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Wow. If you hate to sound nasty then why do it? That is a really ugly thing to write when so many people are losing their jobs and going without. While everyone should live within their means, does it really matter if they don't if you're doing what you're supposed to do? If I want to go nuts at the mall and drive a car I can't afford let me and you do you.
At the same time I would say that now that I'm without the credit cards I'm surprised how comfortable one can still be without going to the mall and traveling all the time. So I see the point but to say people should continue losing jobs and money is kinda mean.
No. It's not mean at all. It's reality. Yes, it DOES most certainly matter to society because when enough people start to default on their mortgages and credit cards it becomes much more difficult for the rest of us, even those with high credit scores, to apply for and be considered for our own mortgages, car loans, etc. Interest rates increase, burdening those of us who have been loyally paying our bills on time.
Take a retail store as a fine example. When one dishonest person steals a $100 item just after nine other people pay the $100, then the next ten honest people will have to pay $110 each so that the shopkeeper can recoup the $100 item that was stolen. You may continue to stand by the sidelines and say "It's none of your business if someone else screws up," but do you see how quickly it could become our business? If people in our instant gratification-oriented society can't learn to live within their means and obtain nice objects the old-fashioned way of working diligently and saving for them, then a SHOCK to the system might be just what they need then to start to re-examine their priorities.
You can't continue to live beyond your means just assuming someone else will bail you out.
Last edited by SteelCityRising; 03-12-2009 at 01:09 PM..
Reason: Unintentional Omission of a Word
I feel for the folks that are unable to pay for their homes because of a health issue or because they lost their job because of the economy. I don't feel bad for the folks that took option-arms/interest only/exotic loans so they can live in homes they couldn't afford using conventional loans. That second group of folks helped to create the financial climate we are going through.
My age/income rule is just a general rule. If you can make MORE than your age/hourly rate then of course that puts you in a better stance. Also 114k a year with children in this area is not out of the question. My buddy I mentioned does not make that kind of money and can still support his wife and 2 kids comfortable, as well as pay the mortgage on his townhouse. He doesn't live in the city, so you do have to sacrifice somewhere.
I grew up poor and my mom and dad both worked 2 jobs to support 4 kids. We immigrated to this country in 1989 and we've done just fine for ourselves. My parents worked very hard and knew how to save money, and they instilled those some values to their children. I work with some folks that can don't have health insuarance and don't put money into a 401k or IRA, yet they can afford to go out to eat at restaurants and make beer runs. I guess they think that SSA will kick in when they're old. I'm banking that SSA will not be around when I retire so I sock money away for my retirement. I'm 28yrs old, my vehicle I bought new in 2004 is paid for, my motorcycle is paid for, I own a 3bd/2bth house with my brother and I should be closing on a 3bd/2.5bth/1 garage investment property this monday. All this while living in NOVA and being single, if I had a wife with an income at my level we could do so much more. Yes NOVA is an expensive area to live in, but it is not unreachable by any means.
I think there are a lot of single people in Ffx co because of the tech corridor. I started in Arlington, then moved to Ffx to save money, then PW to do the same, then back to Ffx, now house hunting. It definitely has the family reputation but I think a lot of single people priced out of Arlington/DC or working out here end up here too.
The "standard" of living is high here. Everyone wants a big place in a trendy location, a nice car, cool vacations, much enrichment for the kids, and because so many people here have that, those who don't, and are living a perfectly reasonable working/middle class lifestyle are perceived as poor, and start to perceive themselves this way. People believe they can't make a good impression without a BMW.
This housing situation and general economy just suck, for almost everyone, but I think so many people/institutions are to blame. Like you, SB, I am a social liberal but am pessimistic about the bailout and its methods.
A lot has gone wrong. We spent an obscene amount on the war in the past 4+ years. Unfathomable. Without going into politics or whether it was worth it, that spending clearly had to come at the expense of domestic spending.
It was dumb of people to take the subprime loans, but many of those folks were trusting their "experts"--financial advisors, real estate agents, banks, etc that were pushing those. I see this as parallel to the "payday loan" type scam. The banks knew that lots of those buyers were going to default after the rate adjusted in 5 years or the first balloon and that they'd have to foreclose, they were just gambling that the market would be even higher at that point and they'd have gotten a good investment with interest. And they lost, and now they're being bailed out.
I'm house hunting now and my agent and loan guy keep encouraging me to spend 3x my stated budget b/c alledgely I qualify for it. Not sure we've learned . . .
I guess my point is that the housing market's disastrous sitaution is the "fault" of many, many parties, the only one truly being helped, for the most part, are the banks.
It was dumb of people to take the subprime loans, but many of those folks were trusting their "experts"--financial advisors, real estate agents, banks, etc that were pushing those. I see this as parallel to the "payday loan" type scam. The banks knew that lots of those buyers were going to default after the rate adjusted in 5 years or the first balloon and that they'd have to foreclose, they were just gambling that the market would be even higher at that point and they'd have gotten a good investment with interest. And they lost, and now they're being bailed out.
I kinda of think that's a cop out though. Ultimately, it's the buyer that is on the hook for the loan. No matter what someone tells you, it is up to you to verify. There is the news story on CNN where a Bus Driver and a Construction worker bought a house during the bubble for $800k dollars. Now the house is only worth $650k and they want help to restructure their loan. I make more than those two people combined, and I know I can't afford a $800k home. No matter how I run the numbers, it's not going to happen. For someone to actually believe they could have afforded that home on their salaries, is astronomically stupid. The reason of "I didn't know any better" doesn't cut it. There's the saying, "You can lead a horse to water, but you can't make him drink". I think that saying is a different reference, but IMO works in this case too.
Your right though that the only ones really being helped are the banks. This housing bill is going to help some, but out of the ones that do get helped I'm sure a large portion default on their loans anyways. I had read a statistic that more than 50% of the folks that had a loan modification later defaulted on the loan.
I wonder if any of these people who believe they were deceived into signing for a mortgage that they were unable to afford will start filing malpractice law suits against their mortgage consultants because they heavily relied upon their expertise and industry insight to make this erroneous decision? If you can sue an accountant, lawyer, doctor, and a host of other professionals for malpractice, then why not mortgage brokers or consultants as well?
I'm with oneasterisk on this one too though. I likewise know of dually-employed couples whose salaries are less than my parents' annual income of $80,000 who reside in ostentatious $500,000 McMansions near me. Why they thought they could purchase a home with a list price 7 times their annual household income is beyond my realm of comprehension.
I wonder if any of these people who believe they were deceived into signing for a mortgage that they were unable to afford will start filing malpractice law suits against their mortgage consultants because they heavily relied upon their expertise and industry insight to make this erroneous decision? If you can sue an accountant, lawyer, doctor, and a host of other professionals for malpractice, then why not mortgage brokers or consultants as well?
I'm with oneasterisk on this one too though. I likewise know of dually-employed couples whose salaries are less than my parents' annual income of $80,000 who reside in ostentatious $500,000 McMansions near me. Why they thought they could purchase a home with a list price 7 times their annual household income is beyond my realm of comprehension.
Funny you should mention this--I read this article today (the second half is along the lines of what you're talking about).
BTW, I agree with you about living beyond your means. It becomes my business when my tax dollars are bailing people, banks, etc. out as I'm living well within my means. I'm tired of subsidizing irresponsibility.
BTW, I agree with you about living beyond your means. It becomes my business when my tax dollars are bailing people, banks, etc. out as I'm living well within my means. I'm tired of subsidizing irresponsibility.
Thank you. That's exactly my position on these incessant multi-billion dollar "bail outs" as well. I work hard for my money. I pay my taxes in good faith, hoping, of course, that our elected officials will use those revenues to benefit society. When my dollars are going to pay for people (or businesses) who got in over their heads, then why should I be happy about that?
So, we are looking 50/50 between single and dual income. Fairfax County median salary for 2007 was $105,241.00 while Loudoun County was $107,207.00. Does that mean the median salary is a dual or single income?
Arlington County for the same year was $94,876.00.
[quote=ScranBarre;7851420]No. It's not mean at all. It's reality. [quote]
Yeah that's reality but to WISH harm to someone like that still is a pretty heartless statement. And wishing for the recession to actually get worse is wishing harm to someone.
On the other hand, my opinion is that some people who really did make a mistake with their mortgage but can afford to pay a reasonable mortgage should have their loan restructered. They still have to pay the darn thing off just lower payments. Some people like a maid they talked about in the paper making $24,000 a year but getting a $400K house they should just let it go.
I don't think it's that black and white. There are some people who were truly tricked or truly made an honest mistake and could afford their home if the terms and interest rates weren't so bad. Then there are some who bought a house they knew they couldn't afford but got it anyways. I'm not going to be ugly and say they should starve on the streets but they should be forced to move to something they can actually afford.
Now there is the idea that bank sizes should be limited so this doesn't happen again. Although limiting growth don't know if I can get onboard with that. There is no easy answer is there?
As far as dual income which was the original topic, I'm single and doing alright in Fairfax county. Would I like to find a place closer to the city? Sure but the only places close to the city that I seem to find in my price range are dumps. Meanwhile Oakton is both nice and in my price range. The thing I've learned about living in the DC area is that you have to make sacrifices somewhere. You either sacrifice money, commute, space or quality of living. Unfortunately you can't have it all, at least not within a 50 mile radius of DC. Especially if you're single. The worst is talking to someone who does live closer in and they're oh you live so far out blah blah blah and I'm thinking to myself yeah I'm 30 minutes from the city and my place is nicer and cheaper than yours. Some people can be such haters.
Well I can see someone wanting to aspire to this and that. My goal is to have a range rover. That's my dream. I know I should say something like be ceo or home ownership but no I don't care if I own or rent as long as I have a roof over my head. I hate it when people say oh you're throwing money away on rent. How is that? Im' not homeless isn't that more important? Maybe the mortgage mess was caused by the idea that houses are investments for profit like stocks versus a place to call home and raise a family.
I hate it when people say oh you're throwing money away on rent. How is that? Im' not homeless isn't that more important? Maybe the mortgage mess was caused by the idea that houses are investments for profit like stocks versus a place to call home and raise a family.
In a transient area like NoVA it truly makes much more sense for many to rent instead of purchasing their own home. I don't foresee NoVA being my "permanent" residence by any stretch of the imagination---too much urban sp-r--a---w---l (and those who love that lifestyle). I'm probably going to just live in NoVA until I have my MBA, CPA, (perhaps even Ph.D. in Accounting) and a nice nest egg. By 30 I'll relocate to our Pittsburgh branch office, perhaps buying a nice older home outright in Squirrel Hill.
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If you can sue an accountant, lawyer, doctor, and a host of other professionals for malpractice, then why not mortgage brokers or consultants as well? 
