Yesterday Yahoo Finance ran this story from the NY Times about a woman in her early 60s who went to a retirement boot camp. The article also included some information about the concept of a retirement boot camp. Early in the article it was disclosed that the boot camp cost $850 and the admission that at first she felt like she had just blown $850 but it turned out to be a productive experience for her.At the time I read the article the most recent comment on it was "Yes Maam! You blew $850.00!" Most of the comments, but not all, took the same tone about this sort of thing being a ripoff if it costs money or an investment product pitch if it is free. It is easy to conclude that it was a waste of money but the lady profiled came away feeling like it was money well spent. From the standpoint of staying on your own mat maybe it would be a waste of money for you but not someone else. And if I am not on my own mat then yes this seems like just throwing money away.
If you agree that she threw money away on something that could have probably been found with minimal web-work then retirement boot camps are not your financial blind spot. That is great but then we all need to ask ourselves what type of money-wasters are we blind to? A common one is motor homes. I mentioned motor homes in this context back in February and there were a lot of comments defending the purchase.
Some folks get a lot of use out of RVs but I seriously doubt the majority of buyers do indeed use them enough for the economics to work. In that post I mentioned renting one from Cruise America for a couple of months as either a litmus test or as a once or twice in a lifetime trip. In the February post I dug up a quote of $5600 for a modest RV for two months. Hey go crazy and get a $10,000 two month rental. Doing that twice in a few years would be a whole lot less than buying, registering and insuring an RV.RVs are just one example of things people love to buy only to end up wasting a lot of money on. Some other examples include boats of all kinds, cars of all kinds, old motorcycles, unnecessary home remodels and I'm sure you can come up with many others. My blind spot is a small one but I love going to sporting events away from home. In the last two years-plus I've been to the Maui Invitational Basketball Tournament twice, Fenway Park and AT&T Park to see the Red Sox. I plan on going to see San Diego State whenever they play their first football game on the smurf turf in Boise.
Life obviously needs to be lived, I am a huge believer in enjoying the journey but a lot of people spend beyond their means on things that no doubt can be rationalized but require large multi year financial commitments. Mistakes get made of course (our Hilo adventure) and that is just how it goes but people need to learn from their mistakes but some people never realize that their blind spot might be a mistake or that it threatens their financial security, well not until it is too late. Like with most things there is a balance to be sought and struck so that life is lived robustly without wasting what turns out to be a lot of money.
As I said have before, with this sort of thing for some people there is no hearing that their thing is really a big waste of money. For anyone who really is wasting a lot of money on something like this the answer doesn't have to be giving it up (which might be difficult if something had to be sold at a large loss) but maybe can be making some changes to make the endeavor cheaper.This may have seemed a little harsh but most successful financial plans require answering difficult questions and making tough decisions.
10 comments:
MHs are expensive. Mine cost 150k plus tax.
My estimate is it cost me $20k a year if I do not use it and more if I do use it. We could argue about depreciation, expenses, etc. of diesel MHs but those are my rough estimates. People do spend more.
I figure you need to use it 100 days a year to make it worth while. Actual additional cost to use it is not so bad. If you could full time and eliminate home taxes etc it would really not be outrageous.
If you have 500k saved for retirement I would say it is a rather expensive purchase if you do not live in it full time. If you have a few million then why not spend some of it.
In about 1984 my wife and I went to a financial advisor. Paid him a flat fee; maybe $500. He helped us so much by simply asking how we spent our money and what we wanted to do with our lives. We found that we had no idea where the money was going. It was a key moment & we haven't looked back.
Hey Roger,
You said "things people love to buy only to end up wasting a lot of money on. Some other examples include boats of all kinds, cars of all kinds, old motorcycles, unnecessary home remodels "
I think I might add purchasing a second home in an occasional vacation spot like Hawaii to that list....
Like you said, live and learn...
I do acknowledge the Hawaii house, sixth paragraph;
Mistakes get made of course (our Hilo adventure) and that is just how it goes...
You know the old saying "If it floats, flies, or fornicates it's cheaper to rent than buy."
I know fornicate isn't exactly correct term, but this is a family frinedly place :)
I will concede a MH does not make sense for many, but your rental costs are way low for my MH.
You need a lot of time to use it.
You need a budget that can afford a $20k hit just to get started.
Or you need to sell your house and full time. Eliminating home costs make this much more feasible.
I can afford the 20k hit and have the time to spend 100 days a year goofing off.
You might be surprised that the couples where one just dodged cancer or what ever ignore the economic considerations to an extent. Thank god we are not in that category.
My wife has wanted an RV for years.
I just don't understand the fascination with this money pit.
I love living in coastal Carolina, and I don't intend - ever- to buy a double wide on wheels mixing with old farts and wannabee, smoked out Dixie Chicks minus a few teeth knawing away at beef jerkey and some road kill casserole at an insect infested, dusty, urine-scented campground.
If it's not at least a four star hotel or a five star cruise ship in world-class locations, count me out.
anon 4:44
it is not about who is right it is about freedom to choose.
If you do not want campfires in clean campgrounds, bison, mount goats, long horn sheep, a grizzly and her cubs then don't
My bed does not have bed bugs and I eat at 5 star restaurants or at home or wherever I choose.
Been retired 17 years. I keep seeing stories that no one should buy homes any more. The home price crash has turned people off on owning a home. If I was younger, I'd be looking to buy a couple of rentals about now. Contra indicator and all that.
I don't like to own things that depreciate - cars, boats, motor homes, etc. Rent and pay for the time you use them. Let some one else absorb all the depreciation.
If you live in a state with high sales taxes like I do, you never want to buy a car, boat, RV, or other depreciable item new. The sales tax is charged on the new price and the second hand buyer pays none of that. 8.5% on a $25,000 auto comes to $2,125 and it is gone for good. Unless you keep an auto for 10 years there's no way to justify paying that tax and absorbing the depreciation.
Some may disagree. Just my hang up, I guess.
as far as rent vs own a MH I would concede <60 days a year rent and ownership makes little sense unless you use it 100 days a year.
I also concede it is an expensive toy if you do not live in it full time. Not really that bad if it is your full time home.
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