My Embarrassing Confession: I’m a Deadbeat

Consumers are responsible for about two-thirds of the U.S. economy, so the more we spend, the better for everyone. But I’ve got to tell you: I’m not doing my part. Not even close.

America provides the engine that powers the world’s economy. And consumers — you, me and our fellow Americans — are responsible for two-thirds of that economy. So in a way, it’s our duty as responsible world citizens to go out and buy stuff; to be the best consumers we can be.

Which makes the following hard to admit: I’m a terrible consumer. And my lack of enthusiastic consumption could be hurting my neighbors, my fellow citizens and ultimately, the entire world.

Exactly how am I horrible spender? Let’s count the ways.

1. I’ve never bought a new car

As of Oct. 1, American car manufacturers had sold nearly 6 million new cars so far this year. Last year, the big three automakers made a combined profit of more than $13 billion.

How much did I contribute to the industry that employs so many Americans? Not a darn thing. I’m 58 years old, have always earned a decent living, and have never owned a new car. So if it were left up to people like me, there wouldn’t be a U.S. auto industry.

It gets worse. Not only did I remain on the sidelines as America’s automotive industry rebounded from the recent recession, I profited from it. Check out my online portfolio and you’ll note I bought 500 shares of Ford in 2011 at $10.49. It’s now about $7 a share higher, so I’ve made close to 70 percent on my investment.

2. I don’t watch commercials

This is an especially embarrassing admission, because I’ve made my living in television news for more than 20 years. No advertising, no TV news.

I don’t watch commercials for two reasons. The first is because their unwelcome interruption is like fingernails on a blackboard. The second is because they work.

Watch enough commercials and next thing you know you’ll be acting as if you actually believe a new car will make you cool, you shouldn’t leave home without a credit card, and using the right toothpaste will get you into bed with fashion models.

Instead of exposing myself to annoying brainwashing, I either record shows and skip commercials, or channel surf to avoid them.

3. I buy generics

Speaking of commercials, if you don’t think they work, open your medicine cabinet and see if it contains a name-brand pain reliever. If it does, something convinced you to pay for a label when you could have had the identical product in generic form for 30 percent to 50 percent less.

If you do what the commercials advise and pay more for a name, you’re injecting more money into the American economy. I just can’t convince myself to do it.

4. I don’t pay interest on credit cards, or practically anything else

According to CNNMoney, JPMorgan Chase made about $19 billion in profit last year. That’s about $365 million every week. Wells Fargo made about $16 billion. Both banks employ hundreds of thousands of Americans, both make it easy to consume by offering easy credit, and both make billions by collecting interest.

I also own the stocks of these companies. Since purchasing them in 2009, I’m up about 85 percent in JPMorgan and nearly 150 percent in Wells Fargo.

But am I helping these banking behemoths make hundreds of millions weekly by being a borrower? No. While I use credit cards, it’s been 30 years since I carried a balance on one.

Not only that, for more than 20 years, I’ve been advising my readers and viewers to use nonprofit credit unions instead of banks.

5. I buy stuff used

Buying used may help save the planet and your retirement fund, but it won’t save the job of someone who manufactures, markets, transports or retails new stuff.

I try to buy whatever I can pre-owned, from cars to clothes. My house was built in 1965, my boat in 1985 and my car in 2009. Sure, I’d be many thousands poorer if I bought this stuff new, but buying used means not pulling my weight as a good consumer should.

6. I don’t eat fast food

Compared with the big banks, McDonald’s makes chump change. They only brought $5 billion to their bottom line last year. But if it were up to me, they’d be out of business and their 762,000 employees out of work.

Despite the many commercials assuring me all kinds of fast food is both a great value and a great meal, I don’t believe either is remotely true.

7. I pay no attention to labels

Many American companies want to charge more for a product because a famous person’s name is attached to it. Many others, from Harley-Davidson to Apple, make billions by creating cachet around their brands.

If there’s anything more ridiculous than seeking status in a name, I can’t imagine what it is. I don’t care which phone my friends are carrying in the pocket of their designer jeans. I buy on price and features, not brand.

The biggest stock winner I’ve ever owned is Apple. A $1,700 investment in my IRA made about 11 years ago is now worth more than $100,000. I did buy a refurbished Apple computer a few years back. I’ve also owned an iPhone, but I recently replaced it with a phone that’s both better and less expensive.

8. I rarely go to the movies or professional sports

The American sports and entertainment industries are the envy of the world. There’s no other country where a guy making $15 an hour will happily surrender big bucks so an actor or athlete can make millions.

Yet if it were up to me, these people — along with the millionaires and billionaires behind the scenes — wouldn’t be nearly as rich.

While I’ve gone to movie theaters and pro stadiums, it’s rare. I’ve found that amateur athletes and actors can be just as entertaining, and waiting a few months to rent a movie isn’t just a less expensive way to watch, it’s far more comfortable than a theater.

The bottom line is your bottom line

Unfortunately, while spending as much as possible is the shortest path to a healthy world economy, it’s also the shortest path to the poorhouse. So while I honestly want the American economy to be the engine, and envy, of the planet, I’m not willing to sacrifice my future to make it happen.

What about you? What do you do that makes you a lousy consumer, but savvy saver? Leave a comment below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

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  • marketfog

    I agree with most of your frugal tips. I do, however, disagree with a few of your comments. I buy new cars because I have never had a good used car. I usually drive my cars well over 100K miles. My latest used car was a 2006 Camry with low miles. The unintended acceleration problem was very real. However, the problem wasn’t the accelerator but the OD lockup which would lock up in lower gears. I traded it at 55K miles. Sometimes going to movies is better than blue ray. e.g. Chicago. The movie was better than the play on Broadway, I saw both. The sound, in a state of the art theater, is incredible. You will never get it on the best home theater TV. Besides, going to the theater is a relatively inexpensive change of pace. I never go to professional sports. I prefer HS sports. The kids may not be as skilled, but they give it their all, 100% of the time.

    • N_Jessen

      That’s too bad. I’ve had a good used car three times, one of which was “certified”/with warranty and is still going strong after 160K. I’ve only bought one new, and found that on average it’s better to take the chance and make the repairs than pay the depreciation on new cars. ‘At least’ until you’re financially well-established and can either pay cash or get great financing. Agreed on the rest though. Going out for a movie is an occasional treat, and it’s certainly better than what I’ve known others to do for an escape, like gamble their money away at the slot machines.

      • marketfog

        I pay cash.

  • 3rdjerseyman

    I sold cars for 30 years. Never buy a new car. If you want a new car, lease it. There are many intangibles people enjoy about having a new car, and it is very foolish to fail to “smell the roses.” If for you, the roses have a new car smell, go ahead, but don’t buy! If you want to buy, your best bet is that two or three year old off lease car with the manufacturer’s certified warranty. That’s your “buy and hold” play right there.

    Luxury cars depreciate faster than regular cars, so you can buy that 50 thousand dollar car for the same money when it’s a few years old that you put into that new ordinary commuter box.
    The most important thing is NOT to fall for the Best Deal! I know that might sound self serving coming from the car salesman, but the most important thing is the RIGHT car.
    You lose far more money if you come back to the market sooner than you should because you got a great deal on the wrong car than if you paid a fair profit on the right car. Generally, the very best ‘deals” are on the less attractive vehicles. Be sure that you like the car, the color, the equipment and that it will serve your purposes for the long run. Your loss on depreciation in trading too soon will outweigh any possible dealer discount or incentive.

    I either lease a car when it has all the various promotions “stacked,” then I buy it at the end of the lease, or I buy that three year old car. In either case my plan is to drive it until the wheels fall off. My cars will usually have well over 200 thousand miles when we part company. Modern cars can easily do that if maintained and not abused. The out years are when your per-mile cost plummets.

    But, to repeat my main point, as in getting married or buying a house, you’d better pick the right one, because a quick turnover can be brutally expensive.
    We’ve had MB, Volvo, SAAB, BMW, Cadillac, Jaguar and yes, Peugeot! In almost every case, we received almost flawless service from the vehicles. Raising three kids, we experienced multiple wrecks, but as they were never driving a consumer magazine approved econo box, no one was ever hurt.
    I will close by telling you that the safety ratings are very misleading. In a collision with another vehicle, bigger is always better. The laws of physics have not been repealed. Mass times velocity rules. Put your young drivers in big, old cars before you let them get cheap little cars. A 20 year old, full sized Benz, Volvo, Buick will tear a new Hyundai, Honda or Toyota in half.

    • N_Jessen

      Agreed, although the trend is toward lighter cars with improved structural engineering (and sometimes crash avoidance technology), so lots of people will be on the receiving end of those heavy old cars until they finally fade out of existence. Maybe for now they’re right for drivers just starting out, but the testing needs to be continually improved to ensure safety is maximized on modern vehicles.

      • 3rdjerseyman

        I’d point out that American families have transferre their loyalty from “cars” to SUVs and “crossovers.” If you look at the sales figures, you’ll see that while the Prius and various gas driven small cars are doing well, the action remains hottest among pick-ups and crossovers. In fact, the average horsepower and weight has been climbing for years. Here in NJ, regular is getting close to breaking below 3.00 per gallon. With the success of fracking and deep offshore drilling, we may be seeing oil plummet. Given a choice, most people opt for bigger and more powerful vehicles. I think my observations on small car crash physics will remain true for the duration. Next to their Priuses and Teslas, all the 1% keep the SClasse, 7 series and Bentley they actually drive- in NYC the Escalade is the vehicle of choice for 1% transport.

        • N_Jessen

          That may be, but then some luxury lines are hybridizing and even some SUVs are getting lighter. And they may well continue doing so if automakers are to meet new fuel economy goals, and if the U.S. ever adopts a fossil carbon tax & rebate system (unlikely in the near-term, but you never know).

          • 3rdjerseyman

            I guess I’m a contrarian when it comes to energy pricing. I think the government has no business interfering in the energy market. Their push for small cars has killed thousands and maimed exponentially more. It also destroyed Detroit, enriched the Japanese and Koreans at the expense of American workers and thwarted the natural evolution of domestic transportation design. Ethanol is a terrible boondoggle. MTB was flat out poisonous and the subsidies for electric cars are a transfer of wealth from the middle class to the wealthy. Cars with 900 pound battery packs aren’t going to be lighter. The public, if free to choose, picks bigger, roomier and more powerful. The upper class certainly does. Look at the vehicles in the Congressional garage!
            The US has reduced oil use and carbon emissions faster than EUrope with all its mandates (look it up). The tuth is, energy is life, the more energy available, the more abundant life is for all. Where would this economy be without the recent fracking and deep drilling successes?

          • N_Jessen

            The question is how much of that usage reduction was an after-effect of the “great recession”. And of course, at least for now carbon emissions have dropped partly because of ultra-cheap natural gas (something that may not be so permanent) displacing some coal. Yet we still have much higher per-capita emissions than Asia despite off-shoring a lot of our manufacturing to them.

            I’d agree that corn ethanol is largely a boondoggle. Beyond a low-proportion blend aimed at reducing smog, the net returns are too modest vs. the costs. Battery packs are advancing pretty rapidly in their energy density, so I wouldn’t write off the technology simply because it’s currently more established among the relatively wealthy (the “early adopters”). Economies of scale are required to really bring down costs and make rebates a more equal opportunity.

            Americans also had their periods of buying lighter vehicles during times of high gas prices (in part due to more guzzling in Asia), driving those Asian vehicle sales perhaps with the help of Detroit snoozing at the switch. But the regs are already in place, so it’ll be interesting to see how things progress, and whether the best efficiency technologies become widely accessible without any other market-based mechanisms. Meanwhile, energy supplies will still need to expand just for population growth and rising global demand.

          • 3rdjerseyman

            The downward trend in emissions, fuel usage and power inputs per unit of output started in the 70’s and is especially noteworthy in light of the huge population increase and the expansion of home sizes and car registrations.
            I am not writing off any technological developments. I am merely decrying the distortions introduced by backward looking and ill-informed governmental intrusions. The rent-seekers and politically connected distort the incentive granting process as is obvious in Mr. Obama’s green jobs fiasco.
            Asian vehicles were given a crucial boost by fuel economy standards and a laughable import tax of 2.5%. Meanwhile, for just the latest example, a Jeep f.o.b. Detroit of 29,995 retails in China at about 90k! Sweden, the source of a million Volvos and SAABs, triple the price of the much desired Corvettes and Mustangs.

            Nuclear energy is the obvious and practical solution for those seeking carbon freedom, yet we abandoned that science we so famously pioneered.
            As I believe in the logic of evolution, so I see the obviousness of the logic of the market. As we watch Obamacare unravel, it should be obvious that the best and the brightest are not as smart as they have been selected and taught to think they are. All of us are smarter than any of us.
            Returning to the auto industry. I spent 30 years in the business- retail and factory. I am certain that the governments push for small, light, fuel efficient and dangerous cars is what propelled the wholly irrational SUV craze.
            It came out today, that public transportation and carpooling have both declined. This after decades of subsidies, exhortation and coercion in the form of deliberate government anti-car policy, yet work and family patterns, residential expenses and employer demands have made all the diamond lanes, free parking for car pools and subsidized bus and light rail an exercise in futility.
            If we wanted to reduce pollution and improve gas mileage immediately, we’d embark on a national program of traffic easing- remove choke points, built roads, bridges and tunnels and get traffic moving at the speeds that completely burn fuel and increase mileage.
            If immigration reform wins, we’ll see a rapid increase of 30 to 50 millions in our population. By 2050 we should be a nation of up to half a billion. Everyone of them will want a car.

          • N_Jessen

            Without any impetus for efficiency and pollution control, that could be a problem wherever they ended up. And although there were emission declines from the 70’s (whether due to the Clean Air Act, the oil crisis, other market forces, or all three), those reductions certainly leveled off (or reversed during periods of economic growth) past ~1980, at least for fossil CO2. Which of course spiked elsewhere with globalization and the shifting nature of Western GDP. But there is clearly more than one factor at work.

            Frankly I don’t know who to believe anymore on nuclear (regarding it’s real life-cycle expense), but maybe newer technologies hold promise. I would agree, though, that government being directly involved in energy tech is hardly ideal (although it apparently played a role in bearing some of the risk of early fracking projects). Whether or not one agrees with the merits of macro-level market mechanisms for emissions reduction, at least they needn’t pick players via direct assistance. Maybe why Bush Sr. went with a sort of cap & trade system for smog and acid rain control.

            And I fully agree with improving traffic engineering, along with better city planning for those using alternative forms of transit. Maximizing efficiency and convenience is key either way.

          • 3rdjerseyman

            I’ll close with the observation that cap and trade is completely unacceptable. It hurts those least able to afford it and depends on a static view of tech and science.
            We should all be humbled by the spectacle of Obamacare. let us leave government to screwing up military contracting and let the profit motive take care of economics and innovation. Why do you say the government was in on fracking. I don’t see that in the record. It was an elederly gentleman in tTexas- he just passed- whose company developed the technique.

          • N_Jessen

            I’ll close with the suggestion that not all cap & trade systems are alike, but something simpler and less prone to abuse would be preferable if that’s what it comes down to, and depending on whether one thinks it’s necessary to accelerate new tech implementation. Something revenue-neutral that returns rebates to those who can least afford increases. I’ll withhold final judgment on the ACA until it’s fully rolled out. Not that it was the best approach to moderating healthcare costs to begin with, but we are dealing with multiple interested parties. As for fracking, initial development and full-on implementation might be two different things. The government apparently contributed tens of millions for research and billions in tax breaks for those willing to invest in production when profitability was dubious. According to geologist Dan Steward, the gas fracking pioneers at Mitchell Energy also got some support. G’night.

  • arobinson

    Yes, isn’t that a set of circumstances. Everything from renting to employment is now judge by our credit rating and/or history. Those who do not have decent credit are most likely those living in areas that are not as lucrative as they may wish. Zip coding has further served to distinguish this class and further serves as an indicator of social mobility or those to be considered for social mobility.

  • Sandy

    I love this article! This guy sounds just like me!

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