Stupid people spend more than 1/2 their income on housing

[Darth Wong]

I doubt that "a sizable majority of these people" who are in financial trouble are single and unattached with no real expenses to speak of.

[Death from the Sea]

owning your own home is a much better use of your $$$$ than renting forever. Many people buy a larger home while they are raising their children and then after the kids are gone and grown they sell the big house and move into a smaller home, and use the excess $$$$ from the sale of the bigger home to help with retirement.

Quite frankly if you don't want to be tied down to the same plot of land or don't intend to stay there more than a few years, then it's pointless to buy one, somewhat shooting the "better use of your cash" argument out of the water.

not necessarily, because you can always sell the property if you decide to move (yeah, the market sucks for sellers now but it won't always be that way). And if you do a 15 year mortgage, then in 3 years you have paid enough on your mortgage that you are already paying more into the loan than in interest. Meaning you get more of that cash back for your next place.

Now if for some reason you think getting zero return on your money is worth not having to mess with any of the maintenance of a home, then that is different, as you are making a trade off.

[Themightytom]

Of course not. Because I'm actually smart enough to do this thing called "living within my means." I hear it's a novel concept that some of these people could stand to try.

Oh I am a big fan of living within one's means, I just wanted to verify that you don't have much in common with these people, btu you COULD have more than you think. All the examples so far have been of homeowners. most of them have dependents, or medical bills, which you discounted, so your situation is pretty dissimiliar to everyone described here, except possibly Al Rays. if you lose your job and have to take a lesser one because of an undeclared recession I suppose you'd start to get an idea of how these things can happen.

a 30k salary isn't exactly a cushion given the conditions we are all in right now, I make that much as well, and MY career is one that flourishes under these conditions. that doesn't mean I think "Living within my means" offers me any protection from the many clusterfucks I see ccircling overhead. you mentioned family and medical bills, what about medical condition?

Even if your medical bills are paid for, you only have so much sick leave, or short term disability, what if tthere are paperwork errors and you don't get your benefits in time to avoid late charges or an eviction?
What if you can't get out to go shopping, what if your car shits the bed?

My point is that for people in our income range there's no cushion. "Living within your means" now doesn't account for the future. The people in these examples were trying to build equity, albeit unsuccessfully, instead of blithely assuming that if you "live within your means" all will be well, and what can happen to other people couldn't possibly happen to you.

[Kanastrous]

Isn't setting resources aside for retirement, a part of 'living within your means?'

Just having some pennies left over from monthly expenses, doesn't impress me as fitting the bill.

[General Zod]

Oh I am a big fan of living within one's means, I just wanted to verify that you don't have much in common with these people, btu you COULD have more than you think. All the examples so far have been of homeowners. most of them have dependents, or medical bills, which you discounted, so your situation is pretty dissimiliar to everyone described here, except possibly Al Rays. if you lose your job and have to take a lesser one because of an undeclared recession I suppose you'd start to get an idea of how these things can happen.

a 30k salary isn't exactly a cushion given the conditions we are all in right now, I make that much as well, and MY career is one that flourishes under these conditions. that doesn't mean I think "Living within my means" offers me any protection from the many clusterfucks I see ccircling overhead. you mentioned family and medical bills, what about medical condition?

Even if your medical bills are paid for, you only have so much sick leave, or short term disability, what if tthere are paperwork errors and you don't get your benefits in time to avoid late charges or an eviction?
What if you can't get out to go shopping, what if your car shits the bed?

And. . .so what? If someone took all reasonable precautions then sure, I'd sympathize with them. My point is that people who tried playing roulette with the market and were obviously incompetent in managing their money don't deserve a whole lot of sympathy.

My point is that for people in our income range there's no cushion. "Living within your means" now doesn't account for the future. The people in these examples were trying to build equity, albeit unsuccessfully, instead of blithely assuming that if you "live within your means" all will be well, and what can happen to other people couldn't possibly happen to you.

Which of course is not what I was implying. There's always room for disasters to happen, but if someone is trying to live high on the hog when they really can't afford it then they're responsible for a sizable amount of their own misfortune.

[RedImperator]

On the other hand, while it's possible he could afford it before, it's also likely he was still paying above his means to live there and skimping on everything else to afford it. In which case he's still an idiot. We also don't know why he lost his engineering job, but if it was anything besides his company laying off workers to save costs, I'm having an even harder time feeling sympathy.

You don't have the slightest idea how this guy was living. Unless there are magic invisible words in the article that only you can read, all you know is that he could afford his home before he lost his job, and now he can't.

[General Zod]

You don't have the slightest idea how this guy was living. Unless there are magic invisible words in the article that only you can read, all you know is that he could afford his home before he lost his job, and now he can't.

And? So? Therefore? Remind me again where I said anywhere that my post was anything but a possibility?

[Ohma]

The 1 bedroom apartment I'm renting right now costs me about $640 a month, which is typical (Denver, specifically ). Apartments can go anywhere from $350 for a studio at the really cheap ghetto end to $3k a month for a nice upper-scale condo. (That's not factoring in things like deposits, first & last month's, etc.)

Man, when I was still trying to make a go of it in Portland I would've loved to be able to find an apartment for $640 (there were apartments that were in that range, but they were generally either income restricted-and therefore meant for people making less than I was-, or taken by the time I could make it out to the building) usually a fucking tiny ass studio was going for around $700/month, 1 bedrooms were usually around $1,000.

[Themightytom]

And. . .so what? If someone took all reasonable precautions then sure, I'd sympathize with them. My point is that people who tried playing roulette with the market and were obviously incompetent in managing their money don't deserve a whole lot of sympathy.

I think one of the main points of the article is that the combination of economic issues is affecting a LOT of people. Sure they provided case studies, but when you are done arguing for the stupidity of these few examples, you will probably die before being able to explain away the millions of other examples. When this many people are affected so negatively, it is appealing to cconsider "how will this affect me" butt it is also prudent to consider "What the hell went wrong. "Oh they're just stupid" will only give you so much mileage, and if you categorically dismiss all of these people as stupid then keep in mind it is apparently a VERY fine line between your situation, and a "Stupid" one.

Which of course is not what I was implying. There's always room for disasters to happen, but if someone is trying to live high on the hog when they really can't afford it then they're responsible for a sizable amount of their own misfortune.

None of these people were "living high on the hog." (An obvious reference to Sarah Palin). These people made decisions that were probably sound at the time they made them but blew up in their face because of market crashes and employment slumps.

The WORST example here is the couple who own five houses. they bought five houses over twenty years, that doesn't make them the rockafellers, they probably should have been more conservative in their investments, and could ahve movved a little earlier to start selling the homes they ahve, but really, if they manage to get rid of one or two, the decrease in debt combined with the income from sales will keep them from going belly up. the 64 yr old handicapped woman with three grandchildren who got pwned by the adjustable rate mortgage, well.. probably some douchebag who took his comission and left.

[RedImperator]

You don't have the slightest idea how this guy was living. Unless there are magic invisible words in the article that only you can read, all you know is that he could afford his home before he lost his job, and now he can't.

And? So? Therefore? Remind me again where I said anywhere that my post was anything but a possibility?

On the other hand, while it's possible he could afford it before, it's also likely he was still paying above his means to live there and skimping on everything else to afford it. In which case he's still an idiot. We also don't know why he lost his engineering job, but if it was anything besides his company laying off workers to save costs, I'm having an even harder time feeling sympathy.

"Likely", not "possible". They're not synonyms. It's "possible" I could spontaneously teleport to Jupiter, but if I said it was "likely" I'd rightfully be called an idiot. In your rush to trumpet your intellectual superiority over stranger, you lumped a guy who, from the actual English words of the article, lost his job and fell on hard times in with real estate speculators who got got caught without a chair when the music stopped. Then you got called on it, and rather than just conceding you don't know enough about the man to make a judgment, you made up life story for him without a shred of proof and called it "likely". Tell me, do you apply this reasoning all the time? Like, if you read an obituary that said someone died in an accident, would you proclaim you had no sympathy for him because it's "likely" he was BASE jumping with rubber bands?

[Broomstick]

owning your own home is a much better use of your $$$$ than renting forever. Many people buy a larger home while they are raising their children and then after the kids are gone and grown they sell the big house and move into a smaller home, and use the excess $$$$ from the sale of the bigger home to help with retirement.

Quite frankly if you don't want to be tied down to the same plot of land or don't intend to stay there more than a few years, then it's pointless to buy one, somewhat shooting the "better use of your cash" argument out of the water.

not necessarily, because you can always sell the property if you decide to move (yeah, the market sucks for sellers now but it won't always be that way). And if you do a 15 year mortgage, then in 3 years you have paid enough on your mortgage that you are already paying more into the loan than in interest. Meaning you get more of that cash back for your next place.

Now if for some reason you think getting zero return on your money is worth not having to mess with any of the maintenance of a home, then that is different, as you are making a trade off.

Well, yeah, not having to do my own maintenance is quite nice - keep in mind that my spouse is NOT able to assist me with most home maintenance tasks so it would all be on my shoulders.

I've had two times in my life when I moved 5 times in 4 years - owning is stupid under that circumstance.

Renting out a house? Do you realize how much headache that is?

And with a home it's not just the mortgage payment - there's insurance, paying for maintenance... it really does cost more a month to own than rent. I can see circumstances where it makes more sense to rent a small but decent apartment and still be able to put money away for retirement (or just save it) than to buy a home and be strapped after paying out each month for it.

I should also point out that in the state I live in renters are given a tax break for the cost of their housing just as home owners are, which removes some of the downside to renting.

Now, on the flip side - the person I work for these days (who is also my current landlord) makes a substantial portion of his living with rental properties. However, he inherited some of the property from his parents, and spends a fuck of a lot of time and energy taking care of the properties (and occasionally the tenants - my goodness, the stories he tells!). He also bought all his properties with 20% and fixed rate mortgages, not exotic weird shit loans. He will also take on "handy-man specials", but then, as a general contractor, he has the tools and know-how to actually make competent repairs and the experience to be able to realistically cost out such rehabs.

He also has a very low vacancy rate, and relatively low rents (partly because if you're a good tenant he really will avoid raising your rent because he wants stable and long term tenants).

The thing is, he had the advantage of being trained by his parents, who had a lifetime of experience in that area rather than a weekend seminar or reading a book about how great rental property is. He also does not go for maximum short term profits but rather views the properties as long-term investments. This is NOT an easy way to make a living, it's work, just like everything else.

[General Zod]

"Likely", not "possible". They're not synonyms. It's "possible" I could spontaneously teleport to Jupiter, but if I said it was "likely" I'd rightfully be called an idiot. In your rush to trumpet your intellectual superiority over stranger, you lumped a guy who, from the actual English words of the article, lost his job and fell on hard times in with real estate speculators who got got caught without a chair when the music stopped. Then you got called on it, and rather than just conceding you don't know enough about the man to make a judgment, you made up life story for him without a shred of proof and called it "likely". Tell me, do you apply this reasoning all the time? Like, if you read an obituary that said someone died in an accident, would you proclaim you had no sympathy for him because it's "likely" he was BASE jumping with rubber bands?

So because we don't know how he lost his job and wound up getting fucked over. . . .the default position is that it wasn't his fault? Since when? Why not "it could be either one, and if it was his fault he's an idiot?", which is what I was trying to say in the first place, but for some reason you completely misconstrued?

[Edi]

"Likely", not "possible". They're not synonyms. It's "possible" I could spontaneously teleport to Jupiter, but if I said it was "likely" I'd rightfully be called an idiot. In your rush to trumpet your intellectual superiority over stranger, you lumped a guy who, from the actual English words of the article, lost his job and fell on hard times in with real estate speculators who got got caught without a chair when the music stopped. Then you got called on it, and rather than just conceding you don't know enough about the man to make a judgment, you made up life story for him without a shred of proof and called it "likely". Tell me, do you apply this reasoning all the time? Like, if you read an obituary that said someone died in an accident, would you proclaim you had no sympathy for him because it's "likely" he was BASE jumping with rubber bands?

So because we don't know how he lost his job and wound up getting fucked over. . . .the default position is that it wasn't his fault? Since when? Why not "it could be either one, and if it was his fault he's an idiot?", which is what I was trying to say in the first place, but for some reason you completely misconstrued?

Just shut the fuck up already. Unless of course you like a title that is generally shortened to VI around here. Because that's the level of stupid you're displaying.

You made claims. Now produce the evidence to back them up or concede.

[Kanastrous]

it really does cost more a month to own than rent.

Not necessarily.

For example, I own a townhome in Los Angeles on which I put down $65,000 against a $165,000 selling price in 1994.

Monthly fees plus mortgage payments total $925.00

I couldn't possibly rent a two-bedroom/two bathroom home with two-car garage in Silverlake for $925/month. Not a chance.

[Broomstick]

it really does cost more a month to own than rent.

Not necessarily.

For example, I own a townhome in Los Angeles on which I put down $65,000 against a $165,000 selling price in 1994.

Monthly fees plus mortgage payments total $925.00

I couldn't possibly rent a two-bedroom/two bathroom home with two-car garage in Silverlake for $925/month. Not a chance.

You're comparing a "townhome", which is comparable to my apartment, to a stand-alone single-family dwelling, which is NOT the same thing.

The question is, how much would renting a 2-bedroom apartment in your area compare with your townhome?

[Solauren]

You're trying to debate a townhouse vs apartment?

My 3 bedroom townhouse is considerably larger then any three bedroom apartment I've seen in my city, and comes with a yard and a base to boot.

[RedImperator]

"Likely", not "possible". They're not synonyms. It's "possible" I could spontaneously teleport to Jupiter, but if I said it was "likely" I'd rightfully be called an idiot. In your rush to trumpet your intellectual superiority over stranger, you lumped a guy who, from the actual English words of the article, lost his job and fell on hard times in with real estate speculators who got got caught without a chair when the music stopped. Then you got called on it, and rather than just conceding you don't know enough about the man to make a judgment, you made up life story for him without a shred of proof and called it "likely". Tell me, do you apply this reasoning all the time? Like, if you read an obituary that said someone died in an accident, would you proclaim you had no sympathy for him because it's "likely" he was BASE jumping with rubber bands?

So because we don't know how he lost his job and wound up getting fucked over. . . .the default position is that it wasn't his fault?

The default position, you worthless piece of shit, is whatever the evidence says it is, which is that Al Ray, the gentleman in question, was paying his mortgage until he lost his job. You announced you don't feel any sympathy for him, lumping him in with speculators and people who were obviously in over their heads, and when you got called on it, you made up a life story that you called "likely" to justify it--and then you lied about it later, as if nobody could scroll back to what you actually said, or figure out the difference between "likely" and "possible".

And now you're trying to salvage your shitty argument by repeating the insinuation that it may have been his own fault he lost his job, despite having even less evidence for that than you did for the whole "living beyond his means" schtick. As if it's a huge leap to assume someone got laid off in a recession. I cut you a break in the last two posts by leaving this alone, but since you're such a sucker for punishment, I'll indulge you. Here are your options: 1) Post your proof it was his fault he lost his job, 2) retract the insinuation, 3) admit you're just a self-righteous dickhole who'll make up whatever fairy tale it takes to snicker at the misfortunes of others without feeling guilty, 4) admit your communication skills are so terrible you can't say, "Well, I don't have enough information" without sounding like a self-righteous dickhole.

And while you're at it, you can go ahead and concede the previous point, too, or keep defending it, or whatever. The one thing you don't get to do is change the subject. You had the naked audacity (or lint-headed stupidity) to claim "likely" and "possible" are the same word, now you get to live with it.

Since when? Why not "it could be either one, and if it was his fault he's an idiot?", which is what I was trying to say in the first place, but for some reason you completely misconstrued?

Because that's not what you said, you fucking liar. You said 1) you don't feel any sympathy for the people in the article, and 2) it was "likely" that Al Ray was living beyond his means. If you actually meant to say "I'm not going to feel any sympathy because I don't know if he deserves it or not", then I suggest you spend some of your $30,000 on some remedial English courses, because what you actually wrote doesn't bear so much as a passing resemblance to that, especially when coupled with your bragging about your financial acumen ("Look at me! I can survive on $30 grand a year with no financial obligations!")

[Themightytom]

You're trying to debate a townhouse vs apartment?

My 3 bedroom townhouse is considerably larger then any three bedroom apartment I've seen in my city, and comes with a yard and a base to boot.

Whats a base? Your townhouse comes with a fortified position? A chemical compound that reacts with acid to form a salt? Dictionary.com is not helping me out here I think I need an adult.

[Themightytom]

Ok and i'm a jackass I just realized you probably meant a basement.
just for the record my apartment comes with a gym a swimming pool, a games room with billiards and a giant TV a volleyball court and msot improtantly, 24 hour maintenance. All that being said, I can see how a condo or hosue would appeal to some, as I can't find a decent apartment that allows pets.

[Kanastrous]

it really does cost more a month to own than rent.

Not necessarily.

For example, I own a townhome in Los Angeles on which I put down $65,000 against a $165,000 selling price in 1994.

Monthly fees plus mortgage payments total $925.00

I couldn't possibly rent a two-bedroom/two bathroom home with two-car garage in Silverlake for $925/month. Not a chance.

You're comparing a "townhome", which is comparable to my apartment, to a stand-alone single-family dwelling, which is NOT the same thing.

The question is, how much would renting a 2-bedroom apartment in your area compare with your townhome?

My place is unlike any apartment I have ever seen. Although the fact that I have never seen a three-story apartment the size of a house, different from any other house only in that it shares its side walls, doesn't mean that such a thing doesn't exist...

...in any case, no, I couldn't rent a 'typical' apartment in this area for that money, either. Although I could probably find a guest-house or room to sublet within in a larger house in the area, for about that money.

[General Trelane (Retired)]

...in any case, no, I couldn't rent a 'typical' apartment in this area for that money, either. Although I could probably find a guest-house or room to sublet within in a larger house in the area, for about that money.

You also don't need to put up $65K to rent an apartment. When you're comparing renting versus owning, you need to consider the time value of that down payment too.

[Illuminatus Primus]

Are people that intimidated by social self-consciousness that they'll lock up 50% of their income in paying for a house?

Absolutely. It's built into our genetic code. Think of all the animals which use colourful plumage to attract mates even though it also attracts predators; they are literally risking a violent death in order to attract mates. What is an irresponsible mortgage compared to that?

You don't generally buy a house until your dick already has a home. And if she's that shallow and self-conscious, consider a more evolved/educated/intelligent/mature home for him.

[Kanastrous]

...in any case, no, I couldn't rent a 'typical' apartment in this area for that money, either. Although I could probably find a guest-house or room to sublet within in a larger house in the area, for about that money.

You also don't need to put up $65K to rent an apartment. When you're comparing renting versus owning, you need to consider the time value of that down payment too.

True. Of course, the 65K didn't go away; it became equity held in the property that I can always retrieve. But it did have to be raised, in the first place.

[Broomstick]

You're trying to debate a townhouse vs apartment?

My 3 bedroom townhouse is considerably larger then any three bedroom apartment I've seen in my city, and comes with a yard and a base to boot.

MY apartment is 1100 square feet, I have parking for my two vehicles, and a yard big enough for a garden that supplied most of our vegetables this summer (and will for part of the winter, too, thanks to my freezer). And, oh yeah - all utilities included in the rent - which is $550/month. Granted, it's "only" two bedrooms, but they're pretty big ones. But I wouldn't compare it to an 1100 square foot house.

Is there a unit on either or both sides of your townhouse? Then I'd compare it to an apartment. A "house" is a stand-alone building. You can rent entire houses in this area, too, but they always cost more than an apartment.

[Solauren]

Okay, the apartment you have is MUCH larger then anything I've seen around here.

Must be a geographical difference