Stock Splits, White Collar Crime, and Leases v. Mortgages

Stock Splits, White Collar Crime, and Leases v. Mortgages

Both Tesla and Apple stocks split today, and if you’re wondering what that means, I’m going to try to explain it because I only have a general sense of knowledge about market speculating, but I also find that when I do work to try to explain shit, I end up understanding it better myself. There’s nothing really too complicated about it, but I am not a teacher (and really good teachers are quite difficult to come across, so I have no idea how teachers aren’t paid $100K; if they were, the position would attract the type of people who should be teachers), nor do I really consider myself a good teacher because I’m not a great explainer because I’m not good at simplifying complexity, but again, like I said, there’s nothing too complicated about stock splits, in and of themselves, but they exist within the realm of the fantastic, and so, the world in which they exist is extremely complex (beyond the comprehension of any single human mind), but again, like I said, the splitting itself is quite simple in concept. 

…and then I will get to the thing I actually want to touch upon, which is white collar crime.

For the sake of easy computation, pretend you bought ten shares of TSLA five years ago when the stock hovered around $200/share. You shoveled in about $2,000. No, I’m not going to use any exact figures from the actual price history of TSLA; I will use “abouts.” If you owned ten shares at the end of last Friday, they were worth about $2,000/share. This means your $2,000 now represents $20,000.

This morning, after the market opened with the 5:1 split, you would now have fifty shares, when added together still equaling $20,000. So, now, you have fifty shares each worth about $400 as opposed to ten shares worth $2,000 each. 

What this does is a number of things that can and cannot be known because I am not on the board of Tesla, which means that very few people actually know what Tesla hopes to accomplish, while everyone else speculates, but one of the obvious reasons would be to allow for new speculators to enter the market. A $2,000 share price is steep, but $400 is far more reasonable. 

The market is open now, however, and so, there are speculators speculating, and the price per share has already gone up since the market opened. So, what was originally your $2,000 that you shoveled into TSLA five years ago is now more than $20,000 and counting with each second that passes as you sit on your butt doing nothing. 

This is how the rich get richer without doing a lick of work, and without paying taxes (a theme for another post). Here’s a quick example of how being rich just makes you richer. Say you’ve got enough cash to purchase 250,000 shares of anything. Doesn’t matter what the entrance price was/is. All that matters is that you can afford to buy 250,000 shares. Consider this, the stock you invested in rises by literally, $0.20…twenty cents in one day. You make $50,000 because you were able to afford a butt-load of shares all at once. Is this unfair? Absolutely. Is this how the world works? You’d better believe it.

So, now to the thing I want to talk about…White Collar Crime (and the difference between the approval processes for a lease and a mortgage). 

And no, this is not another racist rant about white people, but the overarching implications are racist because, let’s face it, basically all the rich people in this country are of caucasian descent (there). 

My point is that I (we, my bodybuddy/lifemate/roommate and I) recently renewed our lease, and there was a new little thing in it that we noticed that differed from our last lease. When it comes to cannabis use where I live, it’s recreationally legal for those 21+, but because I live in an apartment, there are house rules, and so, there is no smoking allowed in the units. Duh. Our last lease stated, in so many words, that if you’re caught, the management has the right to evict. This lease, however, states, in so many words, that if you’re caught, it’s $150 for the first offense, $250 for the second offense, and then after the third offense, the management has the right to evict. 

Now, I’m not gonna lie. I know what pot smells like (but I definitely do not partake in it in the confines of my own home), and it wafts from every hallway on every floor in our building. Nobody’s gonna turn anybody in or complain. I’d guesstimate that 50% of this complex houses 65+, 40% 40+, and 10% under 40. And some seniors like pot, too. 

The thing is that that little change in our lease is not insignificant because what the management has done is they put a price on the crime. Crime is now officially something that can be budgeted. It’s that simple. It’s our first opportunity to commit a crime, knowingly, and get away with it by simply shelling out a hundred bucks. That’s only if you get caught, and getting caught in this scenario means someone telling on you. 

I only mention this because of the type of apartment we live in. We had to be approved through multiple tiers of financials, which means it houses a certain income level, which signals to me that the entree into the white collar crime life begins early. The approval process for apartment living is a completely different world from that of homeownership. 

And this is the thing I want to say about mortgages. When you apply for a mortgage, the less likely you are to be able to afford to pay, the more likely you’re going to get approved for whichever amount it is that the banker offered. The application process scans your credit score (an arbitrary number that “calculates” the amount of debt you have in terms of whether or not you’re making your payments) and your income. Nobody looks at your wealth. Income is variable and in a state of flux at all times. Your wealth is how long you can sustain your current life without any income. 

So, when you apply for a mortgage, all the banker wants to see is how large your monthly income statement is and how much of it the bank can take. 

And I know what you’re thinking, “But a home is an investment.” How? Yes, a house can be an investment, but not if you’re living in it. A home is ONLY an investment if it is making you money. And I know what you’re going to say now, “But it will appreciate and then the house will be worth more than it was when I bought it.” Well, it MIGHT appreciate. But then what? You sell it? And then where will you live? You have to use that money to buy another home, not to mention the extra taxes you have to pay for now owning property. Your home is not an investment unless you have a space that you can rent or unless part of that home is an office for your business, etc. But if you buy a house to live in, you are not making an investment. If you buy two houses (you live in one and rent out the other), then yes, of course, buying a house is an investment. That’s the rule I learned in all of my real estate training, you don’t buy a house until you can afford to buy two houses. And again, I know I am speaking specifically to a certain income level. This obviously is not very good advice for anyone being victimized by the System.

The thing about a lease (for some apartments) is that you don’t have to have any income, if you have enough wealth, AND if you are applying with financial information about your income, you have to prove you can afford MORE than your rent (we’ve seen upwards of 5X). A lease is also not a mortgage because your landlord is the one who holds the mortgage. This is why a landlord’s tenants must be more able to pay their rent than homeowners need to be able to pay their mortgages. 

A bank wins every time a family can no longer pay their mortgage because the bank gets your house as soon as you can no longer pay, and then they turn around and sell it for what you owed them. Banks are in the mortgage business to see you fail. And mortgages are debt. Not that there’s anything wrong with debt; there isn’t. Everyone’s got it, because it’s necessary. It is what makes money go round. But it is debt, and you need to think about it that way. Sure, you may rationalize that it isn’t debt (like a friend of ours did when talking about a new apartment venture), but it is, because, like I said before, that money has to provide you shelter…forever…in an endless cycle of taking on a new or different mortgage with every new place you ever want to live. 

And I know the messaging of the dream…you buy a house because then, when you’re old, you don’t have to pay rent to a landlord, your shelter is secure. If you’re lucky enough and diligent enough to pay off your mortgage (look it up, find out how many homeowners have no mortgages), you’ll still owe the taxes on the house every year. 

Landlords need you to win; they depend on you winning. And yea, obviously some landlords are shit, but if you’re paying your bills and adhering to your lease (and again, this is not blaming or shaming victims of the system), you can’t be evicted. And like I stated earlier, rent money doesn’t go nowhere. Your shelter is all part of your living expenses. There’s no such thing as a free place to live.

The biggest selling point for me, however, when it comes to renting, are the amenities and the maintenance team. When we added up the cost of a gym membership and pool membership and a rough estimate of the cost of new appliances, the numbers didn’t lie. It’s significantly cheaper for us to pay the amount of rent we pay for the things we want access to. So, if anything, I’m just outlining our reasons for renting, I guess *shrug*

But, like always, do what you need to do. I’m not here to tell you what to do. I’m nobody’s supervisor. I’m just here to help define the landscape, for those who want/need help. But seriously, this is your life. If a house is your dream, definitely get a house. You just need to know what you’re in for, and I’ve found in the past that most people do not know what they’re getting into because someone has lied to them. 

Thanks for reading, if you’ve found yourself here :)

Building Wealth

Building Wealth

I don’t want to live in a house. I want to rent an awesome apartment with amenities aplenty. But even apartment renting requires applications and approvals and basically the same sorts of hoops a home mortgage requires. My point remains—Being judged on one or more points of criteria by someone who is also being judged on one or more (probably unrelated) points of criteria by someone who is also being judged on one or more (probably unrelated still) points of criteria by someone who, etc., etc., &c., is the very special misery of living in today’s world.

When you apply for something (anything), you are being judged by people. Every single person is being judged by someone for something. How can proper judgments be made in this sort of system? Well, by heavily relying upon algorithms, and the thing that algorithms need is data … raw data … the stuff (supposedly) that we cannot control, manipulate or lie about. But what happens when we live inside the system that creates the systems that determine whether or not our data is “real” or real or “fake” or fake.

There is no such thing as an unbiased report on the self.

We’re all forced to make judgments, sometimes, about those who are making judgments about us. It’s insane. It might literally be insanity, the opposite of sanity. So, as I apply to rent apartments, I am being judged on any available data related to my financial and criminal standing. Some sort of artificial intelligence routinely scans my credentials and provided identification, and I’m essentially “run through the system,” but that “system” has been created by other systems and exists within a system of created systems. So, at what point do the systems no longer exist; at what point are we freed from the judgments of those who are also being judged? Who (or what) is the judgement-less judge?

My livelihood depends very muchly upon data points that are mostly beyond my control. And every point on my data-point identity depends heavily upon the existence of all of the other data points. A change in one of my data sets changes the entire shape of my data-point identity—I no longer am or I now officially am qualified.

The depressing point of this is that a lot (and I mean unknowable amounts of a lot or just a little bit of stupid) has to go wrong for an upper-middle to middle class white family to no longer be middle class. There are systems in place to catch them from falling too far. The flip side of that coin is that if one is in poverty, rising into the middle class is nearly impossible in These (current) United States.

And so, if I’m being really honest with myself, if I’m being really honest with the reality of my situation, I am not upset that this application process is annoying; I’m upset because I am just now realizing how difficult a life in poverty must be in America. And yea, it’s sad and pathetic that my mind is just now able to come to terms with the reality of the situation and that my “problems” are not problems because my family is comfortably middle class. My family (in its entirety) can financially prop me up until I “make it.” This is not the situation for most people. Of course, we are not rich or wealthy in American terms, but we are, nevertheless, very well off. It’s that generational wealth, that disposable income that can be spent on the entire family, not just your immediate family.

And I am not unique among my friends, which means that I’ve been living in a soft, cushy little bubble of things seemingly being able to happen for me, luck finding me, opportunity coming my way. We (my friends and I) were always primed and ready for luck and/or opportunity to strike. If something (anything) came up, we could all participate. I wanted for nothing (and I wasn’t [my parents swear to this to this day, but I do not believe them] even spoiled).

I do not know the reason behind my desire to write about this particular thing today, but I do know that whatever issues I am facing with my housing situation pales in comparison to the struggle that is life without any family money. And I want to change this; I have plans to change this. I’ve created and designed a wealth-distribution machine that will hopefully create opportunity for those who struggle the most. My job, now, is to build it.