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Pawn shop smarts

A pawn shop sign. Comedian and commentator Tim Bedore says the pawn shop is also a good place to go to learn some important lessons about personal finance.

My 14-year-old daughter announced the other day that she plans to be smart about money like her mom and dad. I didn't tell her that my wife and I aren't so much smart about money as we are cheap. But I did say, if you want to be smart about money go to a pawn shop, see what they've got the most of and never buy it. Almost by definition, everything you see in a pawn shop represents a mistake of some kind.

I thought of this because while waiting to get my tired rotated last week, I wandered into a pawn shop and from what I saw if you buy a bass guitar you are going to have financial trouble.

This pawn shop had 32 guitars, 22 were basses. I'm no psychologist but my guess is because women go for rock stars at least 22 guys figured -- I'm not really musical, I can't play guitar but maybe I can play bass. There's two less strings, how hard can it be?

There was also every iteration of every device Apple's ever made: Macs, iPods, iPhones, iPads... literally a hundred Apple products. It would appear Apple users are only happy when they have the latest version of everything from the Apple store but that also means they're going to have lots of old versions to sell.
 
And then there were all those DVDs -- aisles and aisles. When you bought that Adam Sandler movie did you really think you were going to watch it over and over again? How many times do you need to see "Spanglish?"

So, I came home from my free tire rotation, which took about 90 minutes because free means waiting -- another economics lesson -- and told my daughter about what I saw at the pawn shop and I told her if she wants to be smart about money steer clear of DVDs and boys with bass guitars and certainly don't covet everything Apple puts out, just get what you need. I told her that while holding up my seven-year-old iPod classic that still works fine.

And she shot back "Dad, how much do they want for one of those bass guitars? I have lunch with a really cool guy at school who thinks he should be in a rock band."

I don't know if my 14-year-old daughter is going to be smart about money, but she is already smart enough to know how to send her dad into a panic.

About the author

Tim Bedore is a father and stand-up comedian based in Minneapolis.
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I searched in all the pawn shops from my region for an acoustic guitar but could not find any, a salesperson from a pawn shop told me they are much appreciated and no one wants to give them away. I needed badly a guitar for my cousins birthday and I bought one from http://www.luthierscollection.com/acoustic.php, he was very happy when he saw it and told he will take care of it and never give it away, maybe his kids will want to learn to play it.

That is not how pawn shops work. They are places of short term loans based on property. you bring in something of value, like a bass guitar, and get a loan of money for some part of the value. (often half of what the owners thinks they can sell the item for) You have a set time to pay back the loan or you give up the collateral item. The pawn shop then sells the item. This is not like a second hand store or good-will. They are not going to buy junk they do not think they can sell. That there are 22 bass guitars tells me they do sell them because they would not take them as collateral if they could not. (Likely to 15 year old boys trying to impress 14 year old girls?)

Pawn brokers make their money off the fee charged for the loan and the sale of collateral on items not paid off. They prey off the lowest income people in desperate need of cash but who are blocked from the check cashing companies. (some states limit the number of checks you can cash per year, or people who don't have bank accounts)

Many times you find lots of items in the pawn shop because they are not legally obtained by the person who brought them to the pawn shop. St. Louis Mayor Slay has called for a national law to fight the crime of steeling iPods, iPhones, iPads, and other Apple products. (http://stlouis-mo.gov/government/departments/mayor/news/Mayor-Alderman-p...) Mayor Blooberg of NYC claims NYC's increasing crime is due to Apple products and echoed Slay's call for federal laws preventing anyone from selling second hand iThings with out being put into a data base.

The pawn shop owners, like to live in that gray area of "following the law" but taking for sale things that a reasonable person would question as being stolen property. But hey, when you're looting the pockets of the poor, why care about things like that.

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