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powayseller
ParticipantDaniel, I agree with your point, but they really need to read the Bubble Primer before they start posting. Then, they can address the weakness in the Primer, instead of making posts like “real estate goes up in the long run” and “you can’t time the bottom” and other myths that have already been debunked in the Primer. If he reads the Primer, he can refute it or make new points, and such a discussion is very welcome.
ParticipantRents depend on demand *and* income.
Demand is a primary factor, but you also need income.
I know many young people who would like their own place, but live at home with Mom and Dad because they lack the income.
Income = wages. The median family income is $51K/year. The question is, how much is a family willing to spend on rent, before they decide to pack up and leave San Diego?
While people will pay up to 50% of income on a mortgage, because they believe housing will go up 20% annually, they will *not* pay that much on rent.
My guess: if rents are more than 30% of income, I will move in with some friends or pack up and leave.
Demand and wages. You need both.
August 7, 2006 at 2:17 PM in reply to: U-T: “Caught in the Middle” – making ends meet on $50K/year #31117Participantspeaker, I agree with you, and that’s why I told my kids if they want an Ivy league education, they need to get scholarships to get there. Unless other parents, I won’t go into debt for $120k/child for an education. I think many parents, well-meaning, are using their home equity for college, and then who takes care of the parents in retirement?
As far as the people profiled, I don’t see how divorce made it harder. The guy earning $50K/year should be able to support a family. That is the median income, folks. The $435/month that he sends the ex-wife is a LOT less than what he would pay if the wife were living with him and not working.
The other couple had 2 breadwinners and 2 kids. I don’t see that divorce made their situation any worse. His son is too old to be getting child support, and neither earns enough to have alimony payments to an ex-spouse.
Both families have fairly cheap housing, and the HELOC is fairly low: $137/month.
I think this article clearly states it is expensive to live here. I don’t see that divorce exacerbated their current financial predicament, although past attorney bills could have contributed, we just don’t know.
Participantsdsundevil – read the bubble primer before you post again.
ParticipantToday, Dr. Roubini puts the chance of a global recession in Q1 07 at 70%. Read here
Are you ready, or do you think he’s kidding?
ParticipantHere’s the link. Thanks, Lindi, very interesting.
ParticipantOkay, you guys make great points. So let me ask you this, since you’ve probably put some thought into this: what is it about human nature, or these particular people, that prevents them from seeing what you say? Would they read a Dean Baker story like this, and say “Hogwash”! Why?
August 7, 2006 at 10:35 AM in reply to: U-T: “Caught in the Middle” – making ends meet on $50K/year #31060ParticipantIt’s hard to make it here on $100,000+ per year, too. If you have kids…
Based on my own situation, I am convinced now that people are living off credit. We used to think that everyone else was so rich. We saw their big houses, new cars, boats, vacations, and couldn’t figure out how everyone in Poway made so much money. Well, if you check foreclosure.com, you find your answer!
ParticipantOff topic – don’t read this if you expect housing stuff. This is definitely off topic.
Life’s not perfect here either. My kids don’t pick up after themselves, and my #3 kids has really proven that people are born with their own souls. He has been harder to mold.
I learned the most from the Active Parenting classes (based on the behavioral psychology work of Dr. Rudolf Dreikurs in the 1960s) and Montessori schools.
Dr. Montessori found in her research that kids get satisfaction by meaningful contributions and working with their hands, so the 2-yr-olds make their own snacks, wash dishes, sweep up, and an art lesson’s time is half split between setting up and cleaning up as it is about the art project. The classroom is a house for a miniature person, with everything child sized. Even the mops and brooms are tiny, it’s just so cute.
I was very influenced by Dr. Montessori, so my kids started cleaning the bathroom and using kitchen knives and cooking on the stove at age 2. No play kitchen, no play tools, because they are capable of using the real tools if you show them how, and this makes them empowered and important.
My biggest problem is getting them to pick up after themselves. Kids don’t really care about how clean the house is, so it’s a constant battle.
It’s very important to give them attention, because positive attention prevents bad behavior. If kids are ignored, they seek attention by bad behavior, such as whining, manipulating, acting out, backtalking, balking at your requests, and not caring if they please you. So some back rubs, driving them places, talking with them, playing games, making their lunches instead of asking them to make their own, the same little touches you give your spouse, that keeps everything flowing well. And firm discpline, and a lot of “no, you can’t have that” and responsibility, and an allowance (10% to charity, 10% to savings) to learn financial management. My teen daughter is a clothes hound, but she has to live within her means with her clothing allowance, which I started when she was in 5th grade. She has strict rules about the length of her skirts, no stomach showing, no cleavage, etc. So within those rules, she can buy what she wants. I cringe that she chooses one $150 sweater over five $30 sweaters, but I allow it, I don’t say anything; it’s her money and she has to learn to manage her budget. My daughter looks like a model, she is very pretty, but she is not allowed to flaunt her body. She dresses like a proper young lady, and once she hit middle school, I threw out all my mini skirts so I could be good role model for her.
My kids were instructed into Transcendental Meditation at an early age: age 5 for the children’s mantra, and age 10 for the adult sitting technique. They are sort of regular about it, and my teens love their church youth group activities. Being kids, they don’t like to meditate everyday…
I don’t mean to be a know-it-all. Everyting I say I learned from Dreikurs and Montessori, and it really works. Dreikurs has some really good books: The Challenge of Childhood, and my favorite, The Challenge of Marriage. Marriage is definitely more of a challenge. The euphoria of the first two years wears off, and while kids are cute and adorable and you fall in love with them constantly, staying in love with a spouse is more difficult. I have a great husband, very good-looking and smart and nice, but nonetheless, anybody here with tips on staying in love with the spouse, would be appreciated.
In the spirit of being open, I want to tell you all it is difficult for us to make ends meet in San Diego. I wonder what kind of retirement we will have. How long will my husband have to keep working? If I work now, what will happen with the kids after school? I will not leave them alone, I would rather move back to Omaha and live in a 1 bedroom apartment before I would abandon my kids for a paycheck. But these real choices are here before me every day.
It is very expensive to live here, and although my husband earns above the pay scale for his profession, so that even a promotion to another bigger company would bring a pay cut and copay insurance costs which we don’t have now, his good paycheck is still not quite enough to make it easy to live here. I keep telling my husband that I am willing to leave San Diego and downsize, but he will not leave here. He loves the weather and the beach. He doesn’t mind the sunshine tax, I guess. I am willing to leave though.
Are we going to end up like those people in the Frontline retirement video, who keep working after retirement? We are now in our early and late 40’s, and discussing what kind of life we will have at retirement. We have saved for over 20 years, since our first jobs, into the 401Ks, and we didn’t lose more than $2K during the tech stock crash, but we certainly don’t have enough to consider retiring. It is worrisome. The article I posted today made me realize this is a problem for many people, not just for us.
The money we made from the house give me some security, but we need to use that to buy another house. I think the future is very uncertain, and some uncertainties at my husband’s company add to the mix. If he changes jobs, or careers, his pay will certainly be cut in half. Our life would really change then. No more packing blueberries, raspberries, in the shopping cart without ever checking the price…those days would be gone.
Our best financial times were in Phoenix, right before we moved here. Like now, no car payments, but a very cheap mortgage: $1500/mo PITI on a 15 year mortgage, socking away money for retirement. The kids were younger and less expensive then. They ate less, too. Gas was cheap back in 1999.
Our only hope is that I jump start a career after the kids are in college, and we really sock away the money. I have seen many women make that kind of move, even women without college degrees.
My concerns are nothing compared to the tens of millions of Americans out of work, underemployed, or worried about keeping their homes. I am grateful that today, we are still okay.
ParticipantBeware of Everbank. I paid $14.99 for a Weiss rating last week, and Everbank is a very risky bank, rated E-.
Everbank also has 50% of its portfolio in FL residential mortgages, so that will be a double whammy for them. I don’t think that the current rating is reflecting that looming problem for them, because the foreclosures and debt losses are not a reality yet.
Participantflinger, why do you like Austin, Albuquerque, and Ft. Collins? Why are you anxious to leave San Diego?
ParticipantTransaction or exchange rate fees? How do we make withdrawals, and what are the wiring fees? Interest rates? Downside risk of euros (he should be able to give you a couple). Will you start a new thread when you get the info together? Oh, and does he know why the Bank of Italy would buy sterling instead of euros? What does he think of Swiss francs and of the US dollar?
ParticipantBoth Zeal Intelligence and Chris Johnston, to whom I pay membership fees, recommend waiting to buy gold. Zeal’s newsletters in particular go into great detail on gold – this last rally will fall back too, just as the othes. They are waiting for gold to go back down to $560, which should be in the fall. Patience is key in investing, as Chris mentioned before. Although I am nervous not owning any gold, I am going to be patient and take the advice of these people whom I trust. The rally in gold is not sustainable; it will climb, but the slow gradual climb lasts; the quick rallies end up falling back and I don’t want to buy on one of those temporary rallies. Zeal explains it all so well, and I am convinced now to wait.
I think oil is more valuable than gold though. Our economy is so dependent on cheap oil. High oil prices, or no oil would cause a depression. We need oil as badly as food and water. gold is secondary to gold, that’s for sure. I am going to buy more oil and natural gas stocks, as recommended by Zeal,but this is going off topic.
the main point is to diversify, since we don’t know the future.
ParticipantSorry, I didn’t mean to say he was bitter. He posted about his parents’ divorces, and I think that parents who divorce and remarry a lot end up ignoring their kids, and people who perceive they had bad childhoods don’t want kids of their own and end up not liking kids much. I have someone in my family like that. So that was why barnaby said the lady in trouble with her house should not have had 4 kids. It is true that my kids are great because I am tough on them, so they get their satisfaction from their positive interactions and not from whining and manipulating. I swear, so many kids are rude to their parents, but mine are very respectful. They don’t interrupt me while I’m on the computer, not matter how long I’m on it, because they don’t want to annoy me. They help with housework, do their homework. I don’t know if it would have turned out this well had they been “daycare kids”. My kids have a mom and a dad, so their life is better than mine was growing up since I lived with my mom.
The only problem is that my family thinks I spend too much time on the computer, esp. on piggington. So that is a dilemma.
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