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2013-12-09

Savings: Up in smoke

Our new polymer banknotes: What a drip-off

When one has a fluctuating income, as we do, saving money is difficult, particularly for some misty future, the realities of which remain unpredictable. There's a limit to the logic and applicability of "well, don't spend it in the first place." There is a current debate in Canada over expanding the contribution limit of our national pension plan via payroll deductions or some sort of private, RRSP-like scheme. Personally, I don't believe either course will work in the long term, but the latter, private scheme, known as pooled registered pension plans (PRPP) has a greater chance of not working. It would appear I am not alone in this conclusion.
Wait for it...."Soylent Green is old boomers!"

Even dyed-in-the-wool capitalistic state-haters seem to realize that a mandatory (if not Tory) clip of payrolls is the path of least resistance.  Perhaps the squillons of dollars in unused RRSP contribution room has played a role in this, although "I don't have the money" and "mutual funds are a ripoff" probably factor into this.

Hey, I hear you say, this isn't some stock-picker's ranting blog. What's next, Ayn Rand porn and foaming about fiat money? (Some of you are glad I didn't link up "Ayn Rand porn", aren't you? Me, too.)  How does this factor into boating?

Well, boating runs on money, before, during and after any actual sailing. This morning, I received notice that one of our two tenants is moving on, and that, regretfully, my boat-sharing partner of three years (the stalwart Clive) has foreseeable scheduling issues that disincline him from continuing our partnership (which involved a nice offset to my keeping Valiente in the water instead of in a barn or sold off for next-to-nothing) into 2014. Both situations may, in one way or another, cost us. Both are fixable, but not without effort and hard decisions.

So for the aspiring voyager, even for a frugal one, money and its surplus or absence can be powerful motivators. Of course, we aren't saving while cruising, and any pension debate (assuming any pension) is academic and, I suspect, irrelevant as the decisions necessary to ensure a self-sustaining benefit in the future will not be made by any Canadian government until it's far too late.

So we are thrown inevitably back onto our own resources. What are the habits of saving that are perhaps less obvious to someone trying to get rich enough to leave the middle class for the cruising class? I already buy day-old bread, after all. My wife said we could reduce the cheap red wine budget, but that's just crazy talk for liquids I consider medicinal. Once I encountered a person on an online forum who questioned my (indirect) experience that bad habits could be literally purchased away.
If money were that much of a motivator, nobody would smoke cigarettes anymore either. i'm in the you'd have to pay me more than 20$ club.

I have to disagree. I have evidence to the contrary.

My father's dead now, but not from lung cancer or heart disease. He smoked a pack and a half of cigarettes daily from the '40s to the '70s (all the cool kids were doing it during WWII, when death from torpedo was a more pressing concern). At some point in the mid-'70s, he got tired of that particular dorsal primate, and quit cold turkey. His incentivizing tactic was to put away, every day, the money he would have spent had he continued to smoke. For argument's sake, let's say it was seven dollars and fifty cents per day (Canadian cigarettes are now and were then irresistible to the tax men).

Long story short, he did this for about 40 years. When cigarettes went up in price, he would throw a greater amount of money in a drawer. He'd bank it every few months in a separate account.

The total saved by the time of his death, and adjusted for inflation, was nearly $110,000. That's a nice cruising kitty by any measure, I think.

With this bundle, he bought three cars...in cash (which is inspirational to car salespeople, apparently) and paid off a house, which quadrupled in value while he owned it. He left a nice mortgage-erasing packet to myself and my sister, although frankly I would have preferred him to have lived longer to be my son's grandfather.

I feel it's important to stress that he never made more than $35,000/year in his life. Not rich, but then even bums and the homeless can afford to smoke. This is the societal assumption: Smoking may be nasty, bad or just defiant, but the cost of actually burning the things has rarely been seen as particularly expensive. Even though, like certain industrial and agricultural subsidies, it clearly is.

So even the indigent can usually afford to smoke, not that I imagine that's much of a comfort. While I realize that access to fresh food can be a big obstacle to the poor, I similarly reject the notion that you can ever be too poor to eat properly, by which I mean nutritiously and without eating a load of over-processed crap. I'm not naive; I realize the entire food industry is offering everyone they can sucker into taking up the crack pipe of salt, sugar and fat, but that industry doesn't have to use your bashed-in pancreas or damaged kidneys inside your lard-encased torso to get through the world.

You, dear reader, do. Eating adequately is probably as much of an educational problem as it is a money problem. And if a money problem involves savings (including savings directed to a boat habit), then maybe take up virtual smoking, so you can quit cold turkey on day one and throw the money (would that be one or two Starbuck's coffees?) into a drawer.  Really, the amount isn't so important, and the effort is token. But time, plus token effort, gives one a pile of tokens.

It doesn't have to be virtual smoking: it could be virtual dining out. The restaurants around my house are stuffed with 20-something urban hipsters of the most cliched accessorization drinking $14 cocktails and $5 cups of artisanal coffees. We could live like them, but we couldn't save for a damn thing.

As a sailor, my mustache is non-ironic. It's there to catch the nose-weep from squinting into a nor'easter.

Saving for damn things, like cruising, could mean cutting the cable bill to zero and getting a library card...we get about 2/3rds of our DVDs as library borrowings. It could be switching off the lights or unplugging the phantom-power devices.  It could involve keeping shelving in a cool corner to stock up on sale items from the grocery store. If putting away ten bucks for every day you don't eat McDogfood's or snarf a sack of chips is the incentive, get on that. The monetary effects, when factored over time, can be dramatic...like really dramatic. And, of course, if you aren't a smoking salty sugar gravy gobbler, you'll have that time to pay for more than an XXL coffin.

What the results of smoking salty sugar gravy gobbling...and crack use... may resemble.
It's down to individual choice, something people tend to not want to hear, particularly during credit- and waistline-maxing season. It's become clear to me that the government is going to solve its underfunding of the old-age pension scam by encouraging people to eat themselves to death, ensuring that said citizens never claim it.

Cynical, perhaps, but logically, it's the path of least resistance, if unlikely to ever be stated so explicitly. Also logical is the making for oneself an illusion inspirational enough to encourage reality-based savings. Fair winds to that.

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