Divorce, debt, and diatribe

It’s that time of the month where I sit down to pay the bills and track my budget and figure out financially where I am going in the coming year. Before my divorce, I was very frugal. No credit card balances to speak of. No outstanding debts except a mortgage. It was save, save, save. Emergency fund. Savings for college for the kids. Check. Savings for a beach house. Yep, it’s what the family wanted. Savings for retirement. Planned to work to age 52. Everything was on track.

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Then it came all crashing down. I managed to keep my retirement account untouched in our amicable, negotiated settlement. But I managed to pick up massive debt. Rent became a new mortgage. Child support became half of my paycheck and yet I had the kids half of the time. A personal loan to cover expenses incurred during my divorce. Lost significant savings. My doldrums that I encountered during the divorce were handled by some extravagant spending on trips, on stuff, on junk. No control. No problem, just charge it. New furniture for a house. Buy whatever the kids wanted. LEGO’s and horse things, fish and birds and guinea pigs. Exercise equipment to better myself. Books to read, learn to play the guitar, eat better food, drink better wine. Bourbon and scotch. Hobbies. I literally found myself in debt.

Now, as I stand on the precipice of retirement, I find myself still digging myself our of that debt. Granted, I am probably better off than most Americans. A good paying job. A 401k and pension for retirement. A roof over my head. Not living paycheck to paycheck. Yet there it is. DEBT.

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So here I am this Sunday morning after Thanksgiving, paying my bills. No, I am not thankful for that debt. I am thankful that I can manage it. Started looking at the interest rates that are charged for monthly balances. My Chase Freedom Card carries an interest rate of 13.99%. They calculate it by taking the prime rate and then add their costs on top. The Wall Street Journal carries the prime rate, which is currently listed at 5.25%. From the internet, I learned that the prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate that banks use to lend to one another. Also, it is stated that the FOMC (Federal Open Market Committee, which is comprised of the 12 Federal Reserve Banks) has voted to lower the. target range for the fed funds rate to 2.00% – 2.25%.

So JP Morgan Chase charges me 8.74% to use their money when I charge something to my credit card and then carry a balance. Wow! My local bank pays me 0.10% for what I save in my savings account, and less for my checking account. It’s much worse when I look at my American Express Delta SkyMiles card. There the rate is 21.99%. A whopping 16.74% to use their money. It was my Amex card that just started me on this rant this morning. My annual fee was being increased to $99 a year. That’s $99 just to carry the card, get some frequent flyer miles if I use it. All of this for the luxury to not pay to travel with one bag on an airline. Not really sure if it is worth. I think that I can leave home without it.

Why so much for using their money? Well, the are a business. They need to make a profit. They have millions of credit cards in use. They get paid every time I use their card. And if I carry a balance, they get paid again by charging me interest. By my math, that is between 8 and 16%. Sweet if you can get it for your savings account. Some people pay them off every month. Some do not. Some incur large debts and then just don’t pay them. Guess that means that those of us who honor our debts are also paying for theirs. Why should I pay for someone else? I have my family to keep.

As a business, they have shareholders, including myself. I like my stock price to go up, my dividends to increase. After all, I need my 401k to cover me when I retire. They have employees who have families just like me. They have CEO’s who make ridiculously large salaries. I am not picking on Jamie Dimon; he certainly works hard for his money and has added value to his company. JP Morgan made $31,500,000,000 profit in 2018. Jamie Dimon got a 5% raise in 2018, and made a salary of $31,000,000. Now if you were like me, my raise was less than 2%. No bonus, no stocks, no performance-based variable incentive compensation. Jamie’s salary was a base salary of $1.5 million and a “performance-based variable incentive compensation” of $29.5 million, split as $5 million of that in cash, and $24.5 million in the form of “performance share units”, a fancy word for extra shares of stock. I could not find how much Jamie personally donated to charity in 2018, but I know JP Morgan Chase donated millions.

I don’t necessarily begrudge Mr Dimon for his money. There are others who do, like Elizabeth Warren. She is running for President. She has a plan, and as near as I can tell, a tax for everything. She wants to expand government into everything. In 2018, Warren made about $325,000 from book sales in addition to her $175,000 salary from the Senate. Her husband was paid about $400,000 from Harvard. Explains why it is so expensive to go to college. The couple paid about $46,000 last year for a solar energy installation on their home in Massachusetts, and received about $15,000 in tax credits, and they donated more than $50,000 to charity. All told, the Warren’s paid more than $200,000 in taxes on about $900,000 in income last year, based on their tax returns. By my math, they made about $100,000 on investment income. Don’t worry, Joe Biden did better. Can’t say that about Donald Trump. Yet we know that he took no salary and did not release his tax returns.

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So as it is now 24 shopping days before Christmas, it’s time to go shopping. No iPhone 11 for me or the kids, the iPhone 6 works just fine. No trip to someplace warm for the holidays. It’s currently 22 and with snow on the ground. No Black Friday. No Cyber Monday for me. Just gather up my kids lists and then off we go. Soon we will have another Star Wars movie in the theaters. Then it will be tax time and another election.

Subject

As I sit here in the living room this evening, I am trying to figure out what to write. Usually, there are several subjects during the day that pop into my head. Some cause me to think longer and harder than others. It’s the one that I ponder the most that writes itself. That is the one that becomes the subject matter that I write about in the evening. I was setting here this evening, alternating between the TV, my beer and things on my iPad. Lots going on today so there are many topics to write about.

Then my solitude is interrupted by the kids. That quickly escalates into an argument about ice cream sundaes. Something that is a special treat has now become an everyday treat in the mind of my son. So as the sucker that I am, I run out and get them. Daughter has a friend from school over for a sleepover. Right now I am actually quite angry at both of them for different reasons.

Upon my return, son knows he is in the doghouse but he just cannot comprehend why and his typical response is “I’m sorry”. However, as I try to explain to him again, he has never comprehended the concept of an apology and that with it comes the idea that he will not do that which he is apologizing for again. Literally it can be a matter of minutes and he is back at it. We have this conversation over and over and over. He just does not comprehend the idea.

Disclaimer. Both of my kids have been diagnosed and are taking medicine for ADHD. They are not in the zombie state that one often thinks of with ADHD medicines. Just the opposite. And to those who suggest that it is overdiagnosed, and the medicines are over prescribed. There is a clear difference between both of them with and without the medicine. Over the years we have tried everything. The symptoms in a boy can and are often very different in a girl.

I often wonder if it is me. Like me, both have anger issues. I’ve tried over the years to work on it, and have been somewhat successful, especially around the kids. Not perfect but getting better as they get older. Sometimes my actions remind me of my life in growing up. Then I wonder if it’s a product of the divorce. As I am the product of divorce, I do my best to be there, treat them equal, and try to talk to them every day. Conversation was never a big thing in my household.

They are very different. Daughter is outgoing, has her horse, lots of friends, tries new and different things. She is on her own journey. Son has a hampster. He is a lot like me in many ways. He keeps to himself. Somewhat shy, an introvert. Has a couple of friends, but with school out he doesn’t keep in touch or try to play with them over the summer vacation. Doesn’t excel in sports; actually has no interest in sports. He is the one I most worry about. Hopefully next week will be better because he starts a summer camp and his tow closest friends from preschool will be there. Hope that goes well.

Today was a beautiful day outside. Both spent the day inside. We went out and I got them new bikes for the summer. Their older bikes were too small for them. Bring them home and nothing. Put them in the garage. They did not go for a ride. Ditto with daughter and the horse. No riding today. It’s clear, and although he doesn’t say so, I think he feels slighted by the horse. It’s a big expense and so he sees things. One can by lots of game coins or things for playing online video games for the cost of some horse things. We tried to get him interested in horses. No. We talked about chickens, rabbits, or goats. Initially displays some interest, but like most things, he will loose interest and then it becomes my responsibility. In general, I’m not one to force things upon either of them. It never turns out well in the end.

And just like that. I am done with this evening writing assignment. I covered the five or six topics that went through my mind during the day. Might be long winded rambling, but there it is.