What we can learn about the current state of our economy by traveling and visiting with others outside of our home turf is amazing. For many of us in the investment business, our view of the economy is easily warped by statistical reports and interpretations prepared by professional economists. Even when we do leave our home turf, we often end up somewhere visiting with other individuals who see society through our same set of rose colored glasses. Yet we know the 325 million citizens of the US, from the rich to the poor and all those in-between, are the ones who produce the wealth of this nation.
Getting out and listening to others’ life stories can teach us more about our economy than graphs, statistics and opinions. It can also add to our faith that there is a positive future for all. So I want to share with you the stories of a paint salesman, a widow on disability, a valet, and a veteran.
A couple of months ago my wife Kathy found out that the singer and songwriter Joe Jackson was planning a limited concert tour in Canada and the Northeast. Many of you may remember that Kathy has had a lifelong love of music. That love has been inherited by all of our children, though old Dad’s musical talent is unfortunately limited to playing the radio. I can tell you that getting me to attend the numerous concerts throughout the years can come with a price. This time, the price was a motorcycle ride. The concert we chose to attend was being held at the Flynn Center for the Performing Arts in downtown Burlington, Vermont.
The Flynn venue is an intimate 1930s Art Deco theater. Burlington is a city on the shores of Lake Champlain, home of the great sea monster Champ, a cousin to Nessie of Loch Ness. I am fond of Art Deco, and with the added opportunity to see Champ, as well as the beauty of Vermont in summer, I felt this was a fair price to pay for attending the concert. Besides, Joe Jackson, with his days as a punk rocker, his hit songs Steppin’ Out and Is She Really Going Out with Him?, and his classical compositions would be enjoyable, even for me.
However, for Kathy, the price was a bit more extreme. It is approximately 1,000 miles from our Rock Hill, SC home to Burlington, VT. The last semi-long ride for Kathy was not that enjoyable for her. On that trip we blew out a rear tire on the bike while riding pretty fast on the interstate highway. This did not leave her with very fond memories. So I was quite surprised that she agreed to ride to Vermont.
I pulled out the oldest of my motorcycles, a 2002 BMW K1200LT, changed the oil, and added a few amenities for comfort. We planned on a leisurely pace of two and one-half days to Burlington, one day of rest, and a two and one-half days to return home. That would give us plenty of time to see the country and visit with people. So, on to the stories.
The Paint Salesman – The American Dream Fulfilled
Early one day I was finishing up the morning ritual of bike preparation when a gentleman came along to inquire about our ride. Since it was six in the morning and both his wife and mine were still asleep, we sat down over coffee to visit. I found out that he was at the hotel with a baseball team of 9 and 10 year olds who were playing for the state championship. They had won their game the night before, and would be playing in the state semi-finals later that night. He let me know with great pride that he was the coach. He had coached youth baseball for over thirty years, and this was the best team ever. I imagine it takes far more than the love of the game to spend hours and hours with these youngsters. I’m sure it takes an extra-ordinary individual whose true reward comes from sharing the ups and downs of life with these few lucky kids.
He had been married, as he said, “forever,” and together with his wife had raised three children into adulthood, all of whom are now college graduates without the burden of school loans. Besides being free of debt, they all make more money than he does. For he and his wife, the reward is seven grandchildren, with the eighth due in a few months.
Although his job, selling paint, may not seem that exciting, for him it was rewarding enough to live the American Dream. He sells automotive paint to body shops. He explained that his business is recession proof. The more cars on the road, the more accidents, the more need for repairs. And because the repairs are paid for by insurance companies, the state of the economy, good or bad, does little to impact demand. The only problem is the lack of painters. It takes a great amount of skill to professionally apply automotive coatings today. The paints are mostly metallic flake, plus an application of a clear coat. It takes the ability of a chemist and an artist to properly prepare and apply paints. Just about every shop he calls on are in need of painters. An added bonus is that they make more than many college graduates do in this country.
A Widow on Disability - $50 is a Big Incentive
At one of our stops I noticed that people were entering and exiting one of the meeting rooms of the hotel. My curiosity was peaked, and I moseyed over to ask a woman what was going on. Come to find out, a University was conducting a research study, and the reward for sitting down in front of a computer screen answering 250 true or false questions was a prepaid $50.00 credit card.
Being the skeptic I am, I asked her if the credit card was real. Her immediate response was yes! She said she had taken the survey the day before and had already spent the money. She was there waiting on three of her four adult children whom she had gathered and brought in to get their $50.00.
She had a little time, so we talked for a bit. She said she had worked in housekeeping at the hotel after her husband died, until something happened which qualified her for Social Security Disability. She and her husband had raised four children, and she has a “whole bunch” of grandkids. Three of her four children were having rough times, so the $50 would come in handy. The fourth owns a small business with her husband. As with most parents, she was proud of each and every one of her kids, struggling or not.
I inquired about the rough time the kids are having. She said it was hard to find a good paying job, and they were having to work jobs that only paid close to minimum wage. She had hopes that they could get a job with the new Proctor & Gamble factory being built. The boys were hoping to get a job there with higher pay and benefits.
This brought up another question. I wondered if the boys had health insurance now. She did not really know. She did let me know that the grandkids do get state insurance and all three were getting help with food stamps. I let her know that I am happy there is a safety net to help people like her boys who are trying hard to raise their kids. And that I hope they get those jobs at Proctor & Gamble.
The Valet – A Millennial with a Dream
Valet parking is not so easy with a motorcycle. When available I still like to pay for this service to assure my bike is confined in a safer location than the parking lot. However, it does not come with the added comfort of someone else loading and unloading luggage at the hotel entrance. Nor will the valet park and retrieve the motorcycle on demand. Valet parking on a motorcycle is basically self-parking at a higher price. It does provide an opportunity to visit with the valets, however.
In Burlington, we stayed at a small downtown hotel that always had one young valet attending the desk. The morning after our arrival, I mentioned to the valet on duty how clean his city was. Immediately, with a broad smile and a twinkle in his eyes, he said that the bars close at 3:00 AM and at 4:00 AM the city crews are out cleaning up the mess. I could tell quickly that he was a native of Burlington, so I asked him a little more about life there. First he said that the summers were short, as was his valet job. His real passion was driven by the long winter months. He spends the winter working with the crowds of people who ski, snowboard, snowmobile, and ice fish on Lake Champlain.
Like many millennials, he was single and lived with his parents. I was curious how that was working out. He let me know all was well, but he knows that living in his parents’ house will have to end sometime. For my generation, the choice of living at home in my twenties was not an option. If it had been available to me, who knows, I might have been just like this young guy.
He said his long-term dream is to own and operate his own company catering to the tourists he works with now. Because of that, he said he is taking some business courses to expand his knowledge. Some of us criticize the millennial generation as lazy without ambition. From what I can see, they have as much desire to take care of themselves and their families as we did. They have just been given the benefit of a longer timeline to make the transition to self-sufficiency, which most of us would have welcomed.
The Veteran – A College Degree on-line
No matter where or for how long we stop, there seems to always be a current or former motorcyclist wanting to visit and talk about riding. This desire to talk about riding introduced us to a Marine Veteran at dinner in Binghamton, New York. He mentioned he owned a motorcycle earlier during his active duty years, but sold the bike prior to getting married. He worked for a defense contractor and was in Binghamton to attend some meetings.
Because of this, I thought nothing of his working on his computer during dinner. I drew the wrong conclusion that what he was doing was job related. After more motorcycle talk, we learned that he was actually doing school work. Although working full-time, he knew that obtaining a degree would be the best way to earn a better living. So he was working towards a degree from Liberty University, all online.
This extra effort may have been partially driven by his wife, who is also a student. She is obtaining her PhD, although in the more traditional setting. He let us know that he had not decided on any academic major yet, but was happy just to take basic courses while continuing to work full-time. After more motorcycle talk, we parted ways.
Economic growth or decline is dependent on two items: the number of people in a society, and the productivity of those individuals. Adam Smith’s book, The Wealth of Nations, is recognized as the first of the great classics of economic theory, yet it was not filled with graphs or mathematical formulas. Instead it was written in easy to understand simple English. He explained the driving force of a society in just a few sentences: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from the regard to their own interest.” The individual “intends only his own gain” but is “led by an invisible hand” to promote the general good.
All of our stories may be simple, yet each shows that the desire for personal gain is alive and well in our country. And this desire assures us that our economy will continue to grow for decades to come. Because our democracy has given each of us the ability and freedom to pursue our own happiness with minimal interference, many of us have obtained the American Dream, just like the paint salesman. It also provides the freedom for those who are still in pursuit of obtaining that dream, like the young valet dreaming of a new business, or the Veteran who is able to pursue an education from anywhere in the world. And yes, there is even a little extra from our wealth that enables a safety net for the less fortunate, like the widow and her sons.
One final note. Kathy loved the ride and is ready for the next one. I wonder if any of her other favorite musicians are giving a concert in California any time soon?
Until next time,
Kendall J. Anderson, CFA
Kendall J. Anderson, CFA, Founder
Justin T. Anderson, President