Marketplace - American Public Media

Lizzie O'Leary learns a lesson in debt and confidence

Wed, 2015-03-25 12:55

The interest rate made my stomach drop: 27.6 percent.

I stared at it, trying to understand how that was even possible. I’d signed something else, hadn’t I? A lower rate, I must have. It was 2000, I was 24, making less than $30,000 a year, and the American Airlines Citibank Card was the first I’d ever had. It was shiny and silver, with the old airline logo at the top. Get miles! Live like other people in New York! Welcome, kid.

Foreshadowing what was to come, I couldn’t remember the credit limit, only what I bought.

A gold, strapless Nicole Miller dress for a glamorous friend’s sister’s wedding. Gold sandals. A filmy wrap for around my shoulders. A Meg Ryan “You’ve Got Mail” haircut. Altogether, it cost maybe $1,000. Outside the careful budget my stepfather helped me draft (and I promptly ignored).

Instead, I got a lesson in debt, confidence and identity that still lives somewhere in that startled gut.

I grew up privileged. Sidwell Friends, a private Quaker school in Washington. Williams College in Massachusetts; my family paid for it. Financially, I was spoiled, because I knew next to nothing about money. I didn’t have to. I had the kind of parents who allowed me to focus on academics and curiosity.

Moving to New York, I took a job as a desk assistant at ABC News. I answered phones, arranged newspapers for senior executives and changed into running shoes in the afternoons to sprint script pages up and down the hall to Peter Jennings.

And I was surrounded by wealth I’d never seen before. Women my age who wore Manolo Blahnik shoes. Carried designer handbags. Were whisked past lines into clubs I fantasized about. Feeling desperately uncool, I moved into a pint-size studio apartment in the East Village (again, too much money) from an Upper East Side studio. The remaining squatters next door shouted “Die yuppie scum!” in the mornings.

I was naïve, unhappy and lost. All I wanted was to fit in.

I put things on the card. And more. And more. So full of self-doubt, so unsure of who I was (Could I someday be a reporter? Would that guy from MTV ever call me back? Maybe a leather jacket would help?), that spending became an outlet for my insecurity. Anything to seem less scared, less wrong.

Until the day of 27.6 percent. I’d hit my credit limit. I got the penalty interest rate. I missed payments. And lots of letters with big red type. The debt ballooned to close to $10,000.
I blew up my measly credit score. Citibank, rightly, had no sympathy for a privileged kid who’d gotten herself into trouble. Frankly, I don’t have any now.

I didn’t even have the nobility to work all the debt off. I paid off half of it with savings that I swore I would never touch until I was 30, and the rest by rationing my income over time. And I canceled the card.

It still followed me for years. On my credit reports. Apartment rentals. The loans I took out for grad school.

The experience lingers on in the understanding that “retail therapy,” shopping to make yourself feel better, is a farce. And nobody, certainly nobody I’d want to befriend in my adult life, finds identity through things.

The loneliness that comes with being young and unsure of yourself is actually a great teacher — one that material things can never match.

Lizzie O'Leary learns a lesson in debt and confidence

Wed, 2015-03-25 12:55

The interest rate made my stomach drop: 27.6 percent.

I stared at it, trying to understand how that was even possible. I’d signed something else, hadn’t I? A lower rate, I must have. It was 2000, I was 24, making less than $30,000 a year, and the American Airlines Citibank Card was the first I’d ever had. It was shiny and silver, with the old airline logo at the top. Get miles! Live like other people in New York! Welcome, kid.

Foreshadowing what was to come, I couldn’t remember the credit limit, only what I bought.

A gold, strapless Nicole Miller dress for a glamorous friend’s sister’s wedding. Gold sandals. A filmy wrap for around my shoulders. A Meg Ryan “You’ve Got Mail” haircut. Altogether, it cost maybe $1,000. Outside the careful budget my stepfather helped me draft (and I promptly ignored).

Instead, I got a lesson in debt, confidence and identity that still lives somewhere in that startled gut.

I grew up privileged. Sidwell Friends, a private Quaker school in Washington. Williams College in Massachusetts; my family paid for it. Financially, I was spoiled, because I knew next to nothing about money. I didn’t have to. I had the kind of parents who allowed me to focus on academics and curiosity.

Moving to New York, I took a job as a desk assistant at ABC News. I answered phones, arranged newspapers for senior executives and changed into running shoes in the afternoons to sprint script pages up and down the hall to Peter Jennings.

And I was surrounded by wealth I’d never seen before. Women my age who wore Manolo Blahnik shoes. Carried designer handbags. Were whisked past lines into clubs I fantasized about. Feeling desperately uncool, I moved into a pint-size studio apartment in the East Village (again, too much money) from an Upper East Side studio. The remaining squatters next door shouted “Die yuppie scum!” in the mornings.

I was naïve, unhappy and lost. All I wanted was to fit in.

I put things on the card. And more. And more. So full of self-doubt, so unsure of who I was (Could I someday be a reporter? Would that guy from MTV ever call me back? Maybe a leather jacket would help?), that spending became an outlet for my insecurity. Anything to seem less scared, less wrong.

Until the day of 27.6 percent. I’d hit my credit limit. I got the penalty interest rate. I missed payments. And lots of letters with big red type. The debt ballooned to close to $10,000.
I blew up my measly credit score. Citibank, rightly, had no sympathy for a privileged kid who’d gotten herself into trouble. Frankly, I don’t have any now.

I didn’t even have the nobility to work all the debt off. I paid off half of it with savings that I swore I would never touch until I was 30, and the rest by rationing my income over time. And I canceled the card.

It still followed me for years. On my credit reports. Apartment rentals. The loans I took out for grad school.

The experience lingers on in the understanding that “retail therapy,” shopping to make yourself feel better, is a farce. And nobody, certainly nobody I’d want to befriend in my adult life, finds identity through things.

The loneliness that comes with being young and unsure of yourself is actually a great teacher — one that material things can never match.

Nicole Childers' teenage lesson is her adult buffer

Wed, 2015-03-25 12:54

The day after my high school graduation, at the age of 17 and with an acceptance letter to an Ivy League university in hand, my foster mother asked me to move out of her house in San Diego.

I was never sure why. I was a good kid. I had just graduated with honors, never got into any trouble, and I had secured a summer job. Suddenly my visions of getting on a plane at the end of the summer to start a new chapter, outside of a world where I’d been either at the mercy of an abusive parent or an overwhelmed and unpredictable foster care system, faded instantly. Now I had to find a new place to live, or take my chances in a group home or another temporary foster home placement.

As I contemplated my now limited options, a wave of regret overcame me. I regretted allowing myself to believe that that one acceptance letter meant I no longer had to worry about my future. I regretted every Reese’s Peanut Butter Cup or cassette tape I’d bought with the little bit of money I’d made working an after-school job. I had allowed myself to grow too comfortable in my foster home, when I should have been saving for a plane ticket to Philadelphia.

Just a day earlier, I had walked down the aisle at my high school graduation to receive my diploma with my head held high, convinced that I was finally close to having it all. College was supposed to provide me with a fresh start and the basic level of stability I had been missing: a safe roof over my head and three meals a day until graduation. But first I had to avoid homelessness.

An adult who worked at a school I had once attended, whom I won’t identify because she could have gotten into trouble for helping me, came and picked me up. I ended up living with her for that summer rent-free. She bought my plane ticket to Philadelphia, and a friend of hers paid for my books my freshman year at the University of Pennsylvania.

If it hadn’t been for their generosity, I’m not sure I would have made it to college. Aside from my financial concerns, feeling rejected by my foster parents without explanation took a big emotional toll on me. Had I been out on the street or forced to live with strangers who ostensibly would have had little to no investment in me or my success, I’m not sure I would have had the fortitude to figure out a way to get there.

That one incident with my foster family left an indelible impression on me throughout my college career. The summer before my senior year, I became an intern for Diane Sawyer at ABC News. After I graduated, I moved to New York to work there full time. I was suddenly thrust into a life that exceeded my wildest dreams. Just a few years earlier, I had been a kid in foster care with nary a penny to my name, and now I was working for one of the top media companies in the world with some of the highest-paid TV news anchors. I was surrounded by glitz and glamour, but, as an entry-level desk assistant, my personal financial reality stood in sharp contrast.

So I lived paycheck to paycheck in a small Spanish Harlem studio. Every pay stub arrived coupled with the memory of the day after my high school graduation, reminding me that no matter how far I’d come, I was still one curveball away from losing it all. I racked up credit card debt buying groceries and other basic necessities so I could use part of my salary to put into savings, just in case. If I lost my job for whatever reason, I had no parents to go home to or help me while I got back on my feet. I had learned early on that I would always have to be my own backup plan.

By the time I was 27, I had been promoted into a senior leadership role at another company, and my salary reached six figures. In the decade since, however, the industry has contracted and I’ve been laid off twice. Both times I had enough savings to make ends meet. During the periods of unemployment, I did everything from editing books to working as a celebrity branding and social media consultant. No matter how much money I’ve made in full-time jobs since then, the fear of losing it all still lingers.

I don’t bear any ill will toward my foster family for abandoning me. I see the situation as an unfortunate personal twist of fate that taught me an early but important lesson about success and money. The more successful you become and the more money you make, the easier it is to get caught up in and enamored of both, but neither is guaranteed for life. And that is a lesson I will forever be grateful for.

Nichole Childers' teenage lesson is her adult buffer

Wed, 2015-03-25 12:54

The day after my high school graduation, at the age of 17 and with an acceptance letter to an Ivy League university in hand, my foster mother asked me to move out of her house in San Diego.

I was never sure why. I was a good kid. I had just graduated with honors, never got into any trouble, and I had secured a summer job. Suddenly my visions of getting on a plane at the end of the summer to start a new chapter, outside of a world where I’d been either at the mercy of an abusive parent or an overwhelmed and unpredictable foster care system, faded instantly. Now I had to find a new place to live, or take my chances in a group home or another temporary foster home placement.

As I contemplated my now limited options, a wave of regret overcame me. I regretted allowing myself to believe that that one acceptance letter meant I no longer had to worry about my future. I regretted every Reese’s Peanut Butter Cup or cassette tape I’d bought with the little bit of money I’d made working an after-school job. I had allowed myself to grow too comfortable in my foster home, when I should have been saving for a plane ticket to Philadelphia.

Just a day earlier, I had walked down the aisle at my high school graduation to receive my diploma with my head held high, convinced that I was finally close to having it all. College was supposed to provide me with a fresh start and the basic level of stability I had been missing: a safe roof over my head and three meals a day until graduation. But first I had to avoid homelessness.

An adult who worked at a school I had once attended, whom I won’t identify because she could have gotten into trouble for helping me, came and picked me up. I ended up living with her for that summer rent-free. She bought my plane ticket to Philadelphia, and a friend of hers paid for my books my freshman year at the University of Pennsylvania.

If it hadn’t been for their generosity, I’m not sure I would have made it to college. Aside from my financial concerns, feeling rejected by my foster parents without explanation took a big emotional toll on me. Had I been out on the street or forced to live with strangers who ostensibly would have had little to no investment in me or my success, I’m not sure I would have had the fortitude to figure out a way to get there.

That one incident with my foster family left an indelible impression on me throughout my college career. The summer before my senior year, I became an intern for Diane Sawyer at ABC News. After I graduated, I moved to New York to work there full time. I was suddenly thrust into a life that exceeded my wildest dreams. Just a few years earlier, I had been a kid in foster care with nary a penny to my name, and now I was working for one of the top media companies in the world with some of the highest-paid TV news anchors. I was surrounded by glitz and glamour, but, as an entry-level desk assistant, my personal financial reality stood in sharp contrast.

So I lived paycheck to paycheck in a small Spanish Harlem studio. Every pay stub arrived coupled with the memory of the day after my high school graduation, reminding me that no matter how far I’d come, I was still one curveball away from losing it all. I racked up credit card debt buying groceries and other basic necessities so I could use part of my salary to put into savings, just in case. If I lost my job for whatever reason, I had no parents to go home to or help me while I got back on my feet. I had learned early on that I would always have to be my own backup plan.

By the time I was 27, I had been promoted into a senior leadership role at another company, and my salary reached six figures. In the decade since, however, the industry has contracted and I’ve been laid off twice. Both times I had enough savings to make ends meet. During the periods of unemployment, I did everything from editing books to working as a celebrity branding and social media consultant. No matter how much money I’ve made in full-time jobs since then, the fear of losing it all still lingers.

I don’t bear any ill will toward my foster family for abandoning me. I see the situation as an unfortunate personal twist of fate that taught me an early but important lesson about success and money. The more successful you become and the more money you make, the easier it is to get caught up in and enamored of both, but neither is guaranteed for life. And that is a lesson I will forever be grateful for.

Ken Lenox: Don't overreach!

Wed, 2015-03-25 12:53

Lenox Farms is a ranch of about 1,800 acres located in the Missouri Ozarks. It's been in my family for five generations.

Back in the 1950s and 1960s, it was a typical stock farm, with cattle and hogs — and it made very little money. To boost our income, my father built six charcoal kilns in 1957. Since a majority of the farm was covered in scrub timber, some of our raw materials were free. We sold the raw charcoal to Kingsford Charcoal and the price for the raw material was good enough to help make the farm viable.

In 1961, I graduated from high school and entered the Marine Corps.

I returned home to the farm in 1965 after completing my last tour in Vietnam and began working with my dad on the farm.

In 1967, I took a charcoal consulting job in South America and my wife, Joyce and I spent a year there.

But, by 1969, with our first baby on the way and my dad's health worsening, we moved back and made plans to purchase the farm.

In those early years, we had to borrow from the FHA, the state of Missouri, three different banks and four individuals to get enough money to begin to purchase the farm, build a house, and make a few improvements. It was during this time that I learned many very important financial lessons while managing the kiln and hog operations.

Each kiln burned 45 cords of wood, and had to be refilled twice per month. I had two men on the payroll who helped me fill the kilns and 40 to 60 men cutting and hauling wood for payment by the cord.

I had another man on the payroll who worked with the pigs. The hog market was strong, and we were clearing $8 per pig after all expenses. I decided to build a farrowing house to raise more pigs. The house could handle about 100 sows comfortably in groups of 25 at a time. Each sow had about nine pigs per litter.

Everything was going well so I decided to expand again. I increased the number of sows by 25. After six months, I added another 25 sows. Six months later another 25, and in about two years, I had 200 sows farrowing continuously.

But things were not going smoothly any longer! In one month, the farm hand quit and one of the kiln workers also quit. Taking care of the pigs myself required much of my time, and I was doing more of the physical labor at the kilns. I was also trucking feed in from St. Louis or Springfield once or twice a week. I was a very busy man who was all of a sudden feeling in over his head.

The financial outlook had changed, too. The $8 profit per pig had shrunk to $4.50 because of health issues with the pigs and difficulties in handling the increased numbers. Our litters had dropped from a nine pig-per-sow average to a seven-pig average. The charcoal kilns were hurting too, as we were trying to produce 200 tons of raw charcoal per month, but the average had dropped to 170 tons.

This was not good! I realized I was doing twice as much work for much less money. Obvious to me now is the fact that I had increased the production numbers by too much, too quickly. The most important financial lesson I ever learned was learned the hard way. Don't overreach!

On Lenox Farms today, I run about 300 mother cows and I haven't had a pig around in more than 30 years. The kilns were phased out shortly after the pigs, the cattle operation has thrived on our lush Missouri Ozark grassland as has the Lenox Family for several generations.

Ken Lenox: Don't overreach!

Wed, 2015-03-25 12:53

Lenox Farms is a ranch of about 1,800 acres located in the Missouri Ozarks. It's been in my family for five generations.

Back in the 1950s and 1960s, it was a typical stock farm, with cattle and hogs — and it made very little money. To boost our income, my father built six charcoal kilns in 1957. Since a majority of the farm was covered in scrub timber, some of our raw materials were free. We sold the raw charcoal to Kingsford Charcoal and the price for the raw material was good enough to help make the farm viable.

In 1961, I graduated from high school and entered the Marine Corps.

I returned home to the farm in 1965 after completing my last tour in Vietnam and began working with my dad on the farm.

In 1967, I took a charcoal consulting job in South America and my wife, Joyce and I spent a year there.

But, by 1969, with our first baby on the way and my dad's health worsening, we moved back and made plans to purchase the farm.

In those early years, we had to borrow from the FHA, the state of Missouri, three different banks and four individuals to get enough money to begin to purchase the farm, build a house, and make a few improvements. It was during this time that I learned many very important financial lessons while managing the kiln and hog operations.

Each kiln burned 45 cords of wood, and had to be refilled twice per month. I had two men on the payroll who helped me fill the kilns and 40 to 60 men cutting and hauling wood for payment by the cord.

I had another man on the payroll who worked with the pigs. The hog market was strong, and we were clearing $8 per pig after all expenses. I decided to build a farrowing house to raise more pigs. The house could handle about 100 sows comfortably in groups of 25 at a time. Each sow had about nine pigs per litter.

Everything was going well so I decided to expand again. I increased the number of sows by 25. After six months, I added another 25 sows. Six months later another 25, and in about two years, I had 200 sows farrowing continuously.

But things were not going smoothly any longer! In one month, the farm hand quit and one of the kiln workers also quit. Taking care of the pigs myself required much of my time, and I was doing more of the physical labor at the kilns. I was also trucking feed in from St. Louis or Springfield once or twice a week. I was a very busy man who was all of a sudden feeling in over his head.

The financial outlook had changed, too. The $8 profit per pig had shrunk to $4.50 because of health issues with the pigs and difficulties in handling the increased numbers. Our litters had dropped from a nine pig-per-sow average to a seven-pig average. The charcoal kilns were hurting too, as we were trying to produce 200 tons of raw charcoal per month, but the average had dropped to 170 tons.

This was not good! I realized I was doing twice as much work for much less money. Obvious to me now is the fact that I had increased the production numbers by too much, too quickly. The most important financial lesson I ever learned was learned the hard way. Don't overreach!

On Lenox Farms today, I run about 300 mother cows and I haven't had a pig around in more than 30 years. The kilns were phased out shortly after the pigs, the cattle operation has thrived on our lush Missouri Ozark grassland as has the Lenox Family for several generations.

Slim Thug's real estate plan, dashed by a dalliance

Wed, 2015-03-25 12:49

There’s never much surprise when hearing stories of artists mixing business with pleasure, but it is surprising when too much mixing results in the artist ending up with financial losses.

A few years ago, I was living in a five-bedroom house. Because of the delicate real estate market Houston was facing, I was interested in selling my house to buy another one. While planning this business move, I heard about an opportunity the Obama administration was offering that would assist homeowners with short-sale deals, where the lender settles for a sale price below the amount owed on the mortgage. I jumped on the opportunity and reached out to a real estate agent to assist with the process.

It didn’t take long to find an agent, and over time we became very close. In fact, we became too close and found ourselves at a point where pleasure became more important than business.

The result was hurt feelings, mixed emotions and resentment, and once feelings are involved, business takes a back seat. After the end of our personal relationship, the deadline expired for taking advantage of the short-sale program. I ended up in foreclosure. So not only did I lose out on money from a potential sale, but I ruined my credit as well. I’ve suffered financially from not being able to do business in my own name and probably lost around $200,000 directly and indirectly through my mistake.

Who would have known that sex would lead to losing money? Obviously, I didn’t. But this is one of the many mistakes that led me to talking more about money as part of my work. It’s 2015, and my credit still isn’t the same. Neither is my net worth, but the lesson I learned is certainly priceless.

A Chinese cabby's query leads to Mary Pilon's epiphany

Wed, 2015-03-25 12:48

With the Mandarin language skills of a buffalo, I began chatting with my taxi driver in Shanghai, a polite man with plenty of questions about the United States. It was early 2007, and sitting in a back seat that reeked of stale cigarettes and body odor, I certainly didn’t see a financial epiphany coming. Then, the driver went straight for the jugular.
“How much money do you make?”

Like many Americans, I was happy to talk about macroeconomics, such as the dazzling growth of China’s G.D.P. at the time, the increasing cost of living in Shanghai or how his country’s trade relations were knotted with those of mine. But when it came to the more micro, as in the very digits in my bank account, I felt an urge to jump out of the moving cab. (I was a student at the time, so an honest answer was easily at hand: “None.”)

Since then, a recession has come and gone, and I think of this cab ride often. Many of my 20- and 30-something peers struggle with student-loan debt and high rent, and more than once I’ve erupted in laughter at the idea that I will collect any Social Security in my Betty White years.

Yet when it comes to talking about money as in, our money, there’s a risk that we’re carrying the bad financial discussion habits of our parents with us. If I ask any of my friends their “number,” I’m more likely to receive an estimate of the number of people they’ve slept with than anything related to their credit scores or net worth.

Money can be a reflection of our perceptions of power, self-esteem, personal history, fears and happiness. Or, as a friend recently put it to me, your personal finances can feel like “your grown-up report card.” But whatever its source, this reluctance to talk money hurts us. The topic matters if you want there to be gender equity in pay or economic diversity on college campuses. I’ve often wondered what would happen if an Edward Snowden of human resources sprinkled salary spreadsheets around workplaces.

The app Venmo may be our best shot at transparency. Like PayPal, it offers a handy way to exchange money with friends. But people can also display their transactions Twitter-style as a stream of digital money changing hands — a bizarre and sometimes revealing window into the wallets of those you know.

In a recent episode of the engaging podcast Reply All, a guest spoke of knowing via Venmo that a couple was splitting up, by noticing charges for things like “half a couch” or “half a chandelier.” My own feed recently had transactions for “shenanigans,” “your mistake,” “Girl Scout cookies” and “therapy,” the latter two having a certain poetic similarity. So it’s not salary Snowden, but a start, with emoji for emphasis.

After that cab ride with the driver who popped the money question, a Chinese friend explained to me that, in spite of systemic issues with corruption, some transparency around personal finances remained. Under Communism, it was common for people to know what their peers were making. Some Americans, like those working in government or nonprofits, know the consequences of having their salaries public. Last I checked, the planet hadn’t imploded. And I’m sure if I had thought at the time to ask the cabdriver what he made, he wouldn’t have flinched at responding.

While I’m not calling for every American to pick up a copy of “The Communist Manifesto,” I do find it ironic that a country that for decades has enjoyed more personal wealth than most places in the world is more reluctant to talk about it. For the equivalent of a couple of bucks, I received a window into China’s lesser-discussed pockets of openness. As the personal fortunes of many in China continue to swell, I wonder if their willingness to discuss it will as well. Or if, just as it has adopted KFC and “Friends,” China will import America’s money taboos as well.

Ron Lieber on the lessons of paying for college

Wed, 2015-03-25 12:47

When it came time to apply for college in the fall of 1988, my parents and I didn’t know the first thing about the financial-aid process. But my mother, a veteran personal shopper who has always had a knack for figuring out just who to call to solve consumer mysteries of all sorts, knew someone who knew someone. A guy. The guy.

So we went to see him. He was an associate director of financial aid at Northwestern University, eight miles north of where we lived in Chicago. And on certain weekday afternoons, after his colleagues had gone home, he’d usher a local family into his inner sanctum, collect $45 and pull back the curtain on how the system worked.

We had a lot to learn about which numbers to put where on the federal financial aid form and how to arrange things so that we would appear as needy as possible, without breaking any rules. But the guy taught us what we needed to know, and it worked. My aid from Amherst was generous (for ethical reasons, he wouldn’t have worked with us if I had been appealing to him and his Northwestern colleagues for grant money), and I finished college with a manageable amount of student loan debt.

I didn’t think about him much until recently, when I had cause to reflect on some of the most important things I had learned about money before I became an adult. But that meeting now sticks out for a couple of reasons.

First, the encounter taught me that the grown-up world was filled with complex systems involving money and that they were made to be hacked. Legally, of course. Moreover, if you look hard enough, quite often there’s an expert around somewhere who will explain everything to you for a reasonable price, or even for free. It’s probably not a coincidence that I grew up to be the person whose beat in journalism is beating the system.

But there was something else that was even more important about that meeting: The mere fact that I was in the office with my mother in the first place. Not every parent would have taken a 17-year-old along for that particular encounter. It would have been natural for my mother to try to shield me from worry or complication or shut me out from examining her income and other data that many parents might deem to be none of my business.

Except it was my business — my future, my debt — that was at issue. So of course I should have been in the room, just as parents should be including teenagers in all sorts of discussions about ever-larger amounts of money as they prepare them to make six-figure decisions about college and the five-figure debt they will probably have to take on to graduate.

As for that guy, we had long since forgotten his name. All I remembered was that he had left Northwestern for the Colorado School of Mines. My mother thought that his first name started with the letter R. Northwestern and the Colorado school came up with the same name, but Google was useless for this particular search and New York Times librarians could not locate a listed phone number for him or his immediate family members.

So I sent an email, which the human resources department at the college in Colorado printed out and dropped in the mailbox, care of his last known address. I crossed my fingers, since he had retired in 2009. But a week or so later, Roger Koester sent me an email from his home in Golden, Colo.

He remembered me, though only slightly; his side business had never grown very big, so he hadn’t had that many clients. He was similar to me too, in that he had also taken an interest in money early on. His parents had helped him get a passbook savings account for his allowance, and he had a job shoveling snow.

So was he surprised that I tagged along to his office that day in 1988? Not really. While he didn’t require the students to show up, he was always a little surprised when clients called and asked if it was O.K. to bring their high school students to the meetings. “‘By all means,’ I would say,” he recalled. “If part of this is going to be their investment in their own education, then they sure as hell better know what’s going on.”

Thanks to him, I did learn what was going on. But if my mother hadn’t taken me along, I’m not sure I would have started down the career path of teaching others what’s going on, too.

Olalah Njenga on breaking rules and paying the price

Wed, 2015-03-25 12:46

During the 12 years I’ve owned a marketing strategy company, I have set many guidelines and recommendations for myself and my employees — but few hard rules.

Those few rules are in place as a safeguard. We don’t let total compensation exceed 35 percent of the budget, for instance, lest we not have enough sitting on the side in case of a cash squeeze. We also restrict access to proprietary client data in many instances.

But, this is a story about when I did not follow one of our most important rules. It began when I was wavering on making a firm offer to a job candidate, despite an amazing interview and glowing references. Sensing my indecision, one of my senior employees kept nudging me to make the offer. The pressure made a certain amount of sense, since everyone was picking up slack because of the staff shortage.

The screening process had been odd. Most of the candidates had quirks. One put her dripping water bottle on my desk and left it there, and another didn’t want to start work until 11 a.m. because of her two-hour yoga routine. Then there was one who prattled on about her dog and its diarrhea.

There was only one candidate who seemed good, even if she was a little lacking in the experience and skills we thought we needed. She seemed good because she had so much of what those other candidates lacked.

We were tired, I was tired, so I broke a simple rule: Tie new hires to new revenue coming in the door. In breaking it, I was taking a chance by redirecting a chunk of cash into operating capital and crossing my fingers that we would simply make more money once she arrived.

It turns out that my indecision had been my gut reminding me of the rule, even as most of the rest of me just wanted someone to come in and save me from the mountain of work on my desk.

But the choice did not save me at all.

Once she started, she constantly sought approval at each step, instead of completing a project and then seeking feedback. When we suggested finishing things first, you could see the terror on her face. I and others became her strategy buddies, but it did not help.

The fallout was problematic on two fronts. First, we burned through cash on her compensation without generating new revenue, thanks to the lack of productivity. Also, I was chained to my desk trying to both coach and pick up her slack, which meant I wasn’t finding prospects, selling or doing anything future-focused for the company.

It was a nightmare, and when my husband and son staged an intervention in our kitchen, I knew things were out of control and that I had to part ways with her.

If I had honored the rule and waited until there was new revenue to fund the position, I would have approached this decision with more confidence and more money. I’d like to think that if I face this choice again, I would sit tight and make an offer to a stronger, more qualified candidate, even if it cost more in compensation. Potential is great, but experience is better.

After blowing through tens of thousands of dollars on time, training and supplemental talent, the lesson was obvious: Break your own rules at your own risk. Now that I’ve taken that risk and lost, I’m going to try not to forget exactly what it feels like.

Make more than Gustavo Arellano? You pick up the tab

Wed, 2015-03-25 12:45

“Don’t even bother,” my big-shot executive pal warned me as I reached for my college-era Visa. We hadn’t seen each other since my undergrad days. “You never pay for the meal of someone who’s better off than you.”

“That’s crazy,” I said.

“Who’s the millionaire between us?” he shot back, like God dressing down Job. “Who’s the one who’s been to more business dinners than you’ll ever dream of? Who’s the one who has the black American Express card? Do not pay for this meal.”

“But, but...”

“When I started out,” he explained, “I was invited by the founder of our company for drinks and steak. And I tried to pay for our dinner, which ended up about $200 — and this was in the ’70s, when $200 meant something. He yanked my wallet from me and said, ‘John, I invited you to dinner; that means you’re my guest. And if you’re my guest, that means I’m supposed to take care of you. And if I’m going to take care of you, that means I’ve got your bill.’"

He continued. “And my boss said, ‘What kind of boss would I be — what kind of man would I be — if I made my worker or guest, who I know makes far less money than me, pay for the meal? That’s just a pathetic move that shows I have no empathy. That’s not a good philosophy to live by. So I pay. The good person always offers to pay; and the wealthier of the two always does.’”

“Can we at least go Dutch?” I responded to the executive.

“You’re not listening!” he said. “After that, whenever I went out with people more successful than me, I always judged them by the words of my boss. The people I wanted to do business with or start a friendship with were those who offered to pick up the bill; the shady characters were those who just sat back and waited for someone to pay. And when I started picking up the tab for my friends and on business meals as I became wealthier, everyone’s view of me changed. They knew me now as someone who would take care of business,” whether that meant the meal in front of them or things of more substance.

“How about if I pay this time, and you pay next time?” I said.

“But you don’t pay the bill to build a reputation,” he replied, ignoring my offer. “You pay because it’s the right thing to do. You really don’t know the financial situation of the other person whenever you go out, so just offer; if the person is wealthier than you, he’ll take care of you, no worries. You always take care of those worse off than you — call it Jesus or charity or good business or whatever, but you always do. Now, let me pay the bill.”

He won. Best business lunch I ever had (high-end chilaquiles, by the way). The lesson I learned that day is a mantra I’ve followed ever since and have repeated to everyone I know, not just because it’s the right thing to do, but also because of what my exec pal told me as we left the restaurant:

“Besides, every single meal I have gets reimbursed. So not only does the other person get a free meal, so do I. Isn’t picking up the tab awesome?”

Kenneth Feinberg on placing a value on life

Wed, 2015-03-25 12:41

In the last 30 years, presidents, governors, mayors and others have delegated to me the unenviable task of putting a value to the lives of people who are already dead.

After the 9/11 terrorist attacks, General Motors ignition switch failures, the Boston Marathon bombings, the Virginia Tech shootings and other tragedies, I had to determine what a life was worth and how much compensation should be paid to individual victims and their families.

These assignments require me to make mathematical calculations tied to the size of the available compensation fund, what the victim most likely would have earned over a lifetime but for the tragedy, and additional amounts for pain and suffering and other extraordinary circumstances.

In taking on these tasks, I have come to realize that, whatever your personal wealth, money is a poor substitute for loss. It neither tempers the grief accompanying traumatic death or physical injury nor fills the void left after tragic loss of life. During my administration of the September 11th Victim Compensation Fund, I recall one mother responding to the $3 million she would receive for the death of her son.

“I have a better idea,” she said. “Keep the money and bring my son back.”

I have also become much more fatalistic, which has influenced my own personal financial planning. In effect, I’ve received on-the-job training for managing my own wealth and protecting it for my wife and family. After the 2001 attacks, I sought the advice of a financial planner, having witnessed firsthand what can happen when people don’t have expert financial advice.

The 9/11 fund offered free financial advice to all claimants receiving compensation. Goldman Sachs, JPMorgan Chase and others stood ready to help, but only 78 of 5,300 eligible claimants took advantage of the opportunity. “We don’t need any expert advice,” was the overwhelming response. One Virginia Tech claimant bought 100 pairs of women’s shoes with her compensation, while another took surviving family members to Disney World.

After meeting with the planner, I updated my will, something I had been putting off. Over half the victims on 9/11 did not have one. Given that they were relatively young and in good health with excellent jobs, they seem not to have thought it was necessary. I suddenly found it necessary. I also selected a law firm specializing in trusts and estates that knows exactly how I want my wealth distributed after my death.

It was also important to me to avoid the problems I occasionally confronted after 9/11, when angry siblings, parents and relatives declared war with one another over the victim’s assets and argued over the 9/11 fund compensation. When millions of dollars are suddenly available for distribution, family members, fiancés and same-sex partners sometimes engage in bitter arguments. So I made sure that my wife and three children had a clear understanding of who gets what by providing each of them a detailed memorandum listing all of my assets and an explanation of how my wealth should be distributed after my death.

I also bought substantial additional life insurance. I bought a mix of term- and whole-life insurance, because I wanted short-term protection in the event of my untimely death and a long-term investment vehicle. I was astounded to learn that over half the victims of the Sept. 11 attacks had no life insurance. Were it not for the 9/11 fund, such a grievous oversight would have placed many victims’ families at financial risk.

When it came to my investments, long-term safety and gradual growth suddenly seemed far more important than any short-term profits and quick gains. I wanted to be assured that the bulk of my wealth would be available for my wife, children and grandchildren.

Finally, in managing my individual portfolio, I have become a firm believer in the “cushion” theory of investment. I have saved more of my annual income than many people would consider to be necessary. Hundreds of 9/11 victims failed to set aside sufficient funds to provide for their families, believing that future earnings would be available to make up for any current shortfall. But the terrorist attacks interrupted such plans. Saving today is a hedge against unknown events tomorrow.

Nobody is immune from life’s misfortunes. It need not be a terrorist attack or the acts of the gunmen at Virginia Tech, Newtown, Connecticut or Aurora, Colorado. We all face uncertainty and risk. All the more reason to pause today and carefully plan for tomorrow.

Kenneth Feinberg on placing a value on life

Wed, 2015-03-25 12:41

In the last 30 years, presidents, governors, mayors and others have delegated to me the unenviable task of putting a value to the lives of people who are already dead.

After the 9/11 terrorist attacks, General Motors ignition switch failures, the Boston Marathon bombings, the Virginia Tech shootings and other tragedies, I had to determine what a life was worth and how much compensation should be paid to individual victims and their families.

These assignments require me to make mathematical calculations tied to the size of the available compensation fund, what the victim most likely would have earned over a lifetime but for the tragedy, and additional amounts for pain and suffering and other extraordinary circumstances.

In taking on these tasks, I have come to realize that, whatever your personal wealth, money is a poor substitute for loss. It neither tempers the grief accompanying traumatic death or physical injury nor fills the void left after tragic loss of life. During my administration of the September 11th Victim Compensation Fund, I recall one mother responding to the $3 million she would receive for the death of her son.

“I have a better idea,” she said. “Keep the money and bring my son back.”

I have also become much more fatalistic, which has influenced my own personal financial planning. In effect, I’ve received on-the-job training for managing my own wealth and protecting it for my wife and family. After the 2001 attacks, I sought the advice of a financial planner, having witnessed firsthand what can happen when people don’t have expert financial advice.

The 9/11 fund offered free financial advice to all claimants receiving compensation. Goldman Sachs, JPMorgan Chase and others stood ready to help, but only 78 of 5,300 eligible claimants took advantage of the opportunity. “We don’t need any expert advice,” was the overwhelming response. One Virginia Tech claimant bought 100 pairs of women’s shoes with her compensation, while another took surviving family members to Disney World.

After meeting with the planner, I updated my will, something I had been putting off. Over half the victims on 9/11 did not have one. Given that they were relatively young and in good health with excellent jobs, they seem not to have thought it was necessary. I suddenly found it necessary. I also selected a law firm specializing in trusts and estates that knows exactly how I want my wealth distributed after my death.

It was also important to me to avoid the problems I occasionally confronted after 9/11, when angry siblings, parents and relatives declared war with one another over the victim’s assets and argued over the 9/11 fund compensation. When millions of dollars are suddenly available for distribution, family members, fiancés and same-sex partners sometimes engage in bitter arguments. So I made sure that my wife and three children had a clear understanding of who gets what by providing each of them a detailed memorandum listing all of my assets and an explanation of how my wealth should be distributed after my death.

I also bought substantial additional life insurance. I bought a mix of term- and whole-life insurance, because I wanted short-term protection in the event of my untimely death and a long-term investment vehicle. I was astounded to learn that over half the victims of the Sept. 11 attacks had no life insurance. Were it not for the 9/11 fund, such a grievous oversight would have placed many victims’ families at financial risk.

When it came to my investments, long-term safety and gradual growth suddenly seemed far more important than any short-term profits and quick gains. I wanted to be assured that the bulk of my wealth would be available for my wife, children and grandchildren.

Finally, in managing my individual portfolio, I have become a firm believer in the “cushion” theory of investment. I have saved more of my annual income than many people would consider to be necessary. Hundreds of 9/11 victims failed to set aside sufficient funds to provide for their families, believing that future earnings would be available to make up for any current shortfall. But the terrorist attacks interrupted such plans. Saving today is a hedge against unknown events tomorrow.

Nobody is immune from life’s misfortunes. It need not be a terrorist attack or the acts of the gunmen at Virginia Tech, Newtown, Connecticut or Aurora, Colorado. We all face uncertainty and risk. All the more reason to pause today and carefully plan for tomorrow.

Make more than Gustavo Arellano? You pick up the tab

Wed, 2015-03-25 12:41

“Don’t even bother,” my big-shot executive pal warned me as I reached for my college-era Visa. We hadn’t seen each other since my undergrad days. “You never pay for the meal of someone who’s better off than you.”

“That’s crazy,” I said.

“Who’s the millionaire between us?” he shot back, like God dressing down Job. “Who’s the one who’s been to more business dinners than you’ll ever dream of? Who’s the one who has the black American Express card? Do not pay for this meal.”

“But, but...”

“When I started out,” he explained, “I was invited by the founder of our company for drinks and steak. And I tried to pay for our dinner, which ended up about $200 — and this was in the ’70s, when $200 meant something. He yanked my wallet from me and said, ‘John, I invited you to dinner; that means you’re my guest. And if you’re my guest, that means I’m supposed to take care of you. And if I’m going to take care of you, that means I’ve got your bill.’"

He continued. “And my boss said, ‘What kind of boss would I be — what kind of man would I be — if I made my worker or guest, who I know makes far less money than me, pay for the meal? That’s just a pathetic move that shows I have no empathy. That’s not a good philosophy to live by. So I pay. The good person always offers to pay; and the wealthier of the two always does.’”

“Can we at least go Dutch?” I responded to the executive.

“You’re not listening!” he said. “After that, whenever I went out with people more successful than me, I always judged them by the words of my boss. The people I wanted to do business with or start a friendship with were those who offered to pick up the bill; the shady characters were those who just sat back and waited for someone to pay. And when I started picking up the tab for my friends and on business meals as I became wealthier, everyone’s view of me changed. They knew me now as someone who would take care of business,” whether that meant the meal in front of them or things of more substance.

“How about if I pay this time, and you pay next time?” I said.

“But you don’t pay the bill to build a reputation,” he replied, ignoring my offer. “You pay because it’s the right thing to do. You really don’t know the financial situation of the other person whenever you go out, so just offer; if the person is wealthier than you, he’ll take care of you, no worries. You always take care of those worse off than you — call it Jesus or charity or good business or whatever, but you always do. Now, let me pay the bill.”

He won. Best business lunch I ever had (high-end chilaquiles, by the way). The lesson I learned that day is a mantra I’ve followed ever since and have repeated to everyone I know, not just because it’s the right thing to do, but also because of what my exec pal told me as we left the restaurant:

“Besides, every single meal I have gets reimbursed. So not only does the other person get a free meal, so do I. Isn’t picking up the tab awesome?”

Carl Richards on finding surer footing

Wed, 2015-03-25 12:41

We left the trail head at 1 a.m. and headed for the summit of the Grand Teton. I had made this climb several times, but my friend was still new to mountaineering. This trip was his first attempt at the popular peak. Our goal was to reach the top by sunrise so we had enough time to get back down before afternoon thunderstorms made the trail dangerous.

Reaching the summit involves some hiking, followed by a more technical climb. When the time came to climb, we pulled out our harnesses, ropes and other safety gear. Being the more experienced climber, I headed up the mountain first.

My job was to put in what climbers call protection. This protection would catch the rope in case of a fall. The harder the climb, the more protection climbers add. However, if the climbing is really easy, it’s not unusual to move long distances before adding more protection.

Since I had been up this route so many times, I didn’t spend a lot of time adding protection. In my mind, I had placed the probability of falling at next to zero. Yes, we were up high and we were really exposed, but my experience suggested you would almost have to try to fall while climbing this route.

We reached a resting point and my friend stopped me and demanded to know what I was doing: "Carl, that was irresponsible. You should have put in more protection."

I assured him that we were just fine. I’d been up here a number of times, and the chances that we would fall were minimal.

His next words hit me hard. "Yeah," he said, "but if I did, I’d die."

That climb changed the way I view risk forever. For most of my life, I looked at risk simply as the probability that a catastrophic event would occur. Whether it was climbing, buying a house or starting a business, I carefully analyzed what I believed the chance of failure to be and then moved ahead based on that one factor.

My friend taught me that identifying the probability of something happening is simply the first step. We also need to consider the consequence of what will happen if that risk becomes reality. For instance, the chances that we would fall off the Grand Teton were minimal, but if we did fall, we’d die. That’s a different consideration than if we were to fall and the consequence was skinning a knee.

The same rules apply to our finances. Let’s assume there’s a low risk, maybe 20 percent, that the business I plan to invest in will fail. That seems like a reasonable risk. But if I’m investing my life savings in that business and there is any chance it will fail, that’s a huge thing to consider. We’re talking about a complete change to my life if that 20 percent becomes reality.

The conversation is very different if there is a 20 percent risk the business will fail, but I invest only a small portion of my savings. The business's failure will still hurt, but not in the same way as if I had invested everything.

I see something similar when people talk about making a major purchase, like buying a car. The discussion tends to focus on the best-case situation. Certain assumptions are made, such as, "My income will grow at 5 percent every year, so I can afford the bigger payment on the more expensive car." After all, you assure yourself, the probability that something major will happen to your job is minimal.

But look past the low probability to the real consequence. What if your income doesn’t go up or you lose your job? Could you lose the car, too? Do you have enough savings to tide you over, or people who would help you out?

Until we put the risk in context, we have a difficult time weighing whether we can actually afford to fail. For me, a simple conversation on the side of a mountain changed my perspective and represented a big turning point in my life. Now, I try really hard with every decision I make to consider both the probability and the consequence of failure. What will it take for you to start looking past the risk and weighing the consequences?

Carl Richards on finding surer footing

Wed, 2015-03-25 12:41

We left the trail head at 1 a.m. and headed for the summit of the Grand Teton. I had made this climb several times, but my friend was still new to mountaineering. This trip was his first attempt at the popular peak. Our goal was to reach the top by sunrise so we had enough time to get back down before afternoon thunderstorms made the trail dangerous.

Reaching the summit involves some hiking, followed by a more technical climb. When the time came to climb, we pulled out our harnesses, ropes and other safety gear. Being the more experienced climber, I headed up the mountain first.

My job was to put in what climbers call protection. This protection would catch the rope in case of a fall. The harder the climb, the more protection climbers add. However, if the climbing is really easy, it’s not unusual to move long distances before adding more protection.

Since I had been up this route so many times, I didn’t spend a lot of time adding protection. In my mind, I had placed the probability of falling at next to zero. Yes, we were up high and we were really exposed, but my experience suggested you would almost have to try to fall while climbing this route.

We reached a resting point and my friend stopped me and demanded to know what I was doing: "Carl, that was irresponsible. You should have put in more protection."

I assured him that we were just fine. I’d been up here a number of times, and the chances that we would fall were minimal.

His next words hit me hard. "Yeah," he said, "but if I did, I’d die."

That climb changed the way I view risk forever. For most of my life, I looked at risk simply as the probability that a catastrophic event would occur. Whether it was climbing, buying a house or starting a business, I carefully analyzed what I believed the chance of failure to be and then moved ahead based on that one factor.

My friend taught me that identifying the probability of something happening is simply the first step. We also need to consider the consequence of what will happen if that risk becomes reality. For instance, the chances that we would fall off the Grand Teton were minimal, but if we did fall, we’d die. That’s a different consideration than if we were to fall and the consequence was skinning a knee.

The same rules apply to our finances. Let’s assume there’s a low risk, maybe 20 percent, that the business I plan to invest in will fail. That seems like a reasonable risk. But if I’m investing my life savings in that business and there is any chance it will fail, that’s a huge thing to consider. We’re talking about a complete change to my life if that 20 percent becomes reality.

The conversation is very different if there is a 20 percent risk the business will fail, but I invest only a small portion of my savings. The business's failure will still hurt, but not in the same way as if I had invested everything.

I see something similar when people talk about making a major purchase, like buying a car. The discussion tends to focus on the best-case situation. Certain assumptions are made, such as, "My income will grow at 5 percent every year, so I can afford the bigger payment on the more expensive car." After all, you assure yourself, the probability that something major will happen to your job is minimal.

But look past the low probability to the real consequence. What if your income doesn’t go up or you lose your job? Could you lose the car, too? Do you have enough savings to tide you over, or people who would help you out?

Until we put the risk in context, we have a difficult time weighing whether we can actually afford to fail. For me, a simple conversation on the side of a mountain changed my perspective and represented a big turning point in my life. Now, I try really hard with every decision I make to consider both the probability and the consequence of failure. What will it take for you to start looking past the risk and weighing the consequences?

Ann Carrns splurges on her own American Girls

Wed, 2015-03-25 11:14

After I spent a weekend packing away toys that my children had outgrown, Elizabeth, Felicity, Julie, Kaya, Kirsten and Kit were nestled safely in plastic bins.

If you don’t recognize those names, you probably don’t have a young daughter or granddaughter — or at least not one who plays with dolls. They are all American Girl poppets, and the six of them — plus others like the Bitty Twins, the brand’s dolls for younger girls — consumed an inordinate amount of my family’s toy budget over the past decade.

Actually, “budget” is a bit of a fib, implying that there was some sort of rational limit to what I’d spend on American Girl items. I’d conservatively estimate that the dolls in those containers, and their outfits, furniture, “pets,” hair brushes, books and accessories, are worth $2,500.

That’s a sum larger than our monthly mortgage payment. It’s more than a year of tuition at some community colleges. And that doesn’t include related spending, like hairstyling visits to the doll salon at the American Girl store.

In my defense, the money wasn’t spent in a lump sum on one child, but on two girls, over seven years or so. Santa might bring a doll for Christmas; then Mommy and Daddy would follow up, with a gift of clothing or a related item on the next birthday.

Still, $2,500 is a lot of money. How did that happen? I wanted to delight my girls, yes. I had them relatively late in life, and my parents died before they could do much fussing over their granddaughters. But, as my perceptive husband noted, the dolls were as much about me and my own childhood experience. “You’re the one who wants this stuff,” he observed.

Indeed, I did. When I was a little girl in the 1960s, I would await, with exquisite anticipation, the arrival of the holiday catalog from F.A.O. Schwarz. Leafing through its pages was magical — picture after picture of wonderful toys, with detailed descriptions. One year, I was captivated by a doll named Elise, who had a trunk full of clothes. (Elise was introduced by the renowned Madame Alexander Doll Company in the late 1950s and came in different versions throughout the 1960s into the 1980s, according to the very helpful Pat Burns, a collector who edits the Madame Alexander Doll Club’s magazine.)

Then, on a window-shopping excursion to the F.A.O. store in Boston, I spied Elise and her trunk, posed majestically on a shelf. So close, yet so far!

Elise went on my Christmas list. Then she went on my birthday list — repeatedly, I recall. But, alas, she never arrived as a gift.

Why not? My parents aren’t around to ask, so I can’t say for sure. Perhaps my mother intuited that if I actually had Elise, our F.A.O. outings wouldn’t be so special. Maybe she worried that, as the only girl in my family, I was becoming spoiled; she had grown up poor, while I had toys aplenty and numerous doting relatives. (One night, when I was inconsolable after forgetting my baby doll outside, a platoon of aunts and uncles scoured the neighborhood with flashlights to find her.)

Most likely, Elise was simply too expensive. A collectors book indicates Elise and her trunk of couture (“Elise Takes a Trip”) sold for $65 in 1969. That’s more than 400 inflation-adjusted dollars today — probably beyond the means of my insurance salesman dad and registered nurse mom, especially if they had to spend comparable sums on my two brothers to keep things fair.

Still, I recall that crushing feeling of realizing that you are really, truly not getting something that you so desperately desire. So when my girls began poring over American Girl catalogs, I was ready to splurge. I liked that the dolls offered a veneer of history and had back stories. As a journalist, I had a soft spot for Kit Kittredge, Girl Reporter. We had fun picking doll get-ups that reflected the girls’ interests, like soccer and basketball uniforms.

Yes, several dolls per child was excessive. But even I had limits: A holiday sleigh ($159) and Julie’s Volkswagen Super Beetle ($350), which my girls coveted at one point, seemed over the top.

I wasn’t as extravagant with other things. I have said no, for instance, to Ugg boots, even if the girls wanted to pay with their own money, because they would quickly be outgrown. And when they were old enough to understand how much the doll attire cost, I had them pay for part of the ensembles with their allowance, if it was a non-birthday purchase. (I don’t recall my parents suggesting that.) That tempered their enthusiasm — along with the inevitable process of growing up, and a budding interest in cellphones. My youngest bought her last American Girl outfit when she was 10; she played off and on with the dolls and their horses for about another year. I consider a half-dozen years or so of use a good deal for the money. And maybe their own girls will play with them someday.

Last fall, when the catalog arrived, the girls, now 13 and 11, ignored it. I gazed wistfully at the Pretty City horse carriage ($275, jingle bells included) before tossing the glossy volume in the recycling bin.

Ann Carrns splurges on her own American Girls

Wed, 2015-03-25 11:14

After I spent a weekend packing away toys that my children had outgrown, Elizabeth, Felicity, Julie, Kaya, Kirsten and Kit were nestled safely in plastic bins.

If you don’t recognize those names, you probably don’t have a young daughter or granddaughter — or at least not one who plays with dolls. They are all American Girl poppets, and the six of them — plus others like the Bitty Twins, the brand’s dolls for younger girls — consumed an inordinate amount of my family’s toy budget over the past decade.

Actually, “budget” is a bit of a fib, implying that there was some sort of rational limit to what I’d spend on American Girl items. I’d conservatively estimate that the dolls in those containers, and their outfits, furniture, “pets,” hair brushes, books and accessories, are worth $2,500.

That’s a sum larger than our monthly mortgage payment. It’s more than a year of tuition at some community colleges. And that doesn’t include related spending, like hairstyling visits to the doll salon at the American Girl store.

In my defense, the money wasn’t spent in a lump sum on one child, but on two girls, over seven years or so. Santa might bring a doll for Christmas; then Mommy and Daddy would follow up, with a gift of clothing or a related item on the next birthday.

Still, $2,500 is a lot of money. How did that happen? I wanted to delight my girls, yes. I had them relatively late in life, and my parents died before they could do much fussing over their granddaughters. But, as my perceptive husband noted, the dolls were as much about me and my own childhood experience. “You’re the one who wants this stuff,” he observed.

Indeed, I did. When I was a little girl in the 1960s, I would await, with exquisite anticipation, the arrival of the holiday catalog from F.A.O. Schwarz. Leafing through its pages was magical — picture after picture of wonderful toys, with detailed descriptions. One year, I was captivated by a doll named Elise, who had a trunk full of clothes. (Elise was introduced by the renowned Madame Alexander Doll Company in the late 1950s and came in different versions throughout the 1960s into the 1980s, according to the very helpful Pat Burns, a collector who edits the Madame Alexander Doll Club’s magazine.)

Then, on a window-shopping excursion to the F.A.O. store in Boston, I spied Elise and her trunk, posed majestically on a shelf. So close, yet so far!

Elise went on my Christmas list. Then she went on my birthday list — repeatedly, I recall. But, alas, she never arrived as a gift.

Why not? My parents aren’t around to ask, so I can’t say for sure. Perhaps my mother intuited that if I actually had Elise, our F.A.O. outings wouldn’t be so special. Maybe she worried that, as the only girl in my family, I was becoming spoiled; she had grown up poor, while I had toys aplenty and numerous doting relatives. (One night, when I was inconsolable after forgetting my baby doll outside, a platoon of aunts and uncles scoured the neighborhood with flashlights to find her.)

Most likely, Elise was simply too expensive. A collectors book indicates Elise and her trunk of couture (“Elise Takes a Trip”) sold for $65 in 1969. That’s more than 400 inflation-adjusted dollars today — probably beyond the means of my insurance salesman dad and registered nurse mom, especially if they had to spend comparable sums on my two brothers to keep things fair.

Still, I recall that crushing feeling of realizing that you are really, truly not getting something that you so desperately desire. So when my girls began poring over American Girl catalogs, I was ready to splurge. I liked that the dolls offered a veneer of history and had back stories. As a journalist, I had a soft spot for Kit Kittredge, Girl Reporter. We had fun picking doll get-ups that reflected the girls’ interests, like soccer and basketball uniforms.

Yes, several dolls per child was excessive. But even I had limits: A holiday sleigh ($159) and Julie’s Volkswagen Super Beetle ($350), which my girls coveted at one point, seemed over the top.

I wasn’t as extravagant with other things. I have said no, for instance, to Ugg boots, even if the girls wanted to pay with their own money, because they would quickly be outgrown. And when they were old enough to understand how much the doll attire cost, I had them pay for part of the ensembles with their allowance, if it was a non-birthday purchase. (I don’t recall my parents suggesting that.) That tempered their enthusiasm — along with the inevitable process of growing up, and a budding interest in cellphones. My youngest bought her last American Girl outfit when she was 10; she played off and on with the dolls and their horses for about another year. I consider a half-dozen years or so of use a good deal for the money. And maybe their own girls will play with them someday.

Last fall, when the catalog arrived, the girls, now 13 and 11, ignored it. I gazed wistfully at the Pretty City horse carriage ($275, jingle bells included) before tossing the glossy volume in the recycling bin.

Amy Speace, a singer-songwriter just trying to make do

Wed, 2015-03-25 11:11

I live in East Nashville, Tennessee, a bohemian neighborhood in Music City right across the Cumberland River from downtown that, for many years, has been home to one of the most diverse populations in this city. Bisected by Gallatin Pike, where an über-trendy coffee shop might sit in between a discount liquor store and a check-cashing shop, this area is peppered with quaint cottage homes that only a short time ago were affordable to the artist class.

In the last five years, we've seen an explosion here in development downtown, and that has crept across the river to East Nashville as well, with the smaller homes being bulldozed as quickly built condos and larger homes take their place. The artist class is yielding to the nouveau riche hipster.

A little more than a year ago, the owner of the home I’d been renting for five years gave me a month’s notice to buy the place or find someplace new. I started the process of looking into buying a home of my own for the first time, which was daunting.

I did find a house I could afford and, with the help of a generous friend, we entered into a rent-to-own situation. For that I am extremely grateful. I am a single woman in my mid-40s. I am a musician. I do not have a “day job.” This is my day job. And I make a living at my art, which is a dream fulfilled.

But many of us working-class musicians, painters, artists and writers live a precarious financial existence of our own choosing. When I got together with Neilson Hubbard, a writer and producer, to write a song about a financial turning point, it was easy for us to look around and at ourselves and find our subject matter.

The song "Spent" is available for download on iTunes, or listen to the audio player above for a preview.

SPENT

 

Come take my hand let’s walk to the end of this rainbow

Do you think that we’ll ever know

Where to find all that gold

Once I heard someone singing a dream we could have and hold

Something of our own

A place to call home

We’re head over heels

And in over our heads

We borrow and steal to pay the rent

How we gonna save any money when it’s already spent

Years keep rolling the houses keep falling like dominoes per writer

They’re throwing up condos

The new for the old

It’s not enough to hear your own song on the radio

When your credit is far below

What they need for a loan

We’re head over heels

And in over our heads

We borrow and steal to pay the rent

How we gonna save any money when it’s already spent

Can we stay or do we have to go

Could this be the end of the road

How we gonna save any money

We’re head over heels

And in over our heads

We borrow and steal to pay the rent

How we gonna save any money when it’s already spent

  • Amy Speace/Neilson Hubbard copyright 2015, Speace Monster Music (Ascap), Plastic Bird Music (BMI)

Amy Speace, a singer-songwriter just trying to make do

Wed, 2015-03-25 11:11

I live in East Nashville, Tennessee, a bohemian neighborhood in Music City right across the Cumberland River from downtown that, for many years, has been home to one of the most diverse populations in this city. Bisected by Gallatin Pike, where an über-trendy coffee shop might sit in between a discount liquor store and a check-cashing shop, this area is peppered with quaint cottage homes that only a short time ago were affordable to the artist class.

In the last five years, we've seen an explosion here in development downtown, and that has crept across the river to East Nashville as well, with the smaller homes being bulldozed as quickly built condos and larger homes take their place. The artist class is yielding to the nouveau riche hipster.

A little more than a year ago, the owner of the home I’d been renting for five years gave me a month’s notice to buy the place or find someplace new. I started the process of looking into buying a home of my own for the first time, which was daunting.

I did find a house I could afford and, with the help of a generous friend, we entered into a rent-to-own situation. For that I am extremely grateful. I am a single woman in my mid-40s. I am a musician. I do not have a “day job.” This is my day job. And I make a living at my art, which is a dream fulfilled.

But many of us working-class musicians, painters, artists and writers live a precarious financial existence of our own choosing. When I got together with Neilson Hubbard, a writer and producer, to write a song about a financial turning point, it was easy for us to look around and at ourselves and find our subject matter.

The song "Spent" is available for download on iTunes, or listen to the audio player above for a preview.

SPENT

Come take my hand let’s walk to the end of this rainbow

Do you think that we’ll ever know

Where to find all that gold

Once I heard someone singing a dream we could have and hold

Something of our own

A place to call home

We’re head over heels

And in over our heads

We borrow and steal to pay the rent

How we gonna save any money when it’s already spent

Years keep rolling the houses keep falling like dominoes per writer

They’re throwing up condos

The new for the old

It’s not enough to hear your own song on the radio

When your credit is far below

What they need for a loan

We’re head over heels

And in over our heads

We borrow and steal to pay the rent

How we gonna save any money when it’s already spent

Can we stay or do we have to go

Could this be the end of the road

How we gonna save any money

We’re head over heels

And in over our heads

We borrow and steal to pay the rent

How we gonna save any money when it’s already spent

  • Amy Speace/Neilson Hubbard copyright 2015, Speace Monster Music (Ascap), Plastic Bird Music (BMI)

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