As I was driving down the now-heavily trafficked streets of New Smyrna Beach, I could not help but turn on the radio to aleve me of the stress of 10 cars in front of me at the light when I heard the ostentatious commentary of our local neighbors yapping about the gift Sean ‘P.Diddy’ Combs gave his son for his 16th birthday. It sounded like the case of the broke-a-naires once again not understanding economics.
Yet, in their infinite wisdom, they proceeded to lecture Combs on what he should have done with his $360,000: “He is not being financially sound giving his 16 year old son a $360,000 car...” “He is just a show off..."
The commentary even spilled into his lack of leadership ability in the area of finance…WOW!
To bring everyone up to speed: Sean Combs is a media mogul in the Hip-Hop Industry who, according to Forbes, has a net worth over 386 million: that is $386,000,000. The car cost $360,000. That is exactly .00097% of his net worth.
Furthermore, if they knew anything about that man, they would recognize he is somewhat of a sensational marketing exploiter. He will most likely be "dropping" an album or parading a new line of something in the fashion industry using free publicity.
When anyone can purchase a $360,000 car and not put a dent in any parts of their portfolio…I’ll listen.
As irresponsible as giving a 16-year-old a $360,000, Maybach no less, may sound, we are not talking parenting here; we are discussing “brokanomics” mentality: Someone who unknowingly participates in broke-a-naire behavior.
The individuals on the radio would most likely fit the bill of a brokanaire. They would mostly likely walk into a Wal-Mart and purchase a 50-inch flat screen for $789 and only make $1,500 a month: which equates to 53% of their monthly income.
Who is being irresponsible and not financially sound?
Let’s see how many of us are broke-a-naires!
If you purchase a brand new car in the year that it was built and would never dream of purchasing the same model car which is two to four years older…sounds like a broke-a-naire.
Concept: No one knows it is the 2010 model, but you and the car dealer! Your next door neighbor doesn’t care and if they do, close your garage door or move. You lose 10k when you drive off the lot.
Seriously folks, my 2005 Honda Odyssey looks just as good as the 2009 in the year it was purchased! No one knew but me…and now you. My car is now 5 years old to date and still looks brand new.
You bought a $600 I-phone , $400 Palm pilot, and/or $500 Blackberry for your 10-year-old, 12-year-old, 16-year-old, or your college kid! Sounds like a broke-a-naire.
You bought the $600 phones, but have no college fund for your kid. Sounds like a broke-a-naire
You bought the $600 phones but have no retirement plan for yoursel. Waiting on Social Securit, haven't you head, may not be there! Sounds like a broke-a-naire.
You bought the $600 phones and now can’t afford the $175 a month bill, because you have to pay for the $30 a month data plan. Sounds like a broke-a-naire.
You bought the $600 phone to get it at $249 with a two-year contract, which will cost you approximately $2,160 over the life of one contract: $59month plus the $30 data plan and the taxes. And you still don’t have a retirement plan. Sounds like a broke-a-naire.
You make the excuse that my child deserves the best, yet, you do not prepare for his or her future. Sounds like a broke-a-naire.
Concept: are you kidding me?! They're if the kiddies need to call you to let you know where they are. Tracfone works wonders. Besides don’t you know where your kids are? Then that’s an issue a $600 phone can’t solve.
In the 80s, I never had a cell phone, my parents never lost me -- no not once -- and I turned out alright, I think!
My 15-year-old son and my 10-year-old girls agree with me. How interesting.
Your monthly income is $3,000 before taxes and you spend $600 on car payments, $165 on insurance $140 on a family share cell phone plan, you eat out every week, McDonald’s is your kids' favorite spot And you still don’t have a retirement plan or an emergency funnd. Sounds like a broke-a-naire.
Concept: You are spending 30% of your income on things, which depreciates your net worth, which cannot be passed down to your children when you die. You are encouraging the youth of tomorrow to be frivolous spenders and never be ready for tomorrow. Take that same 30% and start a college fund, retirement plan…get rid of the cell phone. Buy a used car. Get an emergency fund.
You make $400 week and you were one of the first on line to purchase the Xbox 360 that cost $299 for your son that one Christmas. Sounds like a broke-a-naire.
Concept: That is more than 50% of your income. Enough said. When have members of our society become such ravenous materialistic wolves. When have ‘stuff’ become more important than thinking straight.
As I have mentioned in a previous blog, I’m old fashioned and more conservative than most, yet not a prude. I do believe in the occasional indulgences. We have television, computers, Xboxes, I even cater to my 10-year-old old fashionista.
However, these things should never equate to more than 5% of your monthly income if your retirement is not funded, your kids have no college funding, and you cry when you sleep at night because of the bills on the kitchen table. We should not waste money just to keep up with the Jones. Heck who are those Joneses anyway? Where do they live? Most likely, they too, are Broke-a-naires.
Last but not least, the worst story of all. I was manning a table at an event for a friend of mine and we were selling tapes of the speaker for $8. A mature lady in her 60s wandered by the table and wanted to purchase the tapes, and stated “I don’t have enough money…I didn’t get paid yet…” How sad! When you are in your 60s and you do not have $8 to purchase a tape and your'e still working, is the sure sign that brokanomics may have entered and never left.
Please, before you criticize someone for spending .00097% of their income, please consider your own percentage markers.
Take care and God Bless!