Wednesday, May 4, 2016

THE ECONOMICS OF PICKLES AND PORSCHES

I have noticed that since I retired more than five years ago, that we eat a lot more pickles.  Despite my wife’s insistence that she married me for better or for worse, but not for lunch, we eat a lot more lunches together, at home, with pickles.  I never took a pickle in my lunch at the office or in the field, it was too messy and it would just be weird.  Now I have one almost every day now when I eat at home, mostly with grilled cheese or tomato and avocado sandwiches, with potato chips too and a cold glass of milk.

So it dawned on me that I should invest in pickle companies since that as the bulbous demographic of the baby boomers starts to retire they will eat a lot more pickles.  I have always thought that if I tailored my investment strategy to follow and meet the needs of the baby boomers and their families, I would be a rich man.  From Diapers to Depends, Preschools to Assisted Care Living, Silly Putty to Slinkys, computers to cell phones, trophy homes to trophy wives, Harleys to Winnebagos, this generation has been a prolific consumer of everything, incurring national and personal debt imagined by previous generations.  This is a bad thing but an ongoing opportunity for me.  I’m investing in pickles.

Moreover, there is an ongoing and obsessive interest in sending our kids to trophy colleges.  We spend $50-75,000 a year for their entitled privilege of attending a prestigious university. Then we get that status-symbol decal to put on the back of our cars so that people can judge our chosen academic institutions by the skill, or lack thereof, with which we operate our vehicles. That’s a half a million dollars spent for higher education, per kid, including graduate school and the obligatory summers and semesters abroad in Europe, China and Guatemala.  The kids are too busy kibitzing around to work to help fund this or pay for their debt so it translates, for us, to another mortgage or another ten years working to pay for it.  Then, after graduation, they move back in with us while they find themselves, their passion or something to do.  We might as well buy them a Papa Murphy’s franchise that will guarantee equity and income forever, instead of paying for expensive schools.  They can Google anything they need to know anyhow.
Choosing an appropriate school is a tough decision for a 17 year old, even if they do not consider the financial implications.  It is analogous to buying a car.  If they want to go top shelf or Ivy League, it’s like buying a Mercedes and if they want a small exclusive private school it is like buying a BMW.  If they want to go to a name brand, sassy or sport-o school it is like buying a Porsche and if they go to school abroad it is like driving a foreign car, like a Citroen.  If they pick a State University it is like buying a Ford or Chevy and if they go to local college it is like buying a Volkswagen.    If they live at home it is like driving your parent’s car - a station wagon or a minivan and if they choose a Community College it is like getting a motorcycle or moped.  You are what you drive. 

The current higher education model is to start at a local school, then transfer and graduate from the state university and go to the trophy schools for the masters and the name diploma.  It’s like learning to drive with a moped, eventually getting a VW and finishing with a Mercedes.  Makes sense to me.  But in the end it is just transportation, a way and the means to get from point A to B.  Is a Mercedes 10 times as good as a VW.  Maybe.  I went to a trophy school and learned a lot and met a lot of great people but that can happen at any school, if you put your mind to it and your back into it.  I sent my step daughters to State Universities for less than $1000 a semester for tuition and they turned out well.  In the mean time I paid off my bills, cars and mortgage and retired at 53. 


In high school I raced my old 59’ VW against a friend in his brand new, super charged, muscle car.  He blew me away at the start but then he hit a red light.  As he sat there waiting for the light and me, I cunningly timed the green light perfectly, passed him on the shoulder at full speed and beat him to the finish line, by a nose.  So in a sense it is not what you drive but how you drive it.  It’s not where you learn but how you learn and how you live.  Be more, appear less. 
 No matter where they go or what they drive, encourage and enable your kids to just find a need and a niche and fill it well, with joy, style and character.  Sell pickles.