Cash or Credit?

This past weekend I tried my darndest to watch Wall Street 2 but it just wasn't working out. The movie struck me as being something you would watch if you had an interest in financial services and wanted to know what its like on "Wall Street". I put "Wall Street" in quotations marks because living in New York I know that the actual Wall Street is nothing more than a nondescript street with zero hints as to its illustrious ties to commerce. In fact this summer I saw plenty of tourists taking pictures in front of the subway for "Wall Street" but I tell you, if you come to New York expecting something spectacular you will be sorely disappointed. But, I digress.

I tried to watch this movie but a few things were hampering my ability to take any enjoyment in it.

First, like I said, I have no interest in working in financial services or on "Wall Street". I am actually dreading the finance class I have to take as part of my certificate program. Also, rehashing the recession in a movie guaranteed to make us hate financial services (even more) is not a good way for me to spend my time.

Second, Michael Douglas irritates me.

Third, having met quite a few "investment banker people" in their old age (thanks to my job), the movie's message of extravagance, high risk-high payout, addiction to a certain lifestyle, etc, was of no interest to me because it is not news.

Halfway through the movie (literally) I suddenly had a strong urge to complete my fall/winter 2010 shopping and abandoned the movie to visit my favorite online retailers. As I reached for my wallet and pulled out my debit card, I saw my credit card and remembered a scene from the movie.

Gordon Gekko (Michael Douglas' character) was giving a speech to promote his book,"Greed Is Good" and in the scene he mentions that greed is what led people to buy homes they couldn't afford, refinance to take advantage of the equity in those homes, and then spend the equity on frivolous items like a 2nd home, re-modelling, plasma tvs, new cars they didn't need, etc.

Sleazy movie character or not, the guy does have a point.


Although the recession started in 2007, the day I will always remember is that fateful day in September when the stock market fell almost 800 points in one day. Mogaji and I were watching the reactions of pundits on CNN and it was as if the world was going to end that day. I had visions of people having to stand on food lines, just like you see in pictures of the Great Depression. I was shocked and concerned because it was my senior year of college and I knew I had to find a job a few months later.

But then the truth came out as to what caused the situation. When I say "came out" I mean that the general public--who had had no previous interest in financial services beyond investing in a 401k--finally learned what I am sure many "Wall Street" people had known for a while. Turns out a whole lot of people had mortgages they couldn't afford,banks had been trading these back and forth, and there was a whole lot of convoluted gibberish involved.

Either way we were all screwed. I was especially screwed because I was part of the unfortunate class of 2009.

The response I had to this was irritation. At first I blamed the government--especially Bush for his snake oil peddling in convincing people that buying a home was the "American Dream"; then I blamed the banks for giving mortgages to the hapless idiots who bought homes way out of their price ranges with vague repayment plans; then I began to blame the hapless idiots who had bought those homes in the first place.

I have no patience for credit. Truly. I pay my bills and I have ONE credit card because it is clear that to survive in America you need some sort of credit history (or billions of dollars in cash) and I understand that I have to "play the credit game" to get some things.

But...

Over the last year I have only used my credit card intermittently to make sure my card company doesn't get any stupid ideas about closing the account or hiking up my APR. I spend money, but I save money. I pay all my bills each month before I spend anything on myself and when I do spend on myself I am a bargain hunter to the nth degree. As such, I do not understand why some people could not RESTRAIN themselves from purchasing things on "credit" that they should have paid "cash" for.

I swear, since the recession I have a hint of conservatism in my blood. My first thought when I heard about all these foreclosures was, "maybe next time these people won't be that stupid".

Financial irresponsibility is one of the few things that really angers me. I am not talking about splurging on yourself every once in a while, I am talking about a steady stream of stupid purchases when you don't have money or you know the money could have been used for something more important.

Lets all just be careful with the way we spend money and use credit. Your credit card shouldn't replace cash and if you want to live like that then you better make sure you have a way to pay it back!


P.S: I finally passed my driving test. It'd be a great time to go car shopping except for the one tiny fact that I might buy a car and then find out I have to move in a few months. So, my license will just be chilling in my pocket for now. At least I passed.