The Sadowski’s

[svelte]

[quote=flu]I said this before and I say it again.

A lot of people’s problems in this country isn’t they don’t make enough..Their problem is their spending problem.
[/quote]

Absolutely true.

I was just as happy when I was broke as I am now. Life is what you make of it.

The family made many poor, poor decisions and I do feel sorry for them. That being said, ya gotta live with your decisions, as they are finding out.

Best of luck to them, and may their next decisions be better ones.

Many millionaires went broke a few times before they made it big.

[scaredyclassic]

[quote=harvey]This story is a nice treat for the piggs.

We do love our real estate schadenfreude, and its a bit scarce these days.[/quote]

Agreed. Now I feel ashamed.

There should be another word for it though for the case where one party thinks they will receive sympathy bUT instead receive derision.

If there already is a word let me know

[scaredyclassic]

The real mistake was the bike not the money

[no_such_reality]

[quote=6packscaredy]The real mistake was the bike not the money[/quote]

The real mistake was denial. The bike was just a symptom of denial. Not selling it, denial. Hiding it, denial.

Denial of what? Denial that they really weren’t the self-made American dream that could have it all.

IMO, it’s the root of their relationship problem, their spending problem, their foreclosure problem and ultimately, the cause of his bike ‘accident’.

It’s a hard thing to own up to when you’ve been doing well and hit the skids to look in the mirror and admit. More people need to realize it, if they don’t own their company, and even for many that do, there really isn’t anything material that sets them apart from the 2 million other highly educated, successful, hungry people in Southern California.

[zk]

[quote=6packscaredy]

There should be another word for it though for the case where one party thinks they will receive sympathy bUT instead receive derision.

If there already is a word let me know[/quote]

How about “Sadowski.”

[no_such_reality]

[quote=zk][quote=6packscaredy]

There should be another word for it though for the case where one party thinks they will receive sympathy bUT instead receive derision.

If there already is a word let me know[/quote]

How about “Sadowski.”[/quote]

Drachenfutter.

[UCGal]

I guess in some ways I’m more horrified by the mom’s situation. 27 years in a house – and facing foreclosure. In theory – the mortgage would be pretty low if they never pulled out cash. And prices 27 years ago were pretty low.

I don’t have a problem with refi’ing to get a better interest rate… I’ve done it a few times. But increasing debt when you’re close to retirement… that makes me scared. (I’m close enough to retirement to be focused on cash flow scenarios when I no-longer have income from wages.)

[ocrenter]

I saw the episode while on my treadmill last night, several observations:

#1. In a lot of cases the distressed homeowners’ attachment to their home ends up being their own undoing. Realistically the best thing for this family without any steady income and a mortgage bill of $4000 per month would have been to simply walk away early on. They were fighting an unwinnable fight for 4 years, the end result is the distruction of the marriage. What’s the point?

#2. This is proof that there was no conspiracy to keep the inventory down. Most of these distressed homeowners were kicking and screaming and using all tactics possible to get a stay on the foreclosure. The biggest victim was really these distressed homeowners’ mental sanity.

#3. There was no self-reflection and self-blame about their excessive spending on the part of the Sadowski’s. The spending really was quite excessive, especially since his annual income at the peak was just $160k. You take away taxes and you’re left with maybe $100k. And that was his best year! How many people with take home of $100k have a full sized RV, couple of Harleys, a Mercedes for the stay at home wife, multiple restored classics, as well as ATVs and a fully loaded pool with ‘REAL’ boulders???

#4. The Sadowski’s would have been fine if they did not refi and make the above purchases. Their original loan was only $260k. At 7% interest, monthly payment was at $1700. Dateline pointed out the husband was still able to pull in around $3000 per month doing odd jobs. Plus the wife was also working as well. They would not have been able to save, but certainly they were able to get by.

#5. There’s the health care debate again. Here we have a person who went without health insurance getting into an accident. Who ended up paying for his surgeries and hospital and recovery bills? We did. Another example of our world renowned health care system at work.

#6. Her chubbiness and the kids’ chubby ways. Did you see her using her EBT card to buy sugary drinks and processed food??? Of course still likely without insurance and we’ll have to pay for their health care costs down the road.

[Coronita]

So side question.

If people are anti-investing (which a lot of that seems to be the case even on piggington), what’s the alternative for people like this who depend on back-breaking self-employed labor and now are older and probably can’t do the samething anymore?

Some people, if they are wiped out with the savings/investings have the option of going back to work and rebuilding even if they are older…
In this particular situation, this person counted on his job as a contractor, didn’t save/invest. Can he reasonably “go back to work” in what he is doing, given his current age and physical condition? What options does he have?

[no_such_reality]

I’m in favor of cash flow producing investments as people age. Rentals, partnerships in small businesses, etc. The stock market by and large has really degenerated into a ‘growth’ stock ponzi scheme.

Any portfolio of stocks/bonds/CDs and most financial instruments (sans annuities) can’t support an inflation adjusted 4% withdrawal rate over the long term (30+ years) without a relatively high failure rate (compared to impact) for an individual investor.

Annuities have potential, but I haven’t seen many annuities for sale that will index inflation, which means even though a long term annuity will start with an over 5% payout, within ten years your buying power is diminished to 4% and continues to fall.

At least on Pigg, people don’t think you’re a kook for reading geeky stuff like this http://wpfau.blogspot.com/2012/10/efficient-frontiers-inflation.html

[Coronita]

[quote=no_such_reality]I’m in favor of cash flow producing investments as people age. Rentals, partnerships in small businesses, etc. The stock market by and large has really degenerated into a ‘growth’ stock ponzi scheme.

Any portfolio of stocks/bonds/CDs and most financial instruments (sans annuities) can’t support an inflation adjusted 4% withdrawal rate over the long term (30+ years) without a relatively high failure rate (compared to impact) for an individual investor.

Annuities have potential, but I haven’t seen many annuities for sale that will index inflation, which means even though a long term annuity will start with an over 5% payout, within ten years your buying power is diminished to 4% and continues to fall.

At least on Pigg, people don’t think you’re a kook for reading geeky stuff like this http://wpfau.blogspot.com/2012/10/efficient-frontiers-inflation.html%5B/quote%5D

That makes for an interesting read NSR…Thanks!

[no_such_reality]

Sadly, one plow through coveredca debased me of any fantasy of retiring when I saw what happens to my health premiums heading into my 50s with a family.

[Coronita]

[quote=no_such_reality]Sadly, one plow through coveredca debased me of any fantasy of retiring when I saw what happens to my health premiums heading into my 50s with a family.[/quote]

Lol… Don’t go there……Just be lucky you have no pre-existing condition. I’m wondering if specialized hospitals will make good on their statements that they will opt out…..

[no_such_reality]

[quote=flu][quote=no_such_reality]Sadly, one plow through coveredca debased me of any fantasy of retiring when I saw what happens to my health premiums heading into my 50s with a family.[/quote]

Lol… Don’t go there……Just be lucky you have no pre-existing condition. I’m wondering if specialized hospitals will make good on their statements that they will opt out…..[/quote]

I have a pre-existing condition, hence I price there to estimate future expenses if I leave big corporate America. Plus I factor a 20% increase, which is what I suspect will happen next year.

Doctors and Hospitals will be weenies for a couple years, then when Corps cut off the juice of corporate plans, they’ll fold.

[all]

[quote=no_such_reality]Sadly, one plow through coveredca debased me of any fantasy of retiring when I saw what happens to my health premiums heading into my 50s with a family.[/quote]

Do you know why there is big difference in premium between plans in the same tier? I am looking at HMO 90 – Molina is 20% more than HealthNet and Anthem BlueCross is another 15% more expensive than Molina.

[Author]

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