My grandparents came of age in the Great Depression. I grew up in an Upper West Side Manhattan brownstone they owned and lived in too. Whenever we threw out a piece of furniture that had seen better days, they would bring it right back in. Everything I’m learning about life, investing, and economics I heard or saw from them, but more or less ignored until now. Not only did they live through the Great Depression, they learned from it and prospered. That is our opportunity now – sure things are bad in the economy, but you learn your greatest lessons during the toughest times. This blog is dedicated to both learning lessons as I go, and sharing what I have learned.
I have a young daughter and have thought at various times that I’d like to write up “100 Things I Wish I Knew”. You know that regret you feel about the lost love, the lost money, your lost youth? What if you knew then what you know now? That’s where I’m trying to go with this blog. If you’re young, this blog can be like my grandparents. True life lessons learned the hard way – and it’s your opportunity to avoid some of life’s greatest pitfalls.
Overall the best lessons I’ve ever learned were on the job training, or on the street, and of course things I saw and heard from my grandparents. I value street smarts over book or school smarts. However, the internet is another story. It has been an amazing resource for me. Imagine a time when you heard about some pundit and his or her ideas that sounded so intriguing. Or a too good to be true investment opportunity. The work you had to do to get information could take weeks or simply not be available. My sports passion is baseball and I play in a Men’s league now. I have learned more about hitting and pitching from the internet than from any coach I ever had. When I was single I found an amazing “how to meet girls” guru and I met her shortly after. Ever since the 2008 financial crisis I became fascinated by economics and how it all happened. After 3 years of reading all kinds of blogs, sites and theories I’ve stumbled upon an old economic theory that predicted the crisis, and has accurately predicted what the various policy measures would do. Can you imagine pre-internet? I would never know what I know now.
Many people think that because I grew up on the Upper West Side of Manhattan I had a silver spoon in my mouth. Yet the Upper West Side of the late 60’s and the 1970’s when I grew up was closer to the Upper West Side depicted in “West Side Story” than it is to the Upper West Side of today. In the 1980’s things changed. Luxury high rises replaced 2-story building’s with a pizza shop at street level and an aging ballet studio above it. Boutique food stores replaced roach infested grocery stores worked by tellers with bad attitudes. I was mugged or had to run from bigger kids probably 20 times or more in my youth. I had a switch blade flashed in front of my face because I refused to empty my pockets. I had a huge fist shown to me to impress my how much bigger he was than me because I wouldn’t give him my watch. I was punched in the stomach when I was the only one of my friends who refused to empty my pockets. I never handed money over – I took my lumps or I ran, but I never once gave any mugger anything. It might not have been smart – I think I’ll counsel my daughter to hand it over – but I still can’t do that – of course I haven’t been mugged since I was 15 or 16 years old.
My father was an elementary school teacher and my mother raised 6 kids. We never would have been able to live the way we did if not for my mother’s parents, the grandparents I mentioned above. We were both poor and rich at the same time. We had no money, but we had everything we needed. An odd way to grow up. Odd too was being one of the few kids in the neighborhood. The Upper West Side has a Little League now, back then there were no organized sports. We played “stoop ball” on the sidewalk, football in the street, and stick ball on the Soldiers & Sailors Monument on Riverside Drive. My 3 brothers, and 2 other kids who lived on the block were 99% of who I played with. The other kids I knew from school either lived too far away, or had vastly different interests or home lives. Some kids lived in the projects and we knew we didn’t belong there unless of course I wanted to add to the number of run ins I had with bullies. Other kids we went to school with were well off, but didn’t seem to like sports. Instead they stayed home and played “Dungeons and Dragons”. I never did figure out what that was all about – we were just always outside. So it was us 6 boys who stuck together.
I went to High School in the Bronx which meant a one hour commute by subway. Back then the train cars were still graffiti filled. Some graffiti was art – I still remember the side of one subway painted like Andy Warhol’s Campbell soup cans. But for the most part it was dreary, and I had to be up at 6am in order to make it to school on time. The train travelled through the largely burned out and destroyed South Bronx. The “fist” episode was on that train one Saturday morning on my way to football practice when I was a freshmen. I rarely hung out with friends in High School because the train ride was too far and too likely to result in an incident. Once on my way back late at night I raced to catch the closing door of the train and found myself trapped with sleeping homeless people. Apparently they would sit the night in between stations. When the conductor came through and saw me he had to open it back up.
These stories are neither here nor there. They’re just my strange youth and partly what has made me who I am today – cynical, observant, slow to trust, and I’d like to think street smart.
I went to college 13 miles from the Lincoln tunnel in New Jersey. So close but yet so far. All of my friends were from some suburb in New Jersey. Their lives leading up to college could not have been more different from mine. I was shocked by the ingrained racism, their awe of New York, but also their comfort in their own skin. Something I simply did not have. I went from being the shyest kid in High School to going out of my way to make friends and avoid another 4 years of misery. College was great but since I really didn’t know myself, and because I was still overcoming my shyness, I had many regrets – the lost loves for example. I also fell in love and got married a few years later. We were not right for each other, not from day one. But we keep in touch to this day. After all, 10 years together at that age was like a lifetime. But that’s for another story.
The best thing about college was accidently finding my way into the “Communications Studies” major. In my junior year I won the “Most Outstanding Speaker” award. Imagine, they shy high school kid. I was still shy, but I knew how to give a speech. More importantly, the “Applied Communication” class of my senior year taught me how to get a job. Unfortunately I did just that immediately after graduating and one month of interviews. Not that I knew any better back then, but had I known what I know now I would have done a “walk about” or travelled the world for a year. Of all the bad things you can do with debt, that might be one of the best. Afterall, life lessons and experiences are what I now value the most.
I entered the advertising industry and later an ad sales job – yup, the shy kid. I was in technology ad sales and that got me involved in the dot-com bubble. I was worth a million dollars on paper and like so many others back then had a spreadsheet showing me how much richer I would be as time went by. In the end I probably gave away anywhere from $500,000 to $1 million by not cashing in stock, by taking lower pay in exchange for stock options, and by investing my 401k money into the company. Warren Buffett said the number one investment rule is not to lose money. He should have added how – like “keep it safe” or “cash it in”.
From one bubble to the next, I became a Real Estate agent after being laid off from about the dot-com job I had. Hired one day, laid off the next as things kept imploding. You would think I learned something from the dot-com bubble, but instead I probably lost another $200,000 or $300,000 during and because of the Real Estate bubble. The name of this blog, “Bursting Bubbles” as more than one meaning.
So why read this blog? Well, I am confident I have learned my lessons. If I took rule #1 of my investing playbook to heart – which is to earn and save – I’d have at least $1 million in my bank account. Instead I have a tiny fraction of that. But its growing now, and my rule #2 is Buffet’s number one – don’t lose it. Keep it safe. Cash is king until you KNOW you have a winning investment. If it’s too good to be true, it probably is.
You can’t learn everything from a blog – you really do have to get punched in the stomach by a love, a job, an investment, a boss, or a bully to truly learn some lessons. I think love is that way for sure. The saying “To have love and lost is better to have not loved at all” is most definitely true. Oh do they hurt, but no pain no gain. My lessons in love are rather simple. Try your best to distinquish between wanting something just because you can’t have it, and really truly wanting something. And avoid falling into something only because it is better than what you had before. The trick to avoid being single forever on one extreme, and being stuck in a bad relationship…. is the trick. On one hand you have to give it a shot. On the other you have to know when to walk away. Good luck with that. This blog is more about practical life lessons you can simply apply. Love is too complicated – or maybe too simple – for me to spend much time on. I’m happy now. It’s taken me 40+ years to get there. I hope you do better.
In the meantime – if you’ve got a life lesson good enough to share – drop me a line or add it to the comments section of any post here. I’m hardly done learning, and probably not done making mistakes either. But hopefully my myth busting, bubble bursting and general life lessons, thoughts and ideas will help you prosper and avoid some of the more dangerous hair pin turns in life. Enjoy.