Deal or no deal?

Let’s play the hypothetical game. 

A rich billionaire approaches you and says “I will pay you your current salary for the rest of your life, on the condition you never generate any other income for as long as you live.”

This means if you currently make $50,000/year, this billionaire will pay you $50,000/year for the rest of your life (yes this will adjust for inflation). If you accept his generous offer, you forfeit your right to all future sources of income; investments, employment, inheritance, or otherwise.

Would you take the deal? 

Holy crap this question is tough for me to answer. I have to make a list before I can answer this question because it’s so difficult for me to wrap my head around.

Pros of taking the lifetime pension: 

Security.

  • I mean this is why we save for retirement and make investments right? One day we will be too old to work, so we have to create assets that will produce income for us. How sweet would it be to know you had a paycheck coming every month, forever, no matter what your circumstance!

More freed up cash flow.

  • Even though I’d be getting paid my exact salary, I’d have $10,000+ of additional disposable income. A guaranteed income stream means I no longer have to invest in a 401k or my Roth IRA. That’s a 15% raise effective immediately!

I could do whatever the heck I wanted.

  • I make a pretty good salary, how awesome would it be to make this same salary, but do something uber-exciting with my days. Like lead Young Life. Or work as a substitute teacher. Or become a gypsy and travel the world. The billionaire’s offer didn’t state I’m not allowed to work, only that I can’t collect any money from any work I do. I can think of at least five jobs that I imagine I’d enjoy immensely, but will never do because the pay for these positions isn’t high enough.

Cons of taking the lifetime pension: 

I’m only 27.

  • If I’m doing alright for myself after only five years in the work force, who knows what the next five or ten years could bring. By locking in my current salary for life, I would be giving up the potential to make more down the road. Zuckerberg was probably super pumped when he found out Facebook was worth $100 million, imagine if he cashed out then!

Complacency.

  • If I knew money was coming in, every month, no matter what, I’d probably get pretty lazy. I’d definitely work in some capacity, but since being fired wouldn’t scare me, I probably wouldn’t try too hard. Fear is motivating. Not to mention, there would be little motivation to be a top performer since I couldn’t collect on any bonuses, promotions, or raises.

Predictability

  • If someone could tell you the exact moment you were gonna die, would you want to know? Probably not. It would be weird knowing exactly how much time you did or didn’t have. I think the same would be true for my income. Knowing my salary would never change for the next 50+ years would take a lot of excitement out of life. Everything becomes significantly more safe, and I don’t really want to be remembered as the guy that lived a safe life.

Ultimately, I think I’d probably take the deal. We don’t feel like our current income limits our lifestyle, so if I could lock in the security we have now, forever, I’d probably do it. Who knows though, maybe I’m just saying that because this hypothetical situation is…. well, hypothetical?

What about you? Would you take the deal?  If you said no to the initial deal, at what salary would you strongly consider accepting the deal?

I realize this scenario is highly dependent on one’s age, salary, goals, family situation, etc. That’s why I think the question is so good. Everyone will have a different reason for picking the answer they did! 

You know you’re obsessed with personal finance when…

I’ve done this once before, and I thought would be worth doing again. You ever heard a joke like “You know you’re a redneck when…

…You own a home that is mobile and 5 cars that aren’t.

…You think a 401K is your mother-in law’s bra size

…The biggest city you’ve ever been to is Wal-Mart.

You know what I’m talking about? Alright, good. Let’s take that joke style and make it relevant to personal finance. Is this a little juvenile? Probably. But if you were looking for a boring blog you should have gone here (click that link for a gem of a blog). I like to keep things fun, so today we are gonna keep things lighthearted. Here’s what I came up with:

You know you’re a PFer when…

…you track your finances with a spreadsheet, Mint, and Quicken.

…you spend more time at work reading PF blogs than actually working

…someone asks you for a Bible and you give them a Dave Ramsey book

and

…you have more bank accounts than pairs of underwear

Alright dudes and dudettes, that’s all I could conjure up. How about you? Drop your “You know you’re a PFer when….” in the comments below!!!

A rant.

I can’t believe all the crap you women buy. It’s unbelievable. Girl Ninja and I are heading to Palm Desert, CA in a few days for Thanksgiving and we decided to do carry-ons for the short getaway. Since TSA restricts liquids to a maximum of 3oz per object, we had to head to the store to get some travel sized toiletries.

Look, I have no problem with GN wanting to be sanitized, beautified, and lotionized, but after she grabbed her fourth and fifth product I couldn’t help but laugh. I mean, homegirl picked up some travel shampoo, conditioner, face wash, body wash, body lotion, and face lotion. Are you kidding me? Really? Is all that necessary?

Maybe it’s a guy thing, but when it comes to cleanliness I only need one product. Shampoo. Who needs body wash, or face wash, or lotion, or conditioner when you have a bottle of Cucumber and Green Tea Dove Shampoo? I just rub the shampoo around my head until it gets soapy and then proceed to use that soap to clean the rest of my body. Heck I even use it to shave. Works like a charm, and by my precise calculations saves me A TON of money each year.

I’m convinced IKEA would go out of business tomorrow if the female population went extinct. As GN and I discuss our future home furnishings, there are few things we agree on. We need a bed, a couch, and a TV. We don’t need 98 different glass vases (filled with seashells) sitting on the bathroom counter. Nor do I care if my wall is painted white, off-white, eggshell, or ivory.

And don’t even get me started on decorative pillows. I mean do we really need to buy pillows that we aren’t actually allowed to use? “What do you mean I have to take them off the bed and put them in a trunk before I can go to sleep, only to wake up and have to put them back on the bed again?” Ahhhhh!

Men shop with a purpose. Women don’t. 

Let’s say John wants to buy a new shirt for work. His wife Tara, also needs a new dress shirt. They both have the same objective, but their process to completing the goal is usually very different. Before John even gets in his car to go to the mall, he already has an idea of what color and style of shirt he wants as well as what store he’d prefer to buy it from. John walks in to Banana Republic and five minutes later comes out victorious. He got his shirt.

Tara on the other hand, drives to the mall with three of her best friends. She gets caught up in “girls day” and after three hours of shopping, two new pairs of shoes, a salad from Cheesecake Factory, a new toaster oven from Crate & Barrel, and a tall non-fat vanilla latte from Starbucks, Tara heads home. Later that night, she shows John what she got at the mall. It’s not until this point that she remembers the reason she went shopping in the first place: for a shirt. “Oh well” she thinks, “I’ll just go back tomorrow.”

MEN: Anything I’m missing, or that you’d like to add?

WOMEN: What are some stereotypical guy things that get underneath your skin? Now is your chance to even the playing field 😉

note: Yes I know this whole post was dramatic, stereotyping, and probably offensive to some. Get over it. My blog is called Punch Debt In The Face, and in case you didn’t know, I should almost never be taken seriously.

Anything you want to ask a big financial institution?

I’m at USAA headquarters in San Antonio, TX for a few days and will have an opportunity to meet some representatives from various departments. Thought I’d give you all an opportunity to use me as a middle-man for any questions you might have for a LARGE financial institution. You tell me, I’ll ask them, and I’ll report back with answers.

Get as nitty-gritty as you’d like, I’m not shy and wont mind rolling my sleeves up or asking some awkward/tough questions. I’ll be posting their responses throughout the day 😉

If you have no desire to participate here is a picture of Clint Eastwood holding a baby armadillo…

Whale vomit is gold.

Ever wandered across a beach, only to stumble upon vomit from a whale? Oh you haven’t? Too bad for you. If you had, you might be like 8-year-old Charlie Naysmith who is now $63,000 richer because of it. Apparently sperm whales regurgitate a substance known as ambergris. Ambergris, in case you didn’t know, can make the scent of perfume last longer; making it a very valuable commodity.

Charlie will now have more in his savings account than most of us all because he decided to pick up some vomit.

This story makes me think about all the great opportunities I’ve ignored or overlooked. Maybe this $1.99 desk I bought from a thrift store was the desk Thomas Jefferson wrote the constitution on? Or maybe that old Ken Griffey Jr. card I have in my baseball collection is worth more than the $0.50 I paid for the pack of gum it came in? Hey if whale vomit can be worth thousands, why can’t my desk be worth millions?

The best return on investment I’ve ever got was a mini-van I purchased from my Grandma’s estate when she passed away. I paid $1,700 for the van and drove that sucker my entire junior year of college (and if you’re wondering if it had dual automatic sliding doors; the answer is yes!). One year after purchase, I put the thing up on Craigslist and sold it for $5,000 within a week. Buying a mini-van is the best financial decision I’ve made yet…take that personal finance!!!!

You never know when your next cash cow could present itself. One day you’re walking down the beach with your dad. The next you are selling whale vomit to some company for $63,000. Lesson learned. 

What’s the best return on investment you’ve ever made?

Humor me.

No, seriously. You humor me today. Ready….go.

Things I want to punch in the face: Single People.

Okay, before you burn me at the stake, let me clarify I don’t want to punch all single people in the face. No, just the annoying desperate single people who remind me everyday on Facebook and twitter that they haven’t yet found the love of their life. I get that you may have been single for a few years now. I also get that you would probably prefer to be swept off your feet by Mr/Ms Right sooner rather than later. But please, for the love of all that is good, stop sharing your lackluster love life with the world.

Here are just two such examples of Facebook posts that have recently polluted my feed:

and…

Or how about the million tweets I’ve seen that go something like “OMG super cute guy just walked by. :::squeals::: Really hope he comes and talks to me.”

No. No. No. You want to how to get that guy to talk to you? Approach him and start a conversation. Weird huh? Tweeting to a bunch of random strangers about some fantasy love affair you are having with a guy that “just walked by” will pretty much ensure you stay single for at least a few more years.

“That girl’s desperation is totally sexy”

– Said no one ever. 

Now before you go off and accuse me of “not understanding” single life because I am married, let me remind you that from my senior year of high school, all the way until my senior year of college, I was 100% single. Not one girlfriend. Heck, not even one prospect. Not only had I not had a girlfriend for that four-year stint, but I hadn’t kissed anyone during that time either.

College is supposed to be one’s dating prime, right? 

I get wanting to be in a relationship, I really do. But if you aren’t comfortable/confident in yourself as a single individual you aren’t ready to be in a relationship. In fact, the only thing more annoying than a status update from a desperate single person, is a status update from a desperate ex-single person who has found themselves in a new relationship. You know those status updates I posted above? Well she’s got a new boyfriend and now I get updates like this on my news feed:


Glad homegirl found happiness, but come on I don’t need a status update every day about how much you love the guy you’ve known for 72 hours. I’m not so convinced she actually likes this guy as much as she just likes not having to be single anymore. Anyone else get that impression?

Being single is not a disease nor should it be your identity. If your status updates and tweets make it seem like your love life (or lack thereof) is your primary concern I want to challenge you to use a different metric to measure your worth….or at the very least do yourself a favor and delete your Facebook 🙂