Jay Leno: This is How to Stay Out of Debt

NBC "The Tonight Show" comedy host Jay Leno was the funniest comedian of the three plus comedians who tried to carry a late-night talk show. He was witty, mocked both sides of the aisle, stayed away from embittered political punditry. He also relied on submissions of funny photos from the audience. Having watched some of Johnny Carson's segments from previous broadcasts, I think that Leno was funnier than Carson.

When Leno went among the public to question them about basic current events, he poked fun at their lack of knowledge, but never trashed them or made them feel about themselves. He made fun, but he wasn't cruel or bitter. At the beginning of every show, Leno reached out the audience and connected with as many of them as he could.

And he was a tireless worker. He did a nightly return at the Comedy and Magic Club in Hermosa Beach to make sure that he stayed fresh and vibrant. His temperament on screen and off indicated that he had a centrist, perhaps even conservative leaning mindset.

Lo and behold, the way he managed money in his private life, from his first career to the present, suggested a strong fiscal discipline which all of us could learn from.

CNBC reports:

Jay Leno never carried debt, even before he was a big earner. He stayed out of the red thanks to one simple strategy: He didn't buy on credit.

"I rarely used credit cards," the comedian tells CNBC Make It. "I didn't buy anything I couldn't afford to pay for in cash. I always liked, 'Here is the money, give me the thing, transaction over.'"

Makes sense. Don't get into a habit of going on credit if you have the money to begin with.

Leno started his career with a minimum wage job at a McDonald's as a teen. A few years later, when he was jump-starting his career as a comedian, he had to supplement his comedy gig earnings with money he made working at a car dealership. At first, the paycheck from the dealership was the bigger of the two, so he banked that and lived off the other.

He started hosting "The Tonight Show" in 1992 at age 42, a job that reportedly earned him as much as $30 million a year. But even today, he prefers not to pay for anything in installments, he tells CNBC Make It: "When you own something and you don't have to write checks every month, you're just better off."

This conservative philosophy gives him financial peace of mind. "I own everything. I own my buildings. I own my cars. That way, if it ends tomorrow, I know what I've got," says Leno, who now hosts CNBC's "Jay Leno's Garage." "It's a little old fashioned, I suppose, but it seems to work pretty well for me."

When you're getting started as an independent adult, it's important to establish good credit — that will allow you to make larger purchases in the future, such as a car or a home — and one way to do so is by opening a credit card. The good news is, if you stick to a few basic guidelines, you can easily use one without going into debt.

But if you find yourself not making payments in full, or if you have already racked up credit card debt, Leno's cash-only solution may work for you.

There's more to the story. Where did Leno learn these habits?

From this parents, who had survived the depression. They knew what it was like to live in dire poverty, and not know when they would get out of it. A generation of Americans died with all their life savings saved in mattresses in their homes because they had lost all their money when the stock markets crashed in 1929, and then financial liquidity dried up all over the world because of bank runs and government meddling.

Leno's parents taught him to live frugally, turn off the extra heat, electricity, etc. These habits are good to build upon. Leno has a thriving business, life, practice, everything. He has done quite well for himself, one could say.

Stay out of debt, pay with cash when you can, work, save, invest, and live well.

Sears Takes the Shears, Sheds More Stores

The Department Store is falling on hard times.

Not just specific brands and companies, but the very concept of a brick and mortar place to shop and purchase goods--that is falling on hard times, too.

The ability to purchase items on the Internet--and for less--has overtaken driving to a local store.

What has made it harder for these business outlets to compete and stay in business?

The last casualty of the rapid changing economy?

Sears.

From the Associated Press:

Sears will close another 72 stores as sales shrink and losses grow, an announcement that has become a familiar refrain as the company retrenches.

As shared above, this is a growing problem for department stores across the country. I have spoken with Torrance City Councilmembers, and they fear the worse regarding the sales tax base generated by the Del Amo Mall.

They already know about the one Sears departments store, along with the automotive section, which are both facing hard times.

The beleaguered retailer, which operates Kmart and Sears stores, said it has identified about 100 stores that are no longer turning a profit, and the majority of those locations will be shuttered soon. Two stores are in California — a Sears at the Puente Hills Mall in City of Industry and a Kmart in Kern County.

Right now, two stores in California have landed on the chopping block. How many want to guess that the rest of the stores will shutter by the end of the year?

After this round of closures, the company will have about 800 stores, down from about 1,000 at the end of last year and far below the 2012 peak of 4,000 stores.

RETAIL JOB CUTS

They’ve cut to the bone in the retail industry, Bloomberg reports.

Data from Challenger, Gray & Christmas show closings have led jobs cuts by reason so far this year with the outplacement firm tracking a total of 2,565 shuttered units.

Brick-and-mortar closings have been responsible for 35 percent of announced job cuts across all industries, up from 23.6 for the same period last year.

The problem lies on more than the shifting technology. The forced wage hikes in blue states, combined with the regulatory burdens, have forced retailers to cut costs everywhere, and in many cases they have to cut their operations completely.

Bankruptcies are also taking a more prominent role this year, accounting for 14.6 percent of job cuts versus less than 2 percent in the first five months of 2017, the Challenger data show.

In May alone, the number of planned job cuts across all industries slowed, falling to 31,515 — the lowest since last October, according to Challenger.

There's some good news, and I think that President Trump and the Republican Congress deserve thanks for that.

Sears also posted a quarterly loss of $424 million and said store closings already underway contributed to a drop of more than 30 percent in revenue. That marks the more than five years of straight quarterly sales drop, according to FactSet.

OUCH! Of course, department stores do not have to suffer like this. They can learn to change and adapt with the times. One report indicated that JC Penny did exactly that, and their profits improved. Grocery stores are adopting and adapting their app programs

Sales at established stores, a key gauge of a retailer’s health, tumbled nearly 12 percent, down 9.5 percent at Kmart stores and 13.4 percent at Sears.

Rob Riecker, Sears’ chief financial officer, said in a pre-recorded call that the company’s stores are “a critical component in our transformation.”

Critical in that they are about to be closed down? UGH

But to meet customer needs and improve financial results, Sears must close poorly performing stores and “focus on our best stores, including our newer smaller-store formats,” he said, according to a transcript of the call.

Smaller stores require less overhead. What will they showcase?

The latest closings underscore the deep-rooted problems at Sears, which was once a one-time powerhouse retailer that survived two world wars and the Great Depression but has been calving off pieces of itself as it burns through money.

A company does not have to "burn through money". What current financial practices are hurting the store at this time?

“The demise of Sears has felt like a prolonged, drip, drip, drip as evidenced by the string of quarterly sales numbers,” said Mark Hamrick, Bankrate.com senior economic analyst. “Essentially, it has been injury by a thousand cuts, whether by failing to staff stores to provide customers with good experiences or by failing to stock better quality merchandise in its stores.”

Well, there you have it. Two key problems: bad service and bad goods. 

Chairman and CEO Edward Lampert, who combined Sears and Kmart in 2005 after helping to bring the latter out of bankruptcy, has long pledged to save the famed retailer, which started in the 1880s as a mail-order catalog business.

That's why the sudden crashing and burning of Sears is just shocking and sad all at once. How is it possible that a company which lasted for more than a century cannot find new, better, innovative ways to overcome the last tech and marketing fads and developments?

What kind of leadership is heading the company now? It seems to me that the thought processes are more invested in just hanging on barely rather than taking firm stances to cut the fat, trim the red tape, and get back to basics.

But the stores have remained an albatross. And Kenmore, the retailer’s renowned appliance brand, became the latest potential sale after ESL Investments, the company’s largest shareholder, headed by Lampert, said it might be interested in buying it.

Sears also has made deals with Amazon. The company announced recently that shoppers could buy any brand of tires on Amazon.com, have them shipped to a Sears Auto Center and then bring in their car to get them installed. Amazon began selling Sears’s Kenmore brand of ovens, washers and other appliances last year.

There is hope.

Shares of Sears Holdings Corp., based in Hoffman Estates, Illinois, fell 12 percent, or 40 cents, to $2.81 on Thursday.

Final Reflection

The decline of the corporate department store model may not end in tragedy. Some companies are learning to bring in the technology, merge with online store brands, and work around the excessive costs and regulations of certain state governments.

However, cities like Torrance and other Southern California locales will find more ghost-town department stores if residents and locally elected officials don't take a strong stance to stop the left-wing, anti-business madness of the current government leaders.