingly, Nevada, home to Las Vegas the greatest gambling Mecca in the world, doesn’t have a state lottery. As always, the question is mindfulness. It is important that you consciously decide on how to use your money the way you want it used; not the way someone else wants it used. Back in the late 1960s Joe Dominguez began teaching ideas that ultimately coalesced into a personal finance classic, “Your Money or Your Life.” He found that people made better decisions about their money if they thought in terms of hours rather than in terms of dollars. Ask yourself, “How many after tax hours of my life will this ongoing expense cost?” Let’s take a look at one of my favorites, the cell phone. It is almost impossible to state with certainty how much cell phone service will cost when all is said and done, but these numbers are probably reasonable. I looked on the Verizon website at a 10 Gigabyte monthly data plan that cost $80 a month plus a $15 per month per phone charge. That totals out to $95 a month. However, that does not include any taxes or additional charges. Checking out copies of Verizon bills posted on line by angry customers, it looks like that could add another $30 a month. The offer I saw, didn’t mention anything about the cost of the phone. I expect that is extra, but that it could be rolled up in a contract. Let’s say that your deluxe data plan totals out somewhere in the $125 a month neighborhood. Then let’s postulate that your after tax take home pay runs $15 per hour. That means somewhere over 8 hours of your life will be spent working for the phone company for every month for the rest of your life. Is it worth it? If you are a real estate agent juggling 30 customers and 15 home owners while trying to find the locations and directions for addresses all over the county, you are probably taking home a good bit more than $15 per hour. The three hours or less it takes you to pay for that iPhone and Siri’s sarcasm is a bargain. If you are using this technological marvel to text your friends and keep up with facebook, maybe it isn’t such a good decision. I use a pay as you go phone service and a six year old basic cell phone with no data capability. It costs me $20.00 every three months; 10 cents a minute with rollover if I don’t use the minutes. The only time I ever ran out of minutes occurred when I had both my parents in hospital at the same time. I feel bad that as a retired engineer I have missed out on an entire technology, but for the life of me I can’t imagine how a smart phone data plan could pass a simple cost/benefit analysis given the way I would actually use the thing. Don’t bite the hook, make decisions that benefit the life you want to live, not the life somebody else wants you to live. Take a step toward freedom.