Max Smith’s Guide to Financial Stability

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The most atrocious thing about high school is that it uses 80% of your time inside the classroom there teaching you stuff you will never use again, and didn’t want to listen to the first time, via completely inefficient methods with content that half of which is debunked a generation later.

Chemistry, Biology, Wood/metalwork, Physical “Education”, whatever “Maths 2” was.  Remember how useful sin, cos and tan ended up being?  They even had a subject at my school called “Home Economics”, which attempted to teach girls and the odd random dude how to bake, rather than any actual home economics.

One thing they don’t bother teaching anyone is personal finance, despite it being the number 1 determinant of happiness or misery in most people’s lives, tied with marrying well or badly.  You get no universal skill set in personal finance whatsoever when leaving high school.

Parents are usually worse: they’re either financial idiots themselves, or dispense criminally damaging advice like “you’ll never get anywhere unless you work hard!” or “Buy Kodak shares – no matter what happens, people are always going to want photographs”.

As a result, you will see in life an exceptional amount of basic financial boobery around you.  You’ve probably made a load of blunders yourself.   There’s a very good chance you’re still making them.

Probably the most baffling indictment of personal finance education is the tremendous number of people who earn very good money from inheritance, wages, business or property who are in debt or live pay cheque to pay cheque.

I’m not talking about the genuine rich.  I’m also not talking about people who struggle on low wages.  I’m talking about the six-figure plus a year earners or sizeable inheritors who make frequent idiotic decisions, and the same ones repeatedly.  A minimum of $100,000 puts you in the top 4% of global income earners.  $200,000 puts you in the top 1%.  As you’ve noticed from the people around you, consistent fiscal dipshittery eats that money up quick.

Your financial boobery is the difference between just scraping by, and living life in comfort, where you can shit in peace and opulence.

So if that is you, as a public service, Smiths Daily is providing free of charge our Guide to Financial Stability.  This is not a guidebook about how to get more money – it’s a guide on how not to completely squander what you do have.  It’s not a guide on how to get rich or run a business – for that, you need to go to our Aggression in Business Guides.

Other guides about money will attempt to give you advice on how to save money by giving your identity to websites that will be hacked by Russian mobsters, tell you how to save $37 on car insurance by spending 14 hours trawling websites, and espouse the wonders of compound interest.

Many of those guides are written by people who, frankly, are retarded, and their only source of wealth is from selling guides to idiots like you.

These guides never attack the root problem.  Spolier: its you.

Now,  a word of warning – as you work through these tips, they may occasionally (unlike the rest of this website) seem the tiniest bit sexist.  There’s two reasons for that.

  • The first is that I’m not a woman. As you know, men generally believe they are “different” from women, whereas women generally believe men are “defective” women. I could have asked a woman for some helpful anecdotes, but she was out shopping because there was a “sale” somewhere.  I have no insight as to why the average bathroom must have 191 different bottles, tubes and jars.
  • The second is that the vast majority of financial dipshits are men.  Women who are financial dipshits tend to marry men as soon as possible, rendering the financial problem the man’s.

Read on, and all of your financial problems will soon be over.  If you don’t believe me, there’s an alternative – let me put you in touch with Boris Becker’s financial advisor.

 

KEY CONCEPTS

ARE YOU AN IDIOT?

We’re going to get the key concepts out of the way first, before moving on to more tactical areas.

First up – and this is critical – you need to assess your general ability to make decisions in life.  This is the key financial risk assessment you need to take.  Most of us are blissfully unaware that we are complete idiots.  Our brains are evolutionarily designed to avoid letting us know we are inept dipshits, prone to blunders, with a complete incapacity to learn from experience.  That’s why socialism keeps getting thrown up as a political and economic ideal every decade or so.

Here’s some indicators that might tell you if you are, in fact, an idiot.  This list is, of course, not exhaustive:

  • Do you wear a magnetic bracelet?
  • Do you follow a member of the Kardashian family on social media?
  • Have you moved in with, or been engaged to, multiple partners?
  • Were you talked into buying a timeshare, or a property in Cyprus sight unseen with the mortgage in Swiss Francs?
  • Have you almost died in an accident involving autoerotic asphyxiation?
  • Did you recently download a Bitcoin trading app?
  • Has anyone ever said about you, “He’s a fucking idiot”?
  • Do you have a tattoo?  Extra points if you’re Australian and its a Southern Cross tattoo.
  • Have you ever been in a strip club and thought “Ah – I’ll stick it on my card”?
  • When you describe your garish spending to a friend or spouse, do you just explain “you won’t believe how much I saved”?
  • Did you think Jeremy Corbyn’s manifesto or Bernie Sanders’ platofrm were “good for the country”?
  • Have you had more than 10 things in your life that you put down to “bad luck” or that “completely blindsided” you?

If you have, there’s an exceptional chance that you are, in fact, an idiot.

If your historical decisions have resulted in awful results, you really only have two choices available to you.

Option one – rigorously apply The Costanza Plan: if every instinct you have is wrong, then the opposite would have to be right.  Start doing the exact opposite of what your instincts tell you.  This worked on at least one television show.

If you’re not going to follow the Costanza Plan, you must discipline yourself to never again make a decision of any importance on your own.

That leaves Option two: before making any decisions of importance*, ask the smartest person you know what they think, and do that.

*Important decisions include anything with financial implications obviously, but also “should I move in with Emily?”  Side note: never move in with a woman named Emily. 

Obviously, ask them the questions above first to make sure they’re not an idiot too – remember, your judgment is not great.

This is the number one thing you need to do.  If you don’t determine whether you are an idiot or not and should be making your own decisions, all of the advice below will be worthless.

 

DO NOT – I REPEAT, DO NOT – HAVE CHILDREN

LOOK AT THIS LITTLE BASTARD.

This handy diagram from the USDA has a horrifying number for the cost of raising ONE child: $233,000 after-tax bucks.

But that isn’t the end of the problem.  No-one ever stops at one kid.  They have a boy, then one of the two parental idiots says “I’d really like a girl”, or vice versa.  Then – shocker – whichever one is the stay-at-home parent who has enjoyed their two years of maternity/paternity leave while lying to people that “being a parent is the most rewarding job in the world!”, suggests a third.  It wouldn’t matter anyway – an extended period of maternity or paternity leave removes even the slightest trace of motivation or initiative.

It’s a slippery slope.

Now, in the old days, if you were gay or lesbian, you avoided this heinous financial error through the confused bias that insisted that you would turn your kiddies totally gaybones.  Then someone pointed out that gay kids had already sprung up from hetero parents and ruined that argument.  As a result, as a gay or lesbian couple, you can now get your own child through all kinds of amazing sources that include taking The Jolie Tour to Cambodia, mixing your sperm up with your partner in a big jar and giving it to a fat nurse, or paying an impoverished womb-owner a house deposit and hoping she doesn’t decide to keep it.

Obviously a lot of people will point out the intangibles of having children, which are many – and I don’t want to dissuade you from enjoying these intangibles:

  • the 3-hourly feeding sessions,
  • the pooping, pissing and nappy changing,
  • the mind-numbing hours driving them to sports events even though they’re gangly and uncoordinated,
  • helping with homework even though they’re stupid,
  • the consistent and baffling range of health problems,
  • the absence of sex from your once horny relationship,
  • the inability to take a shit in peace,
  • the angst-ridden teen years where some new form of ghastly music roars from their stinky room making you bleed from the ears,
  • the endless stream of turkeys reeking of unemployability that they bring home and announce are their boyfriend/girlfriends, and
  • the fact that at least one in three will linger on in the house into their mid-20s because the Bank of Mum and Dad’s zero rent policy seems like a good deal,
  • bailing one in three out of jail.
You think it’s society that’s making you want to have kids, but is not.  It’s your own brain.  Your brain wasn’t designed to make rational decisions, it’s built to make you reproduce.  You’re also built to conserve energy to survive.  That’s why we’re all lazy, except when we’re chasing the things that allow us to procreate best.
You’ll be amazed at the number of dumb decisions you reduce when you no longer intend to procreate.

Did I mention the number $233,000 PER KID?

DO NOT have children.  There you go – I just saved you between $400k and $1.2 million in pre-tax dollars.

 

AVOID GETTING MARRIED 

AMBER HEARD LEAVING HER LAWYER’S OFFICE

Now, obviously this tip only applies if you have the ability to make money or already have it.  If you don’t, I suggest you attempt to immediately marry someone who does make money or already has it before your looks go.  Its the first step on the road to a potentially lucrative divorce and/or paternity suit.

Traditionally, hapless spending habits, divorce settlements, alimony and child support have been paid for by men to women.  In the USA, women earn more money than their male counterpart in 40% of two-income households, yet pay alimony in just THREE percent of cases following a divorce.  So this section will definitely seem a little sexist, but its just to reflect economic reality.

Gentlemen, now that the ladies have fired off this link with an abusive tweet and some sort of new hashtag and aren’t reading on, we can get down to business.

What you have to understand is that a woman can often be a ticking time bomb.  Obviously, I’m talking metaphorically – if women actually detonated, there’d be no problem.

Johnny Depp and Amber Heard were married for fifteen months before divorcing.  Heard cited irreconcilable differences. Most notably she’s a thirty year old lesbian and he’s a a fifty-two year old drunk who mumbles incoherently.  Depp insisted that pre-nuptial agreements were for couples not truly in love, a romantic principle that cost him fifteen million dollars when Heard filed for spousal support.

34% of marriages end in divorce inside 20 years.  And as you saw above, in 97% of those cases, you’re paying alimony for her tennis coach to move in to your house.  And that’s without considering those costly offspring.

There are two other disastrous scenarios if you let your guard down for a minute and let yourself get married and DON’T get divorced.

The first is that immediately upon having access to a joint account, your new spouse embarks on a blind spending consistency around the level of Elon Musk’s rocket program.

The second, just as bad option, is that she’s one of these fastidious savers that immediately checks every line on the bank statement questioning your spending while making dumb decisions on all the larger financial moves in life because she once read an article about “compound interest”.

Let me put it into context for you, with some contrast of two guys who at one point in time, both had it all:  Avoid getting married, and you’ll have Leonardo DiCaprio’s life.  Screw it up, and you’ll have Brad Pitt’s life.

If you need companionship, as they say about boats, rent it.  Now, I know what you’re thinking: Max, aren’t hookers expensive?  Only when you’re paying for both a spouse or girlfriend AS WELL AS hookers.  Hookers alone will save you a fortune over a lifetime.

DID YOU KNOW? The average woman uses three times more words per day than the average man. Therefore, I strongly suggest you avoid average women.

 

DO NOT ATTEMPT TO KEEP UP WITH THE JONESES.  THERE ARE ALWAYS RICHER JONESES.

Aside of the spouse and offspring blunders, most financial dipshittery goes on people attempting to keep up with, or show off to, the people around them with items that provide zero additional luxury or utility value.  How else could anyone explain the luxury watch industry?  Or $3200 handbags?

The sooner you can train yourself, and any spouses or children you may have after you completely ignored my earlier advice, to not care at all what people think of you, the happier and much richer you will be.

Adopting an asshole personality, not unlike that of say Clint Eastwood in any of his movies but especially Gran Torino, will eradicate any desire to keep up with the Joneses.  You won’t be worried about people judging you on your handbag, watch, number of unused ensuite bathrooms or foreign car.  You will deter them with your personality.

Then, just buy stuff you actually want or need.

 

TACTICAL MOVES 

If you’ve followed the four concepts above, you will now have an extraordinary amount of money to do something productive with.  But the battle is not over – here are some important things to do with that extra money.

 

BUILD UP SIX MONTHS OF LIVING EXPENSES IN SAVINGS

OK – start this, and start this as soon as you start earning decent money.

  1. Pay off any debts you have like credit cards.
  2. Build up six months of living expenses in savings: something that will cover rent, utilities, rates, food, clothing and a reasonable amount of entertainment.

If you’re too dumb to figure out how much that is, ask your smart friend.

If you are any good at life, you WILL be fired from your job at some point in the future.  You will work with morons, and you will feel obliged to tell them to stick something up their asses.  If you are excellent at life, you will not only be fired, but do it in a way that makes it almost impossible to find a job in a timely manner.  This means at some point, you are going to need six months in living expenses.

Six months isn’t “f*&^ you” money, but it’s enough.  It will allow you to live without plunging yourself into debt while unemployed.

 

GET A HOUSE WHERE YOU EVENTUALLY WANT TO LIVE, AND PAY IT OFF AS QUICK AS YOU CAN

Everyone knows that house prices go up.  The price of a brick today will be worth 7 times that in 50 years.  Also, bricks tend to last a long time, due to being made out of a brick-like material.  Land also lasts a long time, historically.  And they’ve stopped making it.

Despite advances in technology, old people, like you will be one day, need somewhere to live.  The smart move is to acquire a house while you have earning capacity, to avoid having to pay rent when you are old, have no earning capacity and your brain is mush.

Thanks to governments being too terrified of uprisings, they have maintained for a decade now nil interest rate environments designed to excite property owners watching their house value go up.  Sydney, Toronto, London, Auckland, New York, San Francisco and their city cousins – their property prices are all completely out of control.  If an alien landed from another planet and you showed him the prices of properties in those cities and compared them to something three times the size 100km away or on the beach in the sun, he’d launch some sort of photon ray at the planet and blow us all up.

Now, if you work or have a business in one of the many bizarrely priced capital cities, you may look at the prospect of buying a house with horror.

If you do, think about it this way.  The property you buy doesn’t need to be in the city you live or work in – you can get one where you want to live when you’re old, decrepit and your preferred bottom half clothing tops out at “underpants”.

It’s unlikely to be in a place where losers drive trucks along bike lanes, or toss acid in your face from a moped.  Take in the many factors while determining your exit property location, like weather, abundance of gated communities to protect you from the poor and destitute, tax breaks, social scene, lack of racial tensions that could boil over at any moment, air quality, number of and diversity of choice of members of your preferred sex, cuisine, entertainment, parks, traffic, crime, and laxness of drug and prostitution laws.

And it might cost you a tonne less.  Spend the extra half million on those hookers you mentioned earlier, or on travelling the world.

Just don’t make it one of those shitty, swinger-friendly commuter towns.  Unless you’re into that sort of thing.

You may want to get into property to make an investment, but that’s a different thing.  Paying rent is really no worse than paying interest.

 

NEVER PUT ANYTHING ON A CREDIT CARD THAT YOU CAN’T PAY OFF IN THE INTEREST-FREE PERIOD

Unless you’re a complete bankrupt, banks will be lining up to provide you with credit cards, and incredibly – even larger amounts if you consistently fail to pay them off in time.  Failing to pay off credit cards in time and paying exorbitant interest levels makes you their favourite victim type. The customers they hate the most are the bastards who pay everything off during the interest-free period.

If you can’t pay it off in that period, don’t buy it.  You’re earning enough.  Wait a month.

 

PUT ANY SPARE CASH IN A LOW COST INDEX FUND

If the country you live in has tax exemptions for certain investments, consider those, but don’t let the tail wag the dog.  Do not listen to ideas from people who make money transacting for you, or who “heard from a mate” that something is a good idea.

If you know how to buy shares and pick the good ones, by all means, be a stock-picker.  If you’re like 95% of the population and you don’t, buy a low-cost index fund with your spare cash.  No (unleveraged) investment beats the stock market over time.

 

NEVER BUY ANYTHING THAT FLOATS, HAS WHEELS, OR EATS

David Lee Roth once said, “Money may not buy happiness, but it can buy you a yacht, and you can sail up real damn close to it.”  

While Dave spent much of his life bombed out of his brain, and Van Halen improved considerably when he was replaced by Sammy Hagar, David was half right on that.  Money can buy you happiness.  But not if you are buying yachts.

Rent them if you have to.  The number of idiots I know who have bought boats of varying sizes, and use them 6 days a year is astonishing.  And in low interest environments, leasing a car beats the hell out of the depreciation and maintenance, and then the hassle of trying to sell the bastard and/or face ripping you get when trading it in.

And never, ever buy a racehorse.

 

KNOW AN ACCOUNTANT AND A LAWYER WHO ARE NEITHER IDIOTS OR CROOKS

This isn’t as easy as it sounds.  Statistics that I just made up based on anecdotes show that, while only a quarter of professional advisors will straight out steal your money, the vast majority are idiots.

Don’t assume when you meet the first accountant or lawyer that just because they’re marginally smarter than you on the thing you’re asking them about that you know absolutely nothing about that they are non-crook/non-idiots.  There’s a tremendous chance they will still be a crook or idiot.

Don’t wait until you need one: meet a bunch of them, until you find an excellent one of each.

 

BONUS TIPS

GAMBLING IS ENTERTAINMENT ONLY

Treat gambling, no matter how much you enjoy it or think you’re good at it, as entertainment in budget terms.

Casino games are mathematically designed to give the house an edge.  The more you play, the more you lose.

If you’ve been following the Gamblers Guide this year, you’ll see we have a pretty good year on the NRL: 82-55 against the spread.  In the NFL this season, at the time of writing, the Gamblers Guide is 44-27 against the spread.  That’s about $1000 in winnings, thanks to the crushing negative effects of the juice.  And those two numbers are a complete miracle.  They will not last over time.  I will give all of that back and more.  I don’t have a system.  You don’t have a system. 99% of sports gamblers lose money.

The only benefit of sports gambling is that it allows you to be a completely unjustified smug asshole. You see, the more a gambler loses in cold hard cash, the more you gain in supposed gambling experience. This is why you’ll hear gamblers say things like, “Five and a half? Pfft. Vegas clearly has no clue how to set the line for this game.”  That lost money allows you to pretend that you are smarter than other people.  You may write a weekly column titled the “Gamblers Guide” with your smugness.  Sportsbooks worldwide have long thrived on people dumb enough to believe they can outsmart them. And, as long as morons like you roam the Earth, they will continue to do so.

And don’t get me started on horses.

Treat your gambling as entertainment money, nothing more.  You won’t win enough for it to ever give you pleasure if you bet above that.

 

MINIMISE STRIPPER DAMAGE

If you are a female reader of this website, odds are that this will not be a problem for you.  You will attend “male revues” for three hen parties in your lifetime, two of them while holding an inflatable plastic penis, and one wearing a sash that says “bride”.

For men, strip clubs truly are magical places, where you can mingle with any number of junior analysts from local investment banks or hedge funds while maxing out your credit card on $500 worth of dry humps in the VIP lounge, or drunkenly and gullibly accepting a stripper’s offer to “buy her a drink” before discovering it was a $90 glass of Moet.

Strippers are wizards at separating men from their money.  They are smart, savvy women who combine vulture-like business sense with an absence of body shame and the proper body parts, while implying that they’re only really doing this to get through uni, or “because its a good workout”.  That’s when she isn’t being sexually harassed by the club owner, or being accused by her unemployed drummer boyfriend of being a no-good whore.

The problem for you is that its not a fair fight.  No-one is ever sober in a strip club.  Being sober enough to see the C-section scars is a real bummer.  Your chances of making sensible fiscal decisions while drunk and surrounded by boobs are zero.  No straight man has ever achieved it.

I have not one but two friends who have maxed out multiple credit cards for five figures in single nights with no memory of the evening.  And blue balls.

If you’re going to a strip club – and lets face it, they are adult male Disneyland – go to an ATM first, draw a specific amount of cash, and leave all of your cards in your jacket in the cloak room.

 

 

Now, you may disagree with the tips contained in this guide, and to that I say tough shit. Write your own.  For those of you who agree, enjoy your new-found financial stability.

 

 

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