Living beyond your financial means

alex8.5 · 05-02-2008

[quote=njqt466;1453509]

Quote:

Originally Posted by alex8.5

You don't understand because you are rich, possibly even wealthy.

You own two homes when approximately a million people nationwide are in foreclosure. This means they can't even afford one roof, let alone two, or "investment properties." Methinks your view is somewhat skewed.

I have had MAJOR DEBT in the past. I stupidly refused a loan from my parents and worked two sometimes three jobs in an attempt to pay off my credit card debt. At one point, about 10 years ago I even moved into a tiny but cheap studio apartment so I could double up on some payments to pay off the debt faster. In spite of this I was still forced to claim bankruptcy three years ago.

I currently have no credit cards or credit card debt. I do however have over $110,000 in student loans.

To be honest, I still don't trust myself with them. I either pay cash or I save for more expensive items.

Uhm, you have a business manager?

Dude, it's easy for you to be judgemental; because you are NOT the average American!

I am a recovering shop-a-holic. My parents taught me nothing about money or how to handle it. I have made bad financial decisions in the past.

I own that. Yet, I am not so far removed from the average citizen that I can't empathize or understand how quickly debt can accrue. For many people all it takes is one major auto repair bill, or emergency room visit, and voila, credit card debt!

I am really not far removed from the average American. 25 years ago I was a struggling writer, with debts of $152,000.00. (student loan and credit card). I worked any job I could get to reduce this, and at some point I decided to live in my van so I would not spend on rent. At the time my only luxury was a cell phone, because I needed to be reachable by my agent. I was trying to sell my first novel. I spent two years doing re writes, before the publisher offered me a contract. After the book was bought and i got paid and royalties started coming in a year later, i was still in debt by almost $100,000.00.

So, yes now I'm rich, I have more than I'll ever be able to spend, but there is always that part of me that is scared of being in "the hole" again. So I don;t spend on garbage. I give to friends and family, and the Humane Society. Every month I go over my holdings with my business manager because it's my fear and my relief to know I'm O.K. this month. It's psychological I know. My B/F thinks it's "cute", but he's never been without.

I too refused a loan from my parents, wanted to do it myself. I applaud you for not taking money from your parents. You did what you had to do, it's a struggle and you will get through it.

Please keep in mind, just because I have money now, does not mean I don't know that people are struggling. I just don;t get it when i see people buying that case of beer, or the smokes or the CD or DVD, but they can't pay the phone or medical insurance or the kids goes to school without a lunch, but yet, they have a big screen tv, they charge on a credit card to see a movie.

Possibly over the years my views have become skewed. I live in a nice neighbourhood, have nice vehicules and travel in style. Not all my friends have a great deal of cash, yet when I go to see them, some of the homes ( they own) are in need of some really major repairs, and in the parking spot is a luxury SUV, but they have a $15,000.00 entertainment centre. I'm not judging them, but it seems to me the priorities are off. A home is the biggest purchase most of us will ever get, take care of it, instead of a buying a nice car.

I was not jidging it was simply an observation. I also will not apologize for having what I have now, because I think I've paid my dues.

Thanks for listening

alex8.5 · 05-02-2008

Quote:

Originally Posted by simcha

Yeah, you know? The OP has a business manager and a second home. Yeah, something tells me that you've never had to face financial hardship. It's easy to be up on a financial pedestal when you are more well-to-do that most people.

That being said, some of us working poor actually have to stretch things to get by sometimes. I don't consider the two failed heart surgeries I had almost exactly two years ago luxuries. They were necessities. But on my meager pay working for a non-profit in a profession where you must have a masters degree, I was unable to pay my copays and premiums right away. I'm still paying on the balance I owe to my doctor. I have $175 left. I owed well over $1000 that I didn't have.

Oh and there was that surprise root canal with crown to save a molar that I had to have at the end of last year that cost $650 that I didn't have.

Oh and there's the heart medicine that I must take in order to keep my heart at an average rate so I can do my lousy paying job helping homeless youth that rich bastards don't care about at all. This ain't no luxury at all.

And I have a car payment because I need a car for that lousy paying job with the insurance and the gas and the maintenance. These aren't luxuries because I need them to do my job. Does my agency help with these expenses? Hell no! Rich bastards have taken away most public assistance for mentally ill homeless youth so we get paid shit to deal with the mess the rich bastards created when they cut funding to help mentally ill youth. The rich bastards build gated communities to escape and ignore the "throw away foster children" who are wards of the State who graduate at 18 with no benefits so that it's impossible for them to continue an education or get jobs that pay a living wage.

Oh and there's the ever increasing cost of food which is a result of the fucking rich bastards who are in the oil bidniss who have driven the cost of fuel and fertilizer through the roof and are making record profits. We working poor can't keep up with that.

Then there's the cost of housing which is still highly inflated because rich bastards who own banks wrote suicide loans for the working class so that they could be enslaved to higher and higher prices and eventual foreclosure. Yet the rich bastards who own the banks get government bailouts (corporate welfare) and walk away with their fortunes so they continue to be rich bastards. Meanwhile the rich bastards in power refuse to lift a finger to help the working poor who are stuck without shelter and buried in debt while the rich bastards run away from the mess to their gated communities cackling all the way home.

Yeah and then there is the predatory lending practices that rich bastards engage in to ensare working class youth in debt that the youth can't possibly understand because the rich bastards have taken so much money away from public education that the working class who must go to public schools can't learn basic math.

So, the rich bastards then look down their noses at the working class and cynically call the working class stupid and irresponsible. Meanwhile the rich bastards have rigged the system to perpetuate the mess so that the rich bastards can retire in style.

Ah, don't you love America?

I sincerely hope your feeling better and recovering. I never meant to offend anyone with my words.

DeeBlackthorne · 05-02-2008

One thing that rich people will never have, regardless of their money, is a good way to shirk self-satisfied feelings of entitlement. I think people that come from less have that much more potential to be grateful. While I think Alex's story could easily arouse some envy, I still think it speaks to an American dream that a lot of well-intentioned people aren't going to come across in their lifetimes.

Let's just call it for what it is. You got your break in life, Alex. You struggled for a while, but you turned out pretty well, maybe even exceptionally so for being writer. You probably have less room to fear a financial catastrophe. People like NJ and Simcha and myself and others on this board have turned out okay, too. We're not starving or homeless, but we're perpetually financially uncomfortable; we're dancing on a much finer knife's edge. It must feel wonderful not to have to worry, but that probably gels with a much smaller proportion of people in our country.

At the end of the day, I have to work multiple jobs. Even if I can't stand my day job. Even if the tips don't come rolling in. Even if I'm scared shitless about that unexpected car repair or the hospital stay. Underemployment is more chronic a problem than someone's need for consumer escapism. (That said, if all you have to show for doing well is a nice TV, then you're going to adore your TV.)

One thing I clearly hate about America is that individualism is still seen as this necessarily and helpful social framework. Because, really, if people would just pull themselves up: We could eradicate poverty, all of a sudden having enough gainfully employed jobs; we could will our way out of addictions and up into Heaven; we could make every dollar stretch; we could dump our elderly family members into hospice without a moment's hesitation; we could just get the fuck over things; we could pursue wealth even to the detriment of other quality, nonmaterial measures in life without feeling guilty; we could have cake and liposuction; we could all feel like we have something equally helpful to contribute to society, or at least pretend as such.

becominghorse · 05-02-2008

Quote:

Originally Posted by DeeBlackthorne

One thing that rich people will never have, regardless of their money, is a good way to shirk self-satisfied feelings of entitlement. I think people that come from less have that much more potential to be grateful.

Dee. I see what you're getting at, and it definitely proves a kindness of heart, but I don't think 'rich people' are all alike any more than poor people, even in terms of their 'sense of entitlement'. Do agree, however, that it is common enough among rich people to be an identifiable phenomenon. My point only--in that syndrome, they want anything BUT to shirk it: The sense of entitlement is what it's all about in those cases, and they are not concerned with gratitude. Of course this incurs 'soul loss', etc., but at that point that is the least of their worries.

Quote:

It must feel wonderful not to have to worry, but that probably gels with a much smaller proportion of people in our country.

Except don't forget that people worry about money no matter how much they have, it just has a different emphasis. Alex's story is a good one, but not quite accurate about buying unnecessary things. A first house in a nice part of Los Angeles is very nice if you can afford it, as is a second house if you can, or 7 or 8 if you're Barbra Streisand--but in none of these cases are these truly necessary.

So much of it seems to be luck. I'm lucky in having low overhead despite all and living in one of the nicest parts of New York without having to pay much (unlike many on this and other internet boards, I'm not giving specifics about my money.) I also have always been basically a bachelor, so the responsibility of children I never have to think of. I also never feel the need to have the best seats to the performances I attend, happy with the 4th ring, I don't have a car, I like to live simply, but it is true that I think getting to live in the middle of a big city in reasonable ease is a privilege even if I don't have a lot of cash. I've just never needed it.

So there really is something to 'being rich in other ways than money.' I have had periods in which I've had large amounts to spend on luxuries, but I didn't do it even then unless it had to do with my own work (which is also writing, by the way, but I'm not the commercial success at it that Alex is. Even so, I'm pleased with the books I've published.) I don't get any pleasure out of being profligate with money. much preferring Dick Profligacy, at which I am very adept. If you've got a huge debt as njqt describes, that's hard to live with because seems insurmountable sometimes, but I'm sure she'll figure out how to pay it down. I carried my student loans for 20 years, which is way too long, but I did pay them off at last. Of course, people do go under, and with credit cards, just as with mortgages, people do have to realize that teaser rates really don't last--this is the worst. Anything above 3.99% APR is bad if the balance is sizable, you're paying off very little principle. But wealthy people get all the diseases and other inconveniences of life, even though it's obviously true they can buy better treatment and do live longer by and large. Absence of socialized medicine in this country is grotesque, but the same 'lack of gratitude' goes into that. I've noticed during the Bush administration that people not only don't want to help less fortunate people themselves, it is even worse--they dont' want anybody to help them. Hence, making Medicaid more and more difficult to get for poor people, Bush's attempt to essentially get rid of Social Security (thank God that failed), etc.

visualalert · 05-02-2008

Some interesting perspectives here. Seems like people who can't get their hands around their finances are brimming with hatred for the "other" (those rich bastards), their country (one think I clearly hate about America), society in general. Lots of bitterness. Envy and hatred are sad ways to go through life.

And those who've figured out how to live within their means...or figured out how to improve their means instead of blaming others for their situations...
counsel what they've discovered works: save more. Spend less.

But as the classic line from Caddyshack said, "the world needs ditchdiggers too!"

DeeBlackthorne · 05-03-2008

Quote:

Originally Posted by becominghorse

Absence of socialized medicine in this country is grotesque, but the same 'lack of gratitude' goes into that. I've noticed during the Bush administration that people not only don't want to help less fortunate people themselves, it is even worse--they dont' want anybody to help them. Hence, making Medicaid more and more difficult to get for poor people, Bush's attempt to essentially get rid of Social Security (thank God that failed), etc.

I think we took some divergent paths, but you're right; we agree quite a bit. My cultural problem with the situation is that we continue to foster a false sense of independent individualism and entitlement anyway, quickly eschewing positive emotional values like gratefulness or understanding, let alone group values like interdependence or togetherness. The have-nots are already at a disadvantage. Why continue to inflict barriers, embargoes, and obstacles to make things all the more dire? And for that matter, if the numbers reflect disparities, then why turn up a nose and start blaming? If you don't have it, then you can't seemingly buy your way out of it either.

I think it breaks down like this. Gas prices, the housing market, health care -- the way current trends go, you'll have two incredibly basic responses. Those who have not will disproportionately suffer more in their quality of life. The Simchas of the population will continue to face compounded ripple effects that impact job security, access to transportation, health care, real income, and so on. Those who have more; well, they too may pinch, but not nearly on the scale. It may cost them a large purchase down the road, delaying a personal project, or having to cash in some investments to make up the difference. But overall, who is going to turn out more fine than the other?

Not everyone turns up a nose in the same way. I don't mean that. But as a class of people, you clearly have those that can weather the financial crisis and turn out fine, and then there are those that through providence, luck, will, or what have you, can only hope to tread water at best. And while the Bear Stearns of the population get first and best access to proverbial life jackets and inflation tubes, your blue-collar family is going to continue to wring their hands.

Since we've referenced health care, here is the Wikipedia debate on the topic of health care reform in the United States.

simcha · 05-03-2008

Quote:

Originally Posted by alex8.5

I sincerely hope your feeling better and recovering. I never meant to offend anyone with my words.

Dude, honestly, you personally didn't offend me. It's simply the parroting of the attitudes and beliefs the priveleged class that offends me.

Working with people on the lowest rungs of society has opened my eyes in ways unimaginable.

I hope that one day the swelling lower and upper middle-classes get angry enough to take their power back and organize against the rape that is perpetrated on them by the 1% to 0.5% of the country that is actually in power right now.

simcha · 05-03-2008

Quote:

Originally Posted by visualalert

But as the classic line from Caddyshack said, "the world needs ditchdiggers too!"

And ditchdiggers deserve living wages, healthcare, and the opportunity for a decent and dignified retirement.

It's time the rich bastards learn who really does all the work that keeps the money flowing into their coffers. They need to be shaken up to realize that they should treat their workers not like serfs, but like actual human beings. Until that happens they are merely rich bastards.

hootie · 07-12-2008

Tis a gift to be simple, tis a gift to be free.

I own credit cards but pay them off at the end of the month. I use them for gasoline, travel, and sometimes big ticket items. I try to pay them off at the end of the month, or as quickly as possible. I don't have any debt.

I learned a valuble lesson years ago. I was injured and unable to take care of things like I had before. The less I own, the more time I can spend living life. I just don't need a lot of stuff to clean or maintain.

hootie · 07-13-2008

What things are you doing with your incentive check? I have sent part of mine to fulfill a charitable plege I made, and the rest is going to a local non-profit radio station.

Jason · 07-13-2008

Interesting first post, and interesting too to see how angry some of the replies are.

Right now I'm debt free. I've paid for my home, and have a (small) financial cushion. I've got there through being born in the first world (UK), through hard work, through being willing to do some pretty dire jobs overseas, through luck, and through more hard work. And I don't have a wife and kids to support.

Right now I'm in the middle of a career change, like the initial poster to a career as a writer (but non-fiction). I haven't had my first royalty cheque yet. Each month I'm just about breaking even. As I don't want to dip into my safety reserve I'm being a bit frugal. It's not all roses, but I sure count my blessings that I can do it.

Keeping debt free is essential for me. The stress of debt with an irregular income would be a bridge too far. I'm very sorry for people who are in debt. Many are there because of circumstances, many because our society does its best to get us into debt, and some through simple stupidity. If you can get out of debt it is a great feeling. But getting there means making sacrifices - going without, doing gritty jobs, all the grind. If you can possibly do it, do it.

transformer_99 · 07-13-2008

Quote:

Originally Posted by hootie

The less I own, the more time I can spend living life. I just don't need a lot of stuff to clean or maintain.

So true, the less junk we have in our lives the better. But where would the economy be without this junk or even those spending beyond their means ?

hootie · 07-13-2008

It would be crumbling just like it is now. This country would have to go back to being innovators, and big time manufacturers.

StapledShut · 07-13-2008

Sometimes (oftentimes, really), it's more a matter of need-it-now than want it now. Unless you have the means to save up 100 - 500 thousand dollars, you're going to have to lease your home. That counts as debt. Same goes with a car, but to a lesser extent. Even just paying the current bills and with minimal extravagances, many people have trouble saving up enough money to buy a car that isn't some "Bubba's Used Cars" junker. That also counts as debt.
And with the way the economy is, businesses are suffering just as consumers and individuals are. If sales are down or the cost to do business rises, often because someone further up the line is going through the same thing (vicious cycle there), they're going to minimize labor costs either by cutting hours, cutting pay or cutting employees. If you need $1600 a month to make ends meet (I know some people would love if it was that low), and suddenly you're only making $1400 at your job that was bringing in two grand, you're going to fall behind.

Shit happens, and it makes more shit happen.

Living beyond your financial means

[quote=njqt466;1453509] Originally Posted by alex8.5 You don't understand because you are rich, possibly even wealthy. You own two homes when approximately a million people nationwide are in foreclosure. This means they can't even afford one