Skin In The Game
Thursday, June 24th, 2010Author Tony De Maio
I have been reading about the number of folks that are walking away from “underwater” mortgages where they owe more than the house is worth, even though they can still make the payments. I believe it is called a “strategic” default.
I am somewhat puzzled by this. When I grew up, you gave your word and you kept it. If you could not keep it, you apologized. “Apologizing” meant:
1. I’m sorry I did that, I should not have done so.
2. It will not happen again.
3. What can I do to make it up to you?
I’ve given some thought to this phenomenon and suggest the following.
When I was growing up, I built model airplanes. While I could not afford a subscription to a model magazine, fortunately the library could. I would eagerly await the next issue of the magazine and peruse the construction articles in it. Invariably, there was a “free flight” model (you turned it loose and chased it down), a “control line” model (it flew in a circle on wires), and a glider or rubber powered model. Once in awhile, there would be a radio controlled airplane, but not too often since it was quite expensive.
When you found one you liked, you scaled up the plans (you sure as hell weren’t going “waste” twenty five cents by sending away for them), saved your money for balsa wood, and built it. When they crashed, you repaired them–you had “skin in the game”. You learned craftsmanship, patience, perseverance. You learned that you couldn’t afford to build ALL the planes, so you selected carefully and learned value.
I grew up (or at least got older) and subscribed to the magazine–I still do. I got an issue a few months ago that prompted me to write to the editor. I essentially said that I was quite sad. In the past, there were three construction articles, then as the hobby became more sophisticated, there were two construction articles. Then as the magazine began to emphasize radio control, there would be only ONE construction article. In the issue referenced, there were NO construction articles.
The reply I received was expected. There is no demand for building models anymore. Furthermore, no one Is DESIGNING model planes anymore. The emphasis is on RTF (ready to fly) airplanes. Folks buy them for their kids, the kids crash them, and then they languish in the attic until sold at a garage sale. The kids have no skin in the game.
The SkyFly Max comes completely equipped and ready to fly, with a durable Aerocell foam airframe, a powerful brushless motor, a Tactic 2.4GHz radio system, LiPo battery, charger – even 4 “AA” batteries.
I got older and put away my airplanes and took up ham radio. Many is the hour I perused the surplus stores hunting for surplus radio equipment from the Korean war or Vietnam war. I built several “rigs”, some test equipment, and some audio systems. None of it worked the first time and required trouble shooting. I learned a lot about electricity and electronics. I believe it was during this time I also learned to swear. I got most of it to work eventually. I still have some of the stuff I built–although I have no idea where I would find the vacuum tubes should one go out. I had skin in the game.
I gave up ham radio many years ago, though the lessons I learned have benefited me greatly. I took my computer to the local repairman for service, and in talking with him found out he was a ham operator. As I chatted with him, he said that, “No one builds his own equipment today. It’s all integrated circuits and so cheap that it isn’t worth it.” “Walkie Talkies” I would have killed for as a teen cost ten bucks at WalMart. The kids play with them, and when the batteries run down, they put them in a drawer and forget about them.
He also lamented that folks weren’t staying in the hobby much anymore. Folks would come in, stay a year or two, then just drop out–particularly the younger ones. They had no skin in the game.
When I was growing up, we played sports. Today the kids don’t “play” sports. In order to get up a game of baseball, we would call our friends who would call their friends and we’d ride our bikes to the school baseball diamond. Same with football. Today, there is Little League, Pop Warner, etc. The parents take the kids to the games, yell at the officials, send their kid to various camps (e.g. baseball camp) and think they are doing the kids a favor by not requiring any effort on their part. The kids, being kids, take the benefits and then don’t follow through. They have no skin in the game. They are pleasing their parents–they are not PLAYING. Is it any wonder we have an obesity problem?
At 16, I bought a car. It wasn’t much of a car–a 1949 Ford, six cylinder with a non working overdrive and non working radio. I didn’t know much about cars but I knew how to read. First, I fixed the radio–it turned out to be the antenna wire. Then I went to the library and took out the book “Fix Your Ford”. It was there I learned about flow charts. I used it to fix the overdrive.
The car was never reliable and I was always fixing it. The “training” I received in my sojourn with electronics served me well as I could swear with the best. My parents wanted to “get rid of it”, but I would have none of it. I had put so much of myself into the car that I had skin in the game.
Today, parents buy their kid a “nice” car and the kids drive it into the ground. They have little concern for checking the oil or coolant. They drive too quickly over rough roads, spin the tires, etc. When the car “breaks” the parents either throw it away or have it fixed. The kids continue with their behavior. They have no skin in the game.
I went to college. Back then, there were no student loans. If you wanted to go to college, you “had money” (or your parents did), or you worked. I worked. As such, I appreciated my education, picked my courses carefully and “got my money’s worth”. Many of my fellow students “had money”. They picked the “easy” courses, dated extensively, and never missed a party. I studied. They had no skin in the game–I did.
I bought a house. It wasn’t much of a house, perhaps 600 square feet. It cost eleven thousand dollars. Being an FHA loan, I have to come up with a thousand dollars or so for the down payment and closing costs. I had to save for six months to get that vast amount of money. When I moved in, I was quite proud. I immediately began improving the house–sprinkler system, fence, new lawn, garden, paint, patio, etc. Each time I did something, the house became a little more a part of me. When I sold the place, it was very traumatic. You see, I had skin in the game.
When I think about it, I wonder how I would have acted had the house been given to me. I wonder if the bank had said, “just sign here and we’ll put you in the house” if I would have been so energetic in working on it, improving it, and keeping it up if I had no skin in the game.
So, folks, if you think about it and consider the way we have brought up the “kids“, it should not be shocking that 14% of the homes are in some form of foreclosure. The shocking number is that 84% are not!
Editors Note:
The same can be true of the current administration and their touting of civillian control of the military and their demands that “their” will is the one that counts. Since they are not in the military and did not serve in the military they have no “skin” in the game and feel entitled to bandy about ideas and concepts that waste resources and human life on the whim that they feel they have a clue about what is happening on the ground in a foreign country which they may have had a press junket or day trip to visit. While I feel Petraeus will do a fine job commanding Afghanistan forces the simple truth is that McCrystal got burnt for allowing leakage in his camp regarding ideas and feelings expressed by the entirety of the military. Rather than listen to the criticism and doing something about it Obama muscles McCrystal out. Kudos to McCrystal for not groveling and going out with his integrity in tact.
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Kurt says:
June 25th, 2010
7:33 am
Ya know, this is so true now days. Pity really. The current crop of kids are being trained to be consumers, rather than doers. I would love to have money just as much as the next person, but me thinks we are doing them a dis service by giving them anything and everything they want, at no price to themselves. What happens when the money runs out though? Think the Greek riots were bad? They were not near as spoiled as Americans still are.
Dave Franklin says:
June 25th, 2010
9:18 am
Dear Tony,
This article is a Spot ON!, BULL’s EYE! It is DOING, and knowing HOW TO DO and HOW TO THINK rationally, that counts in Life, NOT WATCHING.
This has become a generation of “WATCHERS”, all due to the all powerful “attractant” force of the TV.
TV programs notoriously end with the comment, “Thanks for watching”, which I take to say, for making me rich with the loss of your most precious time of life.
I was born and raised on a farm wherein I learned from Real Life Experience, how to grow any Thing, do any thing, fix anything etc. In high school, I had a one year course in INDUSTRIAL ARTS. Between the Farm and School, I listened, and learned by doing, NOT watching.
Thus, when my $700.00 professional chain saw began performing erratically after ten years of flawless service, I KNEW…just by the sound of the engine, that it needed to have the carburetor rebuilt. Dealer price: $80.00 plus parts. My cost: $19.00 for the rebuilt kit and 30 minutes of my time.
When my 1949 4 cylinder tractor engine began to loose power, I KNEW…the engine needed to be rebuilt. I took it apart, had a machine shop “true” the cylinders and plane the head. Purchased the new pistons, rings, rods, bearings, etc. to match the specs on the reconditioned block & head, and put it back together with the correct torque specs on connecting rods etc.
It started on the first impulse of the starter, and has run flawlessly now for over a decade since.
Dealer price to repair? Over $1500. My cost for the machine shop work and new parts? Less than $500.
WHEN… my neighbor’s 2 cycle trimmer would not start, my mechanical ear and years of experience informed me what was wrong. The gas line inside the tank had broken. Went to hobby shop and purchased gasoline fuel line. Cost for fuel line? $2.97 Time to take apart, fix and reassemble? 30 Minutes. Dealer price to diagnose and fix? $40 and up.
When my son’s 4 cycle scooter would not start, my mechanical knowledge informed me the engine was not getting sufficient fuel. It needed a rebuilt carburetor. Dealer price to install replacement carb: $200.00 + parts. My cost? $55 for the rebuilt carb and one hour of time.
MY POINT IS:
The Real world will only and always work on knowing WHAT TO DO and HOW TO DO IT, NOT watching.
At 63, I grieve a little every day inside for my children, that they too, were not born and raised on a working farm: that they have not been present, most of the time, to observe their father’s doing, to learn by thinking and doing for themselves, by getting their mind involved and trained in the “trouble shooting” mode, and their hands dirty so they can be as self sufficient and independent as possible, instead of being “watchers”.
If you do NOT understand how a Thing works, you cannot restore it to working order.
Our country has become broken and broke ($) by the TV propagandists who understood in the very beginning, the all powerful attractant (really, the distraction power) of the media, then purposely used it to “transition” our once free Nation of knowledgeable doers, into watchers!
The nation as a whole, with few exceptions like myself, has been rendered mentally “anesthetized” and “neutralized” by a plethora of “Fractional Reserve” amusements.
It is no accident that the word “amusement” is derived from the Greek word ‘amuse’ which means NO THINK!
Dave Franklin says:
June 25th, 2010
9:34 am
PS. I too, built from scratch and flew radio controlled model aircraft. The experience taught me aerodynamics, basic aircraft engineering & airframe construction, small engine mechanics & troubleshooting, and so very much more. Today, ARF model airplanes (all ready to fly) are “NO THINK”, “NO KNOWLEDGE of HOW & WHY IT FLIES and WORKS”, “crash and burn” “On the Trash Heap tomorrow” products, just the same as the “Trash Heap” our country is headed for, for all the same reasons stated above in Tony’s article and comments below it.
Kind Regards to All,
Dave Franklin
Tony says:
June 25th, 2010
9:36 am
Kurt,
I haven’t verified this, but I heard that the average inheritance lasts 5 years. Many lottery winners are dead broke or in bankruptcy in 5 years.
The got the money with no effort. They had/have no “skin in the game”.
always,
tony
p.s. the “84″ in the last line should read “86″
Oldmanriver says:
June 25th, 2010
11:36 am
Tony,
I agree about this but its not only the young, it seems in this society only the sucker has skin in the game and thats the guy thats left holding the bag. Maybe the young are just very good students and saw what has happened to their parents. Personally I am living my life to have as little “skin” in the game as possible. I dont want to own anything. I rent my house and right now Im looking at how feasible it would be to live out of my car or buy a van to live out of. I want to be homeless. I consider it a life skill to live a decent life with no skin involved. Although I dont understand people who go bankrupt just because the percieved value of their home is less than what they paid for it. All they are doing is taking a loss for no reason. Makes no sense.
I wouldnt count the young out just yet, how many of you know how to flint knape an arrow head or knife? I assume most of you dont….but why not it used to be a valuable skill? Can you sew up a prolapsed uteris? Probably not you have no need to do that. Do you know how to build and program a robot? Im sure some of you could, I cant. There is a reason people lose certain skills and but usually gain others. I know a couple of kids that took a nerf gun and set it up with a motor, motion detector and a computer so that anyone that walked into a certain area would get “shot” by the nerf gun. It was all automatic. I was blown away, they were jr high kids and they were able to do it without help. I have no idea how do to that. There was a young kid the other day on the news that sent a balloon into near space and took pictures of the earths curvature and then reclaimed the camera using cell phone gps. I never did anything like that. Those types of skills are just more pertinate this day and age. Pretty much everything you can think of has been done with the air foil, radio communication isnt cutting edge either. Alot of people dont even listen to the radio anymore. Kids can talk with people over skype where its actually a video phone, why would they care about ham radio? These kids came into a world where radio and air travel is as common as dirt. Look at the military, whats the effective weapon that everyone is talking about? Unmanned flying drones, the pilots are back in the states flying missions half a world away. Im sure more and more of that will be seen. Ill always remember what my grandfather said about my father who is in his mid 60′s now. It is almost verbatum what you said in your article. Shiftless lazy no good kid. Dad is the hardest working guy I know and at 63 could work me into the ground. Dosnt matter, I need different skills than what made him successful. I do think that people are more protective of their children which is probably why they are not doing the things we did when we were their age. Of course I set the lawn and the house on fire. LOL maybe mothers have a reason for being more protective.
Tony says:
June 25th, 2010
11:50 am
Dave,
Then there is the flip side. I replaced the brushes in my electric 1/4″ drill. It is a black and decker so old that it is made out of metal. Folks don’t “fix” anymore, they throw away and buy.
Go to any garage sale and look at what is for sale for a couple of bucks–everything from microwaves to chain saws. Why should they fix when you can buy so cheap. I’ve amassed quite a bit of “wealth” in terms of tools and appliances because I was able to make minor repairs to “broken” things at garage sales.
always,
tony
Tony says:
June 25th, 2010
11:59 am
OMR,
I’ve replied to you under “Civil Rights…” but am having trouble getting it posted.
Some skills are quite generalizable. Yes, ham radio may be “outdated” if you consider it a method to talk to folks–particularly with telephone costs so cheap. On the utter hand, if you consider it to be learning and experience, such skills are never out of date. My “ham radio” experience has saved me thousands of dollars in electrician bills. Also, next time there is an emergency and electric power is out, listen carefully to the news for the part that ham radio played during the crisis.
What you learn from model airplanes, ham radio, woodworking, motocycles, boating, or any other hobby is how to learn. How to determine that a problem exists, how to isolate it, how to go about getting it fixed, and how to reap the satisfaction of knowing that you solved a problem.
You also learn craftmanship, perservence, problem solving, patience, research, and other skills. If you are in a “social sport” you learn social skills, responsibility, leadership, etc.
In many cases, the knowledge/skills/abilities you achieve are transferable to many other situations.
Generally, you don’t learn these things from operating an x-box or watching T.V.
Oldmanriver says:
June 25th, 2010
12:16 pm
Yes very true I agree about that. I wonder if the short attention span has something to do with all the activities kids are in these days? When a kid has 4-5 different things such as sports, clubs and what not how much thought do they really give to any one thing? I dont know, I do know kids today are a lot busier than I was.
James the Wanderer says:
June 25th, 2010
1:06 pm
It varies with the kid….
My girl was diagnosed with Aspberger’s, an autistic spectrum disorder. She can focus on whatever she wants, but it pretty much has to be HER idea, or no go. I can focus on something and make the world go away for a couple of hours, if it’s really interesting – but I see where she gets it from.
It also varies with the gear…
I have replaced the bearings in my Sears 1/2HP router once (so far); I also burnt out a Ryobi jigsaw trying to cut countertop laminate (it was way outclassed by the laminate!) and threw it away, even if it could have been fixed (doubtful, I think the motor died) it would still have been underpowered for anything useful. It was sad when my Sears 1/2HP circ saw died, but it gave twelve years of faithful service, and a new one of the same class was about $50, so it was cheaper new. My Apple IIe still works (1982 vintage computer); things worth keeping are well built.
Not sure if there is a moral, except “it depends”… and the choices we make in buying will either make us or break us financially.
Liked the article! Keep it up!
james
Kurt says:
June 25th, 2010
1:23 pm
5 years? I thought it was a lot shorter period than that, closer to 1-2 years. Either way though, it’s usually wasted real fast.
Tony says:
June 25th, 2010
1:34 pm
James,
Youse sed:
It was sad when my Sears 1/2HP circ saw died, but it gave twelve years of faithful service, and a new one of the same class was about $50.
Therein lies the problem–if it IS a problem, and I’m not at all sure it is. Too many questions, not enuff answers.
You say a new one cost $50 or so. If you want to take in a few garage sales, you can probably get one for $5/$10. The “problem” (if that is what it is) is that it is cheaper to throw it away than to fix it. It is cheaper to pay someone to do “it” than to take the time and trouble to do it ourselves. It is easier and cheaper to buy food than to grow it in a garden and perhaps (heaven forbid) can it.
Some folks call it “division of labor”, and “consumption”. I call it worrisome, but I’m not sure why.
rebel without a job,
tony
Desertrat says:
June 25th, 2010
1:44 pm
I dunno about skin in the game, but I’ve left a bunch of skin under the hoods of cars.
As far as walking away from an underwater home loan? Granted, I’d never have let myself get into such a situation to begin with, but if it were a matter of feeding the wife and kid, don’t stand in the way of my leaving. If I could afford the payments okay, I’d be the bankster’s worst pest until there was some renegotiation in my favor. The ad valorem tax folks, as well. I bought two different houses, way back. The intent, each time, was for long term stay-there. Life changed, as life always does, but I didn’t leave on account of money…
Tony says:
June 25th, 2010
2:37 pm
DesertRat,
Such is not a “strategic default”.
Shore ’nuff, times change. Folks are walking away that CAN afford the payments, sometimes buying a similar house to theirs at a cheaper amount than they owe before they default on the one they are presently in.
always,
tony
Desertrat says:
June 25th, 2010
6:09 pm
And just how long has personal irresponsibility been the official policy of the Left? “Society’s fault”. Unending welfare justifications, regardless of ability to work. Structuring educational systems such that discipline has become practically impossible. Absence of accountability in government employees. And on and on.
At some point this all comes to permeate society. The wonder is that it is as limited as it is…
Tony says:
June 26th, 2010
9:49 am
OMR
Youse sed,
“I do know kids today are a lot busier than I was.”
I did some financial consulting. (Fee was usually a dinner or a beer.)
I would ask three questions at the start:
1. What was the happiest time of your life?
They would usually say, “When I was in school.” To which I would then ask. “How much money did you have?” The answer was usually “little” or “none”. With that I’ve established that if they are seeking “happiness” through money, they are probably looking in the wrong spot.
2. What are you willing to give up to get more money?
The answer was usually “huh???”
I would then say, “I don’t know much about you, but I know that you live 24 hours a day, and every minute is filled with SOMETHING. It might be T.V., sleep, eating, working, etc. In order to ‘get money’, you have to put in effort of some kind. That effort takes time. What will you give up?”
The answer was usually, “Gosh, I never thought of that.”
In like manner, you say “Kids are busy.” T’aint so. They live 24 hours just like the rest of us do and did. Try this::
Most kids plug into the world of television long before they enter school. According to the Kaiser Family Foundation (KFF):
two-thirds of infants and toddlers watch a screen an average of 2 hours a day
kids under age 6 watch an average of about 2 hours of screen media a day, primarily TV and videos or DVDs
kids and teens 8 to 18 years spend nearly 4 hours a day in front of a TV screen and almost 2 additional hours on the computer (outside of schoolwork) and playing video games
http://kidshealth.org/parent/positive/family/tv_affects_child.html
Linda Brady Traynham says:
June 27th, 2010
3:09 am
Great, as always, Tony. Memories…the times over dinner when Daddy would say, “Honey, I was listening to your car when you came home. After dinner lets go take a look at…” and those when I would say, “Daddy, I don’t like the way the steering feels…” I was surely the only girl in my school who greased her own car, did her own oil changes, and replaced (constantly, it seemed) wheel cylinder kits. Daddy and I refinished all the wood trim on an old Mercedes and I made a tonneau cover for the TR-3 (Daddy ordered the hardware from England) that was BETTER than the commercial one was. Tight as a drum head! We did stuff like that for FUN as well as because we believed in knowing how to take care of our things ourselves.
Such wonderful responses, guys, and very indicative of why Tony, duh Rat, and Dave not only earned places in my heart but would be welcome if they showed up after TEOTWAWKI with nothing but their minds, skills, and principles. All three are “worth feeding,” as I always think of it, and I still hold the day will come again when we all have to be “worth our salt.” Steve, Lynne, Michael, Essie, Tex, others are on that list, most of you too far away or as far along prepping as I am, I value your friendship greatly. HERE is where the exciting dialogues are, these days. There are reasons for that, so be patient. Hugs, Linda
Tony says:
June 27th, 2010
6:43 am
Linda,
I recall a prof of mine saying that the whole culture was built upon “fun”.
A student asked, “What’s wrong with that?”
The prof said, “Nothing wrong with having fun, but perhaps we should also teach our children about ‘joy’. The joy of having accomplished something.”
rebel without a job,
tony
Oldmanriver says:
June 29th, 2010
11:02 am
Tony,
Well as far as kids being busier today. I had acres of time that I spent doing nothing constructive. Most of my friends kids are constantly going to and from some sort of practice or meeting to another. When I was growing up I could only be in 1 after school activity besides 4-h. I spent most of my time screwing around in the shop or out in the woods. I wouldnt ever want to go back to school, if I could I would go back to being 4 years old again. That was the best time of my life. Everything has been downhill since then.
Tony says:
June 29th, 2010
5:09 pm
OMR
Yet, they spend an AVERAGE of 4 hours/day watching TV and 2 additional hours on non school related computer (games?).
‘Pears to ME that they are spending 6 hours/day (48 hours/week) in “non productive time” and screwing around.
always,
tony
p.s. You see the results of “practicality” in this oil spill. Obama has to be “practical” and appease the unions, the environmentalists, the protectionists, and any other group with a real or imagined vested interest. Cleaning up the spill is taking a back seat to appeasing the groups. With no overall “goal”, other considerations are paramount.
As one participant said, “You report to a committee, and every one of them has veto power. It’s impossible to get anything done. There is no one in charge.”
Desertrat says:
June 29th, 2010
5:38 pm
“I spent most of my time screwing around in the shop or out in the woods.”
At the time, you probably didn’t realize what a learning experience that was, to be useful in later years. What I learned from traipsing around underfoot of my grandfather led to my doing all my own home repairs and maintenance, which led to me doing most of the work in building my house after the basic box was dried in.
“Out in the woods” was a strong beginning to an ability for wilderness survival, if need be. Sure helped in learning the ways of wild critters. Hey, lip-squeaking a fox in close enough to boink him in the nose with your boot-toe justifes a lot of woods time.
Tony says:
July 1st, 2010
12:34 pm
As I sed, I spent a lot of time “screwing around” with model airplanes and ham radio.
always,
tony