It’s that time of year again. When the days grow darker, and colder. The sun barely breaks the horizon, and the creatures of the night begin to emerge more frequently. The ghouls, zombies, mummies, and witches (not to mention a few superheroes) begin stalking our suburban neighborhoods.
Going door to door, they’re looking to give a good scare in exchange for some delicious free candy. Yep, it’s Halloween!
While I love free stuff as much as the next person, the current iteration of Halloween is a far family-friendlier form of scare than it’s “Trick or Treat” origins imply. Imagine a group of masked hoodlums showing-up at your front door demanding payment or else.
Taken outside the context of our modern Halloween holiday, that’s a very scary story.
Halloween is (of course) famous for scary stories. People love a good scare, so Hollywood regularly cranks out scary movie releases right around Halloween. Ghosts, zombies, vampires, psychopaths, and creatures from the netherworld are all very popular genre’s for scary movies.
You know what’s even scarier? Bad personal finances.
So why isn’t there a horror movie genre based on frighteningly bad personal finance? It’s just as scary as any made-up monster… except the monsters in these stories are real!
Let me tell you about them…
The Mortgage Zombie
A few years back, zombies movies and TV shows super popular in Hollywood. They were everywhere! It seemed like every scary TV show or movie coming out was about zombies. It got kind of boring after awhile.
The zombie trend has definitely cooled down in recent years (there’s only been one new zombie show this year), but I think Hollywood is missing the boat on another kind of zombie that’s a lot closer to home —The Mortgage Zombie.
Just like the undead, a mortgage zombie is a creature that’s neither dead (in this case bankrupt) nor hardly alive. They exist almost entirely to pay the gigantic mortgage on their overly-large home. These individuals are trapped in a lifecycle of home consumption that forces them to work extremely long hours at the office, in the hope of getting promoted and perhaps escaping their endless living hell.
With so much of their available cashflow (usually greater than 60%) going to meet required mortgage payments, Mortgage Zombies can hardly afford to do anything in their lives but work. After taxes, and “living” expenses, mortgage zombies have little-to-no savings. If they need to take a vacation, buy a new car, or have some other large expenditure, they often do so with credit card debt. This further traps the Mortgage Zombie in a debt circle.
Instead of brains as sustenance like traditional zombies, Mortgage Zombies seem to persist almost entirely on coffee. This is probably due to the long hours at the office during the weekdays, and more than a few on the weekends. Without coffee, Mortgage Zombies are often angry and have been sighted walking around in a mindless stupor early in the morning or late at night.
It’s best to avoid Mortgage Zombies if at all possible, and to make sure you don’t take on too much mortgage debt, lest ye become a mortgage zombie yourself.
The Paycheck Lycanthrope
The wolfman story is a classic genre that tells the tale of a lunar lycanthrope — a mild-mannered human being that transforms into a wolfman (or werewolf) every full moon. It’s a great horror story that’s persisted since the European medieval period.
In current times however, there’s another transformative creature that stalks the landscape on a different monthly cycle — The Paycheck Lycanthrope.
This tragic species of monster is tied to a paycheck cycle. At the beginning of the month they’re human, flush with cash and spending happily — buying dinners out, shopping at retail stores, and ordering things online. But then, at the end of the month, as cash begins to get tighter they transform from a generous and friendly human being into a dastardly creature.
As the money runs out, they grow irritable, and angry. They often grumble about how their “low paying job sucks”. In actuality, the real problem likely isn’t their job, but rather poor money management and a illogical desire to live outside their means.
These monsters *should* have spent more conservatively earlier in the month, (instead of splurging) but there’s no going back in time now… the money has already been spent.
As the paycheck cycle nears its end, more and more of these frighteningly poor money behaviors begin to surface (becoming more and more monstrous by the day). Sometimes the lycanthrope will “forget” to pay the rent check, or conveniently “forget” to make regular and well-known utility payments. They also start hitting-up friends and family for money, “forgetting their wallet” when co-workers accompany them to lunch, or other similar ‘skimping’ behavior.
This particular monster is also found visiting payday loan stores in an attempt to “get money early” at usurious interest rates. Which is of course a very bad idea, but when this particular lycanthrope is in the monthly throes of the disease, logic and reason have little meaning.
If there’s one horror movie genre that never gets old, it has to be vampires. Vampire stories have been published for over two hundred years now, and show no signs of stopping.
While I doubt most people believe in the existence of creatures that feed of human blood, there is a creature (another form of blood-sucker) that actually does exist in the real world — The Financial Vampire (aka the vampire financial advisor).
Yes, your financial advisor might just be a blood-sucker, feeding off your life force. Only in this case, it’s not actual blood, it’s your money. These so-called financial advisors feed off whatever funds they can siphon away from their clients. These are financial-vampires.
As you might expect, they become particularly adept at draining the life force from their client’s accounts. They dress in fancy suits (like traditional vampires), and are extremely smooth talkers. Some people say they even have hypnotic powers, used to convince clients to make bad financial decisions.
Financial vampires will drain your life-force slowly instead of killing you outright… so as not to attract attention. If they draining your finances slowly, it’s likely you’ll never even notice.
The fees charged by advisors are often small (frequently around 1%), but over time this amount actually compounds into a rather large amount of money. That’s not the only way they drain you — financial advisors become very good at churning clients through investments designed to reward them with sales bonuses, commissions, and kickbacks. Essentially finding ways to extract more of your hard earned
dollars life force.
Other tricks include selling “loaded” funds, funds-of-funds, and other unusual financial products that come with higher fees.
My own parents once fell victim to one of these financial vampires, and it was an exceedingly difficult feat to extract their finances from the monsters clutches. The story is detailed in this post if your curious, but the TLDR take-away is that I had a up-close and personal view of how these financial monsters operate. It’s not pretty.
My advice, is to become a DIY investor, and save yourself before these blood suckers get their hands on your money.
Yes, monsters do exist, and they’re currently living all around us in our towns and cities. The thing is, they are not quite like Hollywood monster movies. There’s usually less gore, no scary background music, and a lot fewer jump scares… but financial monsters really do exist.
If you’re not careful these monsters can feed on your finances, or in worst-case scenarios you could even become one of them.
Building up your financial skills is paramount to avoiding falling prey to these creatures. Remember to carry plenty of stakes, garlic, silver-bullets and maintain a hefty emergency fund to ward off these monsters.
Have a safe and happy Halloween everyone!