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That's true that financial illiteracy goes across demographics, but let's look at it like this, Fairfax, Montgomery, Howard, Loudoun, and all the other counties in this area are in the same job market, so what's different? Can we really say that PG is suffering from the economy more? That doesn't make sense. The representative from the NAACP says it was predatory lending. I agree some what with him, but I take it further and say that it was a combination of that and illiteracy. Think about it like this, if you are knowledgeable in real estate and know your financial state, you're not going to take the risk of getting ARM Mortgages especially if you have to get a lower interest rate just to afford the place for the first few years. Why haven't other parts of this area had this problem? There was an article in the post about a year ago where they compared Lake Arbor to Cleveland Park in DC and it showed that Lake Arbor had a higher average income but had higher interest rates on their mortgages. A lot of those mortgages in Lake Arbor had ARM mortgages.
Can-O-Worms We can talk about African Americans on average having lower credit ratings than their white counterparts, lower average salaries, less amount of savings or collateral to get those lower rates, little to no savings for the big down payments necessary to get low fixed-rate mortgages, etc. There are so many variables to account for, I still don't think that people were just simply ignorant and made bad decisions. Yes, there were a few who were sold dream houses that they were told they could afford and they ate it up. Yes, some people were house poor and lived paycheck to paycheck so when they lost their jobs, they had no savings to fall back on. Still, others got ARMs because they felt their lot in life would be better in 2 or 3 years.
I still say that PG has more service workers than Montgomery, Fairfax, and Howard counties. That industry was the hardest hit during the recession. You had teachers, state government workers, county workers that were laid off in the last two years. You also have to take into account single parent households compared to other areas. I mean the list goes on. I don't think we can simply narrow the problem down to predatory lending or ignorance. This recession caused a whole lot of mess by itself that just exacerbated some underlying issues that may not have surfaced had there not been such a deep recession.
Again, we have to look at who has the deepest pockets to ride out such a recession. Are they lower to middle-income service workers or upper-middle-class private sector white collar workers? Like I said before, my wife, a teacher got laid off. Had it not been for God to bless me with a science engineering job, we may have been in those foreclosure numbers if my unemployment lasted through my savings.
I just think it's wrong to paint everyone with the same brush. What the mortgage companies and banks did to drag the economy to where it is now is morally and ethically horrendous. And while they snatch up tax-payer money and huge profits, I find it hard to believe they still find it necessary to snatch peoples' homes out from under them just to have them sit on the market because now even people who can afford homes can't get them. It's like they are robbing the country blind and they say to hell with everyone else. "Let's get ours while we can because this gravy train won't last forever." and the government is sitting their with its tail between its legs. Oh and God forbid you don't pay your taxes. They garnish your wages and take your property. Never mind the fact that the mortgage companies who had a mandate to help struggling homeowners simply thumbed their noses at the government. And what does the government do? Nothing. Ans we want to blame those caught in the middle?
The rich saw unprecedented growth in wealth during the past ten years while the middle class wages went backwards. The middle class is actually making less money than they did ten years ago. And we are blaming the middle class? No one, myself included, expected to be making less ten years later.
We can go on and on and on. But my points are these:
1. PG consists of mostly lower to middle-class blue-collar workers.
2. The accumulated wealth of those in PG is far less than those in Fairfax, Montgomery, Loudoun, and Howard counties.
3. Yes, some people bought more than they could afford.
4. Yes, some people were ignorant about ARMs and Fixed-rate mortgages.
5. The credit scores of African Americans are generally lower than those of whites.
6. This recession is a ***** and it would take down even the most honest, intelligent, hard working family. I have a friend who lost his job last year and is still unemployed and he JUST bought his house last summer. He has a wife and four kids. If he doesn't find work soon, he will slide into foreclosure as well. He has a fixed rate at 5% and came up with his own down payment.
In my opinion it all depends on what their financial situation is like. If you don't have the salary to afford those things, then why are you buying them? If you got it, nothing wrong with buying it, but how can someone be struggling to pay for their mortgage but go out and buy a luxury car? There is definitely something wrong here and to me it's cultural. Why are so many of us in this county struggling to pay for these things?
On a side note, I have been in the same boat as you as far as my wife is concerned. My wife is a teacher as well and she was laid off as well, and so I had a lot of pressure on me to pay the bills. But just like you, we were able to pay for our bills off of my salary. The reason why is because we lived below our means. Do you think people do that enough in this county?
One thing I forgot to mention is that a lot of people fake it. Some, if not most of those luxury cars you see out there are leased. You get the same car for half the payment. Also, I will agree that there is a materialistic culture in DC. I never really understood why those who were low income had to have Gucci this and Prada that. Granted, some of that stuff is from the outlet mall. DC is VERY unique in that you have so many who make good money here because of the government. You don't have areas here like in Mississippi or Tennessee where it doesn't take much to appear like you have money. Especially since two out of the three counties that surround DC are the wealthiest in the country. That goes to some peoples' heads when they work or live next to someone with a 6-figure salary.
People need to be practical. I've been taught, mainly through church, that a couple should live off of one salary. Unfortunately when people get married, they see it as an opportunity to accumulate stuff instead of building wealth. I can't speak for all people though. I'm sure there are many people out there like me and you. But I have know for a while having grown up in this area that there is an underlying competition to see who has it going on and who doesn't. But I don't think that accounts for what is going on with the foreclosures. I do think that a very deep recession is to blame. People in PG just don't have the deep pockets as those in other counties do to ride out the recession. And we have no way of knowing when these people brought their homes. Some could've purchased their homes 20 years ago and had ten years to go and lost their jobs. Do the foreclosure numbers include those homes purchased in the last 5 years or the last ten, twenty? That would be interesting to find out.
In my opinion it all depends on what their financial situation is like. If you don't have the salary to afford those things, then why are you buying them?
I don't think it's about salary. It's about cashflow and covering one's bases. There's no rule that only a certain profile can drive a BMW, you don't have to be a CEO or pulling in millions. You and I are good enough to drive a BMW right now, why not?
I think we should be careful to not go to the other extreme and automatically scoff at the escalades and bimmers.
If you are not a missed paycheck away from being wiped out, or if a visit to the ER isn't financial murder, then by all means enjoy the bimmer.
Once basic savings and/or an emergency fund is in place and all bills are covered it's just a matter of lifestyle preferences from there on. Some people want to enjoy a nice ride (trust me a BMW and a honda civic or ford fusion is NOT the same thing)...others just want something to get from point a to b and are ok with boring, vanilla Camry. Nothing wrong with either.
But we all agree the being on food stamps and driving a 2006+ bimmer is suspect.
But we all agree the being on food stamps and driving a 2006+ bimmer is suspect.
That depends. What if that person paid off that 2006 BMW in 2009 and got laid off in the same year and is still looking for a job in 2011 and that's their only mode of transportation? What then? My best friend is on food stamps because he got laid off last year. Why is he less suspect because he drives an Altima. He certainly could have gotten a Hyundai Elantra or even taken public transportation. I think we need to stop talking about what people drive as an indication of their financial acumen. There are just too many scenarios that we don't have the privilege of knowing about and should we even be concerned about what another person is driving?
One thing I forgot to mention, there are TONS of private minority contractors in this area because of the government. So, when the government stops spending money, those contractors take a hit. I know tons of minority contractors who are struggling because the government stopped spending. There's just no work. So, when you're used to pulling in $150,000/year and now you're pulling in $75,000/year, things are going to get tight. I would argue that the D.C. area has the highest concentration of minority contractors who make a living bidding on government contracts.
Location: Huntersville/Charlotte, NC and Washington, DC
26,700 posts, read 41,742,544 times
Reputation: 41381
Quote:
Originally Posted by adelphi_sky
This is not indicative of all black people. I learned a long time ago not to be inclusive when speaking about a group of people. What some people call luxuries, other people see as quality of living. For example, I don't buy Brooks Brothers dress shirts because I'm trying to impress anyone. They are good shirts and they last a very long time. So, I'm not buying cheap shirts every 6 months. I drive a BMW not because of status, but because it's a good quality car. I have done my research and the 3-series ranks in the top 10 year after year. I also love to drive and I drive sporty. So, it seemed like a good fit. I could care less about status. A car is a car. and I bought one that I would enjoy for years to come. I don't buy shoes to impress people. I buy New Balance because they last the longest and are the most comfortable. I wear Kenneth Cole shoes because of the craftsmanship and durability of good leather. I shop at organic food stores because I value what I put in my body. I'm not trying to impress anyone because my beef cost twice as much as the beef in Safeway or Giant. I choose to eat good quality food.
For this black person, it's more about quality of life and buying quality items. I work hard for my money. I see no reason to settle for second best just to prove to someone I can put a few dollars away. Especially when I can do that AND buy good quality things.
So, I ask, are black people not expected to have nice things? Especially when white people spend and own more than minorities? Have you traveled to black communities in the south? I can guarantee you they aren't driving luxury vehicles or live in large fancy homes.
PG County is special because the population here does have more wealth than most other black communities. So, yes, you will see more luxury cars and homes owned by black people. But I hesitate to say they have these things just to impress people. Some do, but most are hard working people who want to be able to have something of value to hand down to their children. That's how other groups maintain wealth in the family. They hand things down that are of value whether it is land, property, or investments. That's what I hope to do for my children.
Black people can have all the "nice things" they want but the problem is to what extent they are going to get those nice things sometimes. If you are bringing home $2k a month can you really justify a $700-800 car note for a Benz? Another thing is whether you are doing a smart thing with wealth. Putting a lot of wealth into a car is not a smart idea especially most new cars lose value the second it goes off the lot. If you've seen the movie Baby Boy, Ving Rhames put it perfectly in the analogy of guns and butter. You can youtube it to get what I'm talking about. When you are making money you should learn new rules to help prolong the life of your money.
Location: Huntersville/Charlotte, NC and Washington, DC
26,700 posts, read 41,742,544 times
Reputation: 41381
Quote:
Originally Posted by (-)
before striking out on my own and starting my own biz, i worked for a company where two of the top execs (older white guys) both made around 500-600k a year. i made about 30k a year. i went out and got me a nice new car and put rims on it when i got that job. as time went on while i worked there i noticed that neither of the top execs had flashy cars. one drove a honda accord, the other drove rav 4. that immediately changed how i viewed wealth. it's not about what you make but about what you can save and invest in. for them vehicles weren't high priority items. nice homes, vacations, savings, investments, schooling for their children and retirement were. one of the most important life lessons i learned.
One of me boys one time said people on top who have big money have big money because they drive the Honda or the Toyota. I think one of the big problems in the black community is not thinking of the big picture. You may laugh at the brother driving the old Honda but in 5 years he may have a few thousand in the bank b/c he had no car note and no big repair bills like luxury European cars usually have. Lesson here, have your money make money.
All of this emphasis on getting something flashy. Alot of this talk makes me not want to get a car or a house at this point in my life. I'm still in college and I graduate in May 2012. I don't have the money to get any car, let alone a BMW or the like. I don't want to go into debt, so I am waiting until I have enough money to buy a car in full. My big issue is that I don't want to end up in debt over a car.
This recession has given having a home and a car a new meaning. When I was younger, I used to think about having the big house, the brand new car, the flashy stuff to show off. This is when I was a teenager. This recession and surviving thus far without ever having a car gave having all of these things a new meaning. For me, having a nice car isn't a sign of wealth for me. Having a nice house isn't a sign of being wealthy and making it big. For me, the fact that my father has his house means if I ever can't pay rent where I live, I can go back home and live with my parents. My parents having their cars means they have a car to drive when they need it. For me, seeing my parents having both at this point means they have their head above water and their surviving. For me, I don't want to buy a house if it means I have to go into debt trying. I don't want a car if it means I have to go into debt trying or if it will compromise my personal quality of life. It isn't worth it to me at this point.
In short, I don't seek to brag about having that fancy house or that fancy car to show off. My self worth doesn't depend on those things.
Black people can have all the "nice things" they want but the problem is to what extent they are going to get those nice things sometimes. If you are bringing home $2k a month can you really justify a $700-800 car note for a Benz? Another thing is whether you are doing a smart thing with wealth. Putting a lot of wealth into a car is not a smart idea especially most new cars lose value the second it goes off the lot. If you've seen the movie Baby Boy, Ving Rhames put it perfectly in the analogy of guns and butter. You can youtube it to get what I'm talking about. When you are making money you should learn new rules to help prolong the life of your money.
Cars are necessary evils and we can all argue who deserves what type of car. On the one extreme, do we really need cars at all in an area with mass transit? Take NYC for example. Most people there don't even drive or have cars. On the other extreme, some may feel that compared to an Aston Martin or Maserati, a MB is a working man's car.
As far as making money stretch, I ask to what end? Retirement? Financing a business? to show people how frugal you are? I understand about making money work for you and getting the most value out of your money. That entails not using credit but paying everything with cash. Paying interest is not a good way to make your money last.
I agree that we live in an age of "I want it now." People have lost patience. Some of these people we see at the highest income levels took years to get there. I always say that those people you see in those fancy homes and driving nice cars have a head full of gray hair. That means they may have worked hard for years for those things. Yet, I see young people in their early 20's driving 7-Series BMWs. I have issues with that. Granted, they could be driving their parent's car. But still.
All of this emphasis on getting something flashy. Alot of this talk makes me not want to get a car or a house at this point in my life. I'm still in college and I graduate in May 2012. I don't have the money to get any car, let alone a BMW or the like. I don't want to go into debt, so I am waiting until I have enough money to buy a car in full. My big issue is that I don't want to end up in debt over a car.
This recession has given having a home and a car a new meaning. When I was younger, I used to think about having the big house, the brand new car, the flashy stuff to show off. This is when I was a teenager. This recession and surviving thus far without ever having a car gave having all of these things a new meaning. For me, having a nice car isn't a sign of wealth for me. Having a nice house isn't a sign of being wealthy and making it big. For me, the fact that my father has his house means if I ever can't pay rent where I live, I can go back home and live with my parents. My parents having their cars means they have a car to drive when they need it. For me, seeing my parents having both at this point means they have their head above water and their surviving. For me, I don't want to buy a house if it means I have to go into debt trying. I don't want a car if it means I have to go into debt trying or if it will compromise my personal quality of life. It isn't worth it to me at this point.
In short, I don't seek to brag about having that fancy house or that fancy car to show off. My self worth doesn't depend on those things.
I purchased my house when I was 24 years old. Back then, it was said that you needed a tax shelter. That was the main reason I got my house. To me it was a bachelor pad. Nothing really to show off about. Just so happens I got married and stayed. I would say if you wish to buy a house with cash from no other income source than your wages, it would probably take you anywhere from 10 to 20 years depending on your salary. Now if you're knocking down 6-figures with no kids and no debt. You'll be closer to the 10 year mark.
Going into debt has different meanings in this country. It's almost a given that you finance your house and car. For the 99% of us, that's a reality. Wages just haven't caught up in the past ten years. And they are saying it will take another 10 years for things to return to normal. That's scary for anyone who wants to buy a house. Let alone with cash.
As far as cars and debt are concerned, that's another necessary evil unless you have no one depending on you for transportation, I guess you can ride public transportation or invest in a scooter. But for most people, they usually don't save up cash to buy a car. As far as luxury cars are concerned, it's all what you feel you'll be able to live with. For me, I love driving, so, I wanted a car that could handle my spirited driving and would be reliable and run for a long time. We take our vacations and drive most of the time. So this is important to me. So, I pay a premium for that. Others may just need something to get across town in. So, they don't put so much into a car.
Do be scared of debt. it is manageable. businesses manage it. The trick is, having enough cash flow and credit to mitigate that debt and render it negligible. For example, if you want to buy a house, get one well within your means and get a 15 year loan at 5%. If you need a car, you're perfectly capable of getting a new car within your means with a.9% interest rate and paying it off in 3 years. That's managing your debt well.
What's scary is getting the 30 year mortgage at 8% and a car at 19% for 5 years while living paycheck to paycheck with credit card debt on top of that.
Can-O-Worms We can talk about African Americans on average having lower credit ratings than their white counterparts, lower average salaries, less amount of savings or collateral to get those lower rates, little to no savings for the big down payments necessary to get low fixed-rate mortgages, etc. There are so many variables to account for, I still don't think that people were just simply ignorant and made bad decisions. Yes, there were a few who were sold dream houses that they were told they could afford and they ate it up. Yes, some people were house poor and lived paycheck to paycheck so when they lost their jobs, they had no savings to fall back on. Still, others got ARMs because they felt their lot in life would be better in 2 or 3 years.
I still say that PG has more service workers than Montgomery, Fairfax, and Howard counties. That industry was the hardest hit during the recession. You had teachers, state government workers, county workers that were laid off in the last two years. You also have to take into account single parent households compared to other areas. I mean the list goes on. I don't think we can simply narrow the problem down to predatory lending or ignorance. This recession caused a whole lot of mess by itself that just exacerbated some underlying issues that may not have surfaced had there not been such a deep recession.
Again, we have to look at who has the deepest pockets to ride out such a recession. Are they lower to middle-income service workers or upper-middle-class private sector white collar workers? Like I said before, my wife, a teacher got laid off. Had it not been for God to bless me with a science engineering job, we may have been in those foreclosure numbers if my unemployment lasted through my savings.
I just think it's wrong to paint everyone with the same brush. What the mortgage companies and banks did to drag the economy to where it is now is morally and ethically horrendous. And while they snatch up tax-payer money and huge profits, I find it hard to believe they still find it necessary to snatch peoples' homes out from under them just to have them sit on the market because now even people who can afford homes can't get them. It's like they are robbing the country blind and they say to hell with everyone else. "Let's get ours while we can because this gravy train won't last forever." and the government is sitting their with its tail between its legs. Oh and God forbid you don't pay your taxes. They garnish your wages and take your property. Never mind the fact that the mortgage companies who had a mandate to help struggling homeowners simply thumbed their noses at the government. And what does the government do? Nothing. Ans we want to blame those caught in the middle?
The rich saw unprecedented growth in wealth during the past ten years while the middle class wages went backwards. The middle class is actually making less money than they did ten years ago. And we are blaming the middle class? No one, myself included, expected to be making less ten years later.
We can go on and on and on. But my points are these:
1. PG consists of mostly lower to middle-class blue-collar workers.
2. The accumulated wealth of those in PG is far less than those in Fairfax, Montgomery, Loudoun, and Howard counties.
3. Yes, some people bought more than they could afford.
4. Yes, some people were ignorant about ARMs and Fixed-rate mortgages.
5. The credit scores of African Americans are generally lower than those of whites.
6. This recession is a ***** and it would take down even the most honest, intelligent, hard working family. I have a friend who lost his job last year and is still unemployed and he JUST bought his house last summer. He has a wife and four kids. If he doesn't find work soon, he will slide into foreclosure as well. He has a fixed rate at 5% and came up with his own down payment.
I don't know MoCo has a booming Hispanic population. Many if not most Hispanics in the area are in the service industry. Your point is well taken though even before the Black American migration to PG it was always the more working class, rural of the immediate DC suburbs.
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We can talk about African Americans on average having lower credit ratings than their white counterparts, lower average salaries, less amount of savings or collateral to get those lower rates, little to no savings for the big down payments necessary to get low fixed-rate mortgages, etc. There are so many variables to account for, I still don't think that people were just simply ignorant and made bad decisions. Yes, there were a few who were sold dream houses that they were told they could afford and they ate it up. Yes, some people were house poor and lived paycheck to paycheck so when they lost their jobs, they had no savings to fall back on. Still, others got ARMs because they felt their lot in life would be better in 2 or 3 years. 
What some people call luxuries, other people see as quality of living. For example, I don't buy Brooks Brothers dress shirts because I'm trying to impress anyone. They are good shirts and they last a very long time. So, I'm not buying cheap shirts every 6 months. I drive a BMW not because of status, but because it's a good quality car. I have done my research and the 3-series ranks in the top 10 year after year. I also love to drive and I drive sporty. So, it seemed like a good fit. I could care less about status. A car is a car. and I bought one that I would enjoy for years to come. I don't buy shoes to impress people. I buy New Balance because they last the longest and are the most comfortable. I wear Kenneth Cole shoes because of the craftsmanship and durability of good leather. I shop at organic food stores because I value what I put in my body. I'm not trying to impress anyone because my beef cost twice as much as the beef in Safeway or Giant. I choose to eat good quality food. 
