Conspicuous Consumption and New Year's Resolutions
Our good friends Larry Kronick and Sonia Kulik took us out on their new boat on Sunday... the boat was someone else's, but is new to Larry... new it would have cost over $100K, he bought it for $7,000. The boat is beautiful, but because Larry waited for the market to come to him, it clearly is not conspicuous consumption (CC).
Soooo, we did the In-Land Waterway, first to the north from his home on the ILW, then out onto the ocean headed south and then back into the ILW and back north to Larry's place. On the way, I took some pictures that will show CC...
The first turn out of Larry's place we headed past the Island Marina... this sixty foot boat (above), with bow-thrusters, did a u-turn in front of us. It wasn't the first or the last big one we saw... but it was a lasting first impression.
As we continued toward the ILW, there were continuous homes like these (yes, and like Larry's) that had boat docks with lifts... check out this 35 foot out-board on the lift below... yes... that adds up to 900 horsepower... we saw several, but again, it was a lasting first impression. We chuckled a lot, knowing that these boats probably had the equivalent of a mortgage on them, and we were in Larry's 35 foot, $7000 boat... upon which we were having a great time... lots of great food, imported beers, all served with a smile, on board.
I thought that you would enjoy seeing what the beach strip has turned into between Hollywood and Miami Beach... with the exception of a few private home stretches where a lot sells for an average of $11million (although I understand that there are a lot of homes on the market these days), and a "very few" public beaches, there are continuous condos and hotels... and these are the first thing a hurricane sees when it is deciding where to hit! The condos often sell for several hundred thousand dollars... for 900 sq. feet!
It wasn't until the Madoff Ponzi game hit the press that I really began to understand CC. Several years ago, my rabbi, Maynard Garfield (no, I am not Jewish, but he is my Rabbi anyway) told me that you needed at least 10 times your salary in net worth in order to retire with the life style that you are in... and live another 20 years. I believed, like him, that any more was a waste. What I didn't realize was that many people make a lot more than that... and we found out last week what they do with their money... they have so much, they don't even have to be careful with it... instead, they can give it to guys like Madoff... good on them!
CC happens all the time, and I am a part of it, unfortunately. While we try to cut back, we see others doing the opposite. I look at the BMWs, Porsches and Mercedes... all cars I have owned and still value. The difference today between owning them as a good investment and CC is that today they are still being driven at 80 mph with <15mpg...>