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I don't particularly like Elizabeth Warren or agree with everything she said in the book. But the fact is, most 2 income couples DO buy a house based on both incomes. I don't think it's smart. But it is a fact.
Buying a house and having a family are what most young couples have been about for a long time. In mortgage terms, what difference would it make if their combined incomes were 100% from X versus 50% from each of X and Y? Unless one is irrationally cowering in a corner over fears of impending attack by the Divorce Bunny, it would be NOT putting total resources to use that would make no sense.
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Originally Posted by mysticaltyger
The book was called "The Two Income Trap". While Warren does play the victim card a bit too often for my liking, it did have a lot of practical information in it. The odd thing was that I pretty much figured this stuff out when I was 20 years old circa 1990 that 2 income couples just inflated the cost of housing because they bought based on 2 incomes. I thought this was self evident to everyone and was surprised anyone needed someone to write a book to tell them that. But I've learned as I've gotten older I am the oddball in these matters.
Let's consider in the 1970's stagnating paychecks in the face of accelerating inflation from too much Vietnam and two oil shocks. Let's consider also that women have at last made their way into higher education and are now poised and eager with their new degrees for full-time employment. Warren notes in her book the utility of a non-working spouse in being available to work as circumstances might warrant. She cites a time in her own family history when her Dad was laid off and her Mom was able to take a department store job to help tide them all over. Why in the world would young couples since not face the same sorts of challenges by doing the same sorts of thing?
Buying a house and having a family are what most young couples have been about for a long time. In mortgage terms, what difference would it make if their combined incomes were 100% from X versus 50% from each of X and Y? Unless one is irrationally cowering in a corner over fears of impending attack by the Divorce Bunny, it would be NOT putting total resources to use that would make no sense.
Let's consider in the 1970's stagnating paychecks in the face of accelerating inflation from too much Vietnam and two oil shocks. Let's consider also that women have at last made their way into higher education and are now poised and eager with their new degrees for full-time employment. Warren notes in her book the utility of a non-working spouse in being available to work as circumstances might warrant. She cites a time in her own family history when her Dad was laid off and her Mom was able to take a department store job to help tide them all over. Why in the world would young couples since not face the same sorts of challenges by doing the same sorts of thing?
If the man is making 100% of income why would he need the wife except for minuscule tax benefits?He could just buy the house by himself and live a playboy lifestyle like Howard Hughes/Hugh Hefner. It definitely doesn't match the rate of risk from divorce + alimony
If the man is making 100% of income why would he need the wife except for minuscule tax benefits?He could just buy the house by himself and live a playboy lifestyle like Howard Hughes/Hugh Hefner. It definitely doesn't match the rate of risk from divorce + alimony
I would suggest that you are definitely not understanding the dynamics at work here. Start with an assumption that everything should be monetized.
I'm cohabiting but we'd be better off married for tax purposes. Also it would be nice to carry him on my health insurance. Plus, if something happens to one of us, our kids could cause problems, not that they would.
I think senior citizens on fixed incomes can lose some benefit$ if they get married.
I'm cohabiting but we'd be better off married for tax purposes. Also it would be nice to carry him on my health insurance. Plus, if something happens to one of us, our kids could cause problems, not that they would.
The dynamics of marriage vs. cohabitation are considerably affected by the advent of children. Really, the operative question is whether two child-free single professionals ought to marry or to continue cohabitation, and to what extent this question is financially-driven.
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Originally Posted by Perma Bear
You can quantify the risk of alimony and child support
The point, I think, is that not all of the elations or travails of life can be assigned a monetary value, or reduced to mere calculation.
You can quantify the risk of alimony and child support
You can also minimize it by not being or behaving like a boor. I'm already 46 years happily hitched myself, and if I had it to do over, that''s where I'd start off once again. It's amazing what the payoffs are in life simply for not being a jerk.
The dynamics of marriage vs. cohabitation are considerably affected by the advent of children. Really, the operative question is whether two child-free single professionals ought to marry or to continue cohabitation, and to what extent this question is financially-driven.
The point, I think, is that not all of the elations or travails of life can be assigned a monetary value, or reduced to mere calculation.
Isn't that why dumb hipster metrosexual techies who got really lucky with their private start up stock pay 1 million dollars + for a 3 bedroom 1 bath 1200 square foot ranch home in a subdivision that was built for the middle class on the SF Bay Area peninsula? Benefits that can't be assigned a monetary value??
You can also minimize it by not being or behaving like a boor. I'm already 46 years happily hitched myself, and if I had it to do over, that''s where I'd start off once again. It's amazing what the payoffs are in life simply for not being a jerk.
Until the woman leaves you because she's bored and takes half your money.
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