The world is obsessed with the high price of oil and gasoline. High prices are the result of exponential demand in China and India along with limited "output" capability of the oil companies of the world.
When you fill up your car with gasoline, 15 gallons of gas will cost you $60. That is a shocking number especially as you reach in your pocket to pull out three $20 bills. It makes you want to puke! But it is what it is. It helps to think about it in terms of "incremental" increase versus one year ago. The difference today is gas is approximately $1 per gallon higher than last May. That means on 15 gallons of gas, you now pay $15 more than last year. That still is a lot of money but it is not as shocking as paying the $60 total tab at the filling station.
So let me see! You drive 15,000 miles per year. If you average 20 miles to the gallon, you will use 750 gallons of gas a year. If you are paying $1 per gallon more for gas this year (the incremental increase), your total living cost for the year went up $750. That is $15 per week. It is hardly going to break the average family but it might eliminate a visit to McDonalds or cut out an occasional Starbucks lite vanilla latte with whipped cream topping.
There is a danger with trying to soothe your feelings with incremental cost rationalization. The incremental cost of gas is forcing plastics companies to pass on higher plastic costs (plastics are oil derivatives). McDonalds is going to raise prices because it costs more to transport products to their stores. The U.S.Postal Service will increase stamp prices because it costs more to operate their motorized fleet. The more I think about it, we can go broke by absorbing incremental costs.
The lesson Grasshoppers is that the increase in gas prices does need to be put in perspective. It does change the way we all spend money. There are ways to adjust. Some are painful. Some just make common sense. It seems to me though that the cost of energy is here to stay!
A friend of mine would say "when I think about something like high energy prices, it hurts. So I don't think about high prices". It is stupid logic, but I think for just today I won't think about high incremental gas prices. There, I feel better.
Love,
Dad
We got an invitation to a cookout at Addie and Ike's over the Memorial Day weekend. It turned out to be a nice cool sunny day (Sheboygan is always cool). Coincidentally, Addie's birthday was the same day. She turned "Umpty ump" years of age. Ryan's birthday was the day before Addie's. The whole occasion turned out to be very festive.
Ryan introduced himself to the "Spice Warehouse" in Milwaukee and purchased spices to conjure up a magical recipe for grilled chicken along with a vegetable salad and a "down home" potato salad. It was the kind of thing that young people attempt. Scumptuous!
Okay, okay, where am I headed? Well, sister Addie always comments on my blogs and how my memory of things is so much better than hers. I don't think my memory is any better. We just have different perspectives. I was older and of course I will recall different events.
Addie remembers being surrounded by 3 brothers and always being left behind as our Dad would take the boys off to baseball practice or basketball games.
I remember Addie being the darling of the family. My Dad came from a family of boys and his Dad (Grandpa Chalk) came from a family of two boys. So here comes Addie. The first girl in several generations. She got all the attention (that is my perception). The proof is that she is named after her great grandmother (Chalk's mother was also named Addie May). For some reason Addie has struggled with the name but I think it is special and unique. So now get the picture. The first girl in two generations named after a family member. Where does that leave 3 unappreciated boys?
Addie mentioned that she recalled getting a pink doll bed that remained in her possession for many years. I vaguely recall the bed. It probably was in her bedroom. Addie got her own bedroom because she was a girl and 3 brothers had to room together in one bedroom. Get the picture? Her own pink doll bed. Her own bedroom.
Then when she reached 10-12 years of age, she got a new bicycle. Her 3 brothers never, ever got a new bicycle. They were always "used" bikes purchased at distressed prices and handed down from one sibling to another. Let me see, Addie got new things, brothers got cast-off stuff.
Ike ran a video tape (it was a compilation of old 8 MM film put on tape) of the 4 Andrews children in the late 1940's. There was Addie running around with braided "pigtails". As always, she was the star of the show. If you look at old famly pictues, Addie will be "wearing pigtails".
Of course I'm teasing about Addie about our childhood memories. The lesson Grasshoppers is that you all have different memories of your childhood and they are edited by your mind. Addie remembers things differently than I do and that is okay.
Maybe Addie will share more memories, maybe she won't. Growing up as a girl in a "male predominent environment" generates interesting insights.
I was supposed to play golf in my league this morning. It is 48 degrees and 20 mile an hour winds! I don't think so.
Love,
Dad
There is a new book published by Jim Nance, a sports announcer with CBS, called "Always by My Side". He was close to his Dad. As Jim climbed the announcing ladder, events got more prestigious. He would invite his Dad to join him. The NCAA Final Four basketball extravaganza. The annual Master's Golf Tournament. You get the idea. Father and Son enjoying the finest that sports had to offer. Apparently Jim's dad died in his late 60's totally unexpectedly. Jim's Dad always supported his announcing effort. So at the pinnacle of Jim's career, the special moments he sought were gone. Jim's message is that his Dad is not gone at all. He is always with Jim, "Always by His Side" if you will.
I've always kidded about everybody's predisposition at birth to be a certain way. We all have a computer chip implanted into our brain and it has a genetic code that serves as the basis for everything that we do. What else would describe the big difference between siblings? Different chips. As we grow and mature (some of us mature), our computer chip logs all experiences. Once something gets into the chip, you can not move it to the "trash disposal" bucket. It stays in the chip. What else would explain the female propensity to remember every annoying little detail of your behavior? It is in her chip.
My goal here is to draw some analogy to Jim Nance's feeling that his Dad is somehow along side him as he enjoys sporting events. I think that the computer chip that each of us has keeps us close to loved ones that have "passed into the light". My Grandpa Chalk can send me e-mails through the chip in my mind. My Dad can talk to me anytime he wants. Myrna who served as my equivalent of Yoda with her advice, can boot up to my computer anytime. My Mother can send me "down home philosophy" when I need it. It works the other way too! You can reach anyone you've known by imagining thoughts through your "mind computer chip". So like cell phone technology, Web availability and cable access, your mind chip makes every person you've known available instantaneously. Imagine that!
The lesson Grasshoppers is that like Jim Nance, we all get the feeling that someone we once knew seems present or close. I think they are. The mind (a mini-computer) is doing it's job. You are not crazy. Listen! Enjoy the moment.
Have a nice Memorial Day.
Love,
Dad
Imagine yourself flying an airplane. It is not a small airplane with a single propeller. It is a jet fighter aircraft capable of cracking the sound barrier at 600 mph. The plane is worth $40 million. You can't afford any "fender benders". No day dreaming while flying this "puppy".
The training for jet pilots is to always keep you mind at least 5 minutes "in front of the aircraft". This means you have to anticipate the airways up ahead so that when you reach your future points in time there are no surprises. You know! Avoid mountains. Anticipate busy air space filled with other airplanes. Slow down to approach a landing. You get the idea.
Life is similar. You are not flying an airplane but you are in charge of your life. Successful people plan their life's weeks, months and even years ahead of today. That means you go to school to learn skills that you can use 4-5 years from now and perhaps the rest of your life. You start saving money now so that 10 years from now your life is improved. You invest money into your 401k on a regular basis so that there is retirement money in the future. If you don't plan ahead and anticipate, your aircraft (your life) is headed for disaster (or at least exciting times). Occasionally you can do a few barrel rolls and upside down loops for fun.
So you need to climb into the cockpit of your own "jet life", strap yourself in and file your flight plan because your life is going "faster than a speeding bullet".
My Dad died 51 years ago (it seems like yesterday). I've been married 48 wonderful years (I'm not stupid). My Grandmother Myrna who was like "Yoda" to me died 24 years ago. Grasshopper No.5, the last of the offspring will be 31 this year. In retrospect, my life has been like a speeding bullet. Some of it I planned by staying "ahead of the airplane". Some of it is the result of crash and burn tactics. My plane is somehow still flying. Maybe it is because I had a two seat airplane and a capable co-pilot.
The lesson Grasshopper is to take control of your life and dictate your own destiny. You've got to stay ahead of your airplane.
Love,
Dad
For those of you that are horse "affectionados", the super horse "Big Brown" runs the second leg of the Triple Crown this weekend. He seems destined for greatness.
The owner of Big Brown named him after UPS Delivery Service (sometimes known as Brown). Mr. Pompa runs a distribution company that uses UPS to deliver a variety of products. Pompa bought the horse for a bargain price and ran him in the New York Derby. Big Brown won the $190,000 first prize. Mr. Pompa was approached by a syndicate of Arabs from Dubai, Saudi Arabia. He sold 75% interest in Big Brown for $2.5 million dollars and retained 25% ownership. Not bad! I'm sure the profit of several million dollars was appreciated.
Then, Big Brown won the Kentucky Derby and the horse's value just went up. Big Brown is estimated to be worth $80 million in stud fees. So now Mr. Pompa has the prospect of another $20 million of future income (his 25%). Whoa! This "Big Brown thing" is turning out pretty well.
My Mother Alice, known for her practical wisdom, always offered the observation that "some people can fall into a pile of sh-- and come out smelling like a rose". I don't know if this applies to Mr. Pompa exactly, but he certainly is smelling like a rose these days.
In one of my conversations with God, I indicated that I would be satisfied with one "Big Brown" event. You know! Buy something silly on e-Bay that happens to be traceable back to the Ming Dynasty and it turns out to be worth millions. Or go to a baseball game, where Barry Bonds hits a history making home run and you catch it in the stands. You get the idea.
Dream on!
The lesson Grasshoppers is you never know when that pile of brown stuff you fall into might turn into something special. Don't plan on it! You'll be happier if you set goals for yourself and work towards them.
Go Big Brown!
Love,
Dad
I was reminded of a story I've told before (ad infinitum, ad nauseum) but it is filled with many lessons. So one more time.
My Dad Bucky and his brother Bob lived in a house two blocks from the City Club. Bucky was around 10 years old at the time which would have made Bob around 7. It had been raining outside. Their mom Myrna (my Grandmother) had told them they could not go outside and play unless they wore their boots. In those days, rubber boots were pulled over your regular shoes and either buckled or zipped up.
Bucky was argumentative and "took on the issue" directly. He would not go outside if he had to wear boots. I can almost hear the defiant words "I won't do it". So Bucky suffered the consequences and stayed in doors and of course drove Myrna "nuts by being underfoot".
Bob, a totally different personality, was non-confrontational. He put on his boots and didn't protest in any way. This particular day, Myrna happened to be watching Bob from the front window as he left the house. Bob got to the bottom of the front porch steps, took off his boots, placed them under the stairs and ran down the street to play with his buddies. He defied his mother's instructions but totally enjoyed the day (he got away with the deception).
The question I've always had was "which kid would I rather be"?
Bucky was honest upfront and said he wouldn't wear the boots. He suffered by being restricted to the house. Bob was deceptive but achieved his objective of playing outside.
Myrna thought the situation was cute and elected to keep her mouth shut (until she told the story years later).
The situation turned out to be a microcosm of the way the two boys lived their life. Bucky was constantly fighting the system and suffering the consequences. Bob usually "went with the flow". There is no question that Bob's enjoyment of life was higher than Bucky's. Certainly a lot less stress.
I could write a book about all the possible mistakes that were made by all three (Myrna, Bucky and Bob). In the end, each person had to live with the consequence of their action. I don't know if their are any absolute rights or wrong.
The lesson Grasshoppers is that everybody is different. It is what makes life so interesting.
Would you wear your boots of not?
I honestly don't know what Grasshopper No.1 would do?
I do know what Grasshopper No.2 would do.
I do know what Grasshopper No.3 would do.
I think I know what Grasshopper No.4 would do.
I do know what Grasshopper No.5 would do.
Love,
Dad
Mother's day is Sunday. Your Mom loves you in a way no one else can!
Grasshopper No.1 gave me an "Elvis Presley Live" CD as a belated birthday gift. I loaded it into my CD fanny pack and trundled out to the local mall for my walk. Wouldn't you know my CD player batteries were dead. Why would they die just as I loaded a new CD? So I had to wait a day to play Elvis. The next day I loaded new batteries. Still my new CD would not play. So my thought was, "my old CD player has finally crapped out". Nope, other CD's worked. Then I put Elvis into my car CD player. Again it wouldn't play. So I guess I go back to Danny Davis and the Nashville Brass. I do appreciate No.1's effort.
The notion of there being a "tipping point" with gas prices is intriquing. At what price will you change the way you use your automobile and live your life. I know some people are refraining from filling their tanks. When the price gets to $20, $30 or $40 on the pump, they just stop pumping. This act of defiance doesn't solve anything but it makes you feel better.
A tipping point is when you refuse to buy a different vehicle (even though you need one) because the improvement in mileage on the new car is very small (maybe non-existent).
A "tip" is when you cancel a trip because the calculated gas cost is prohibitive.
A "tip" is when you are choosing between shoes for the kids or gasoline.
A "tip" is when you are choosing between food for the table or gasoline.
You get the idea. There is a price point of gasoline in everybody's budget that causes buying habits to change. It is different for everyone. If you are Hilary Clinton and earned $20 million last year, I don't think gas prices matter. If you are Obama and you earned $4 million last year, I don't think gas prices matter. If you are McCain and you wife is worth over $100 million dollars, I don't think the words "tipping point" mean anything. Did I leave anyone out. Woe is us.
Hopefully you don't reach the "tipping point" when if comes to Mom. Drive less, love more!
Love,
Dad
The name Warren runs in my family. My Dad's first name was Warren. There is at least one or maybe more great-children that have "Warren" sprinkled into a middle name.
I have always been fascinated by the "Oracle of Omaha", Warren Buffet. He owns about 25% of a company know as Berkshire Hathaway. That makes him the richest man in the world. One share of Berkshire Hathaway is worth $135,000. So if you own ten shares of Berkshire, you are a millionaire.
You get clues in life. When I first joined Ripon Foods, there was a consultant that mentioned he owned several shares of Berkshire Hathaway. I asked what the company did and he said they were a conglomeration of different companies. In 1989, Berkshire Hathaway sold for $4000 per share. My thought at the time was "holy sh--". I would have needed to mortgage my family to buy several shares. But, alas I didn't.
Several years earlier, my Uncle Bob had asked me if I had ever heard of Warren Buffet. I responded with "who"? He said that I should look into the company. The Chairman of the Board was a special individual. Again, I ignored the clue.
So my dream in life slipped past my grasp. Today there is no way I could afford to buy1 share of a stock that doesn't even pay a dividend ($135,000). But I had clues as I traveled the path of life that could have led me to a lot of money.
Why this discussion about Warren? He held his annual stockholder's meeting in Omaha last weekend. It was like a lovefest. He has made millionaires out of a lot of people that believed in his genius. Stockholders come from around the world to visit with Grandpa Warren. He seems like you and me. He tells stories. He eats Dairy Queens (he owns the company). He attends the local baseball game of the semi-pro team (he owns the team). He throws out the first pitch at the game. They buy furniture, jewelry, and time shares on executive jets at discount prices (he owns the companies). He owns insurance firms, newspapers, soda and snacks. You can even play bridge with him. He sings and plays the ukelele. This pilgrimage of loyal stockholders happens every year.
My conclusion Grasshoppers is that Warren puts on his pants just like you and I. He is 77 years old, in good health and looks like a normal Grandfather. He was born in Omaha, grew up in Omaha and got filthy rich in Omaha. He had a paper route. He sold gum door to door. Just because bought a small farm at age 15 made him a little special.
Obviously I am not going to get rich any more from investing in Warren Buffet's company. I guess my best shot at the "golden ring" is for him to adopt me.
By the way, Warren's advice is to buy good companies and hold them. Imagine! Buy and hold. I don't think he can spell the word "sell".
So my advice is look for clues as you live your life. Riches may be closer than you know. Maybe you can hold your own lovefest some day. Imagine, Chairman Deb, Chairman Kelly, Chairman Chris, Chairman Paul and Chairman Margaret. Culvers is for sale!
Love,
Dad
Grasshopper No.3 along with your Mom and I attended our second Clark Howard seminar at the Kimberly High School. Most proceeds from the ticket sales go to Habitat for Humanity.
When you look in the dictionary for the definition of "cheap", there is a picture of Clark Howard. Excitement in Clark's life revolves around a continual series of money saving events. If he will change satelite TV every 18 months to save money. If he can save money by booking airline tickets that stop 4-5 times before reaching a destination (versus direct flights), he'll do it. He will shop where there are no parking meters to avoid parking costs. You get the idea.
What did I learn at this seminar? Clark asked "how many in the audience are debt free". I bet that close to 30% of the audience raised their hands. My conclusion is that Wisconsinites are conservative and many have a few bucks tucked away. I guess not everybody in life is debt up to their ass.
What else did I learn? Saving money very early in life translates to big investment returns later in life. You can't start saving money too early. There is a big benefit to educating your kids about this phenomenon (my Grandchildren).
What else? There is an artform to constantly looking for the best bargains in life. Because things keep changing, you need to constantly educate yourself about financial opportunities.
So how did Clark do personally when he was in town. Well, in an attempt to avoid parking fees in a local ramp, he got a ticket for parking illegally on a side-street overnight and had to pay a $25 fine. Then he bought a Green Bay Packer sweatshirt at Goodwill for $6 versus $25 at Target. It looks like he saved $19 but he bought it for fun because he was in Wisconsin. He probably won't ever wear it again. By my calculations,Clark lost $6. He is an Atlanta Falcons fan. So even the great Clark Howard don't score very well in saving money but he has fun trying.
The lesson Grasshoppers is that you need a disciplined savings program in your life and it helps to be "cheap".
Love,
Dad