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Old 03-01-2012, 03:41 PM   #41
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Agree with Hamlet but this is a good opportunity to decrease that fixed monthly expenses. Yes, it's tough, very tough for most people but, if one can raise monthly living expenses due to rise in income, decrease is possible due to decrease in income.

Hopefully they learn their lesson and can start saving when income goes up but it's only a hope.
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Old 03-01-2012, 04:00 PM   #42
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Yes, this board has more ants than grasshoppers.

The Schadenfreude that the ants here seem to show when the grasshoppers start starving is not their most becoming characteristic though.
You're right. The ants should be more compassionate when the grasshoppers can no longer afford to have 'three kids in private school, ski trips to Whistler & Tahoe, Trump National memberships, $17K/yr caring for 2 dogs or selling 2 motorcycles they weren't using.'

Seriously, no one enjoys seeing someone else have to cut spending. But I have more sympathy for a struggling ant than for a struggling grasshopper facing the cuts above. Some on Wall St (the OP link was mostly Wall St examples) made the real estate bubble much worse than it would have otherwise been and made a $ killing doing so, how was their schadenfreude for the ants?
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Old 03-01-2012, 04:04 PM   #43
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I think a lot of people just don't realize how well off they are. They don't begin to understand how many people are much worse off than they are. So, yeah, the backlash from opening their mouth to complain probably comes as a bit of a surprise - maybe even a wake-up call.
Bingo! (except the wake-up call part).

This quote says it all:

"People who don't have money don't understand the stress,"

It's a culture where everyone is paid a lot and however much you get paid, you know folks who are making more - a lot more. People become completely ungrounded.

Whenever anyone complains "How can I live in NY on $$$,000?" ask how the admins in their office manage to do it on far less. I've done it and the response is usually stunned silence. Most have never actually considered that people do just fine on a fraction of what they earn. They only look up and see people making far more. They feel underpaid, and poor by comparison. It really is something to behold.
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Old 03-01-2012, 04:05 PM   #44
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Yes, this board has more ants than grasshoppers.

The Schadenfreude that the ants here seem to show when the grasshoppers start starving is not their most becoming characteristic though.
I don't like seeing anyone struggle. And I do agree, to a point, that the "ants" can be a bit smug in their condemnation of, and condescension toward, "grasshoppers" at times here.

Having said that, there is only some much capacity for compassion and willingness to sacrifice myself for the needs of others, and if my choice is between someone who couldn't make ends meet with $350K and a struggling young single mother with a deadbeat absentee father who is working two jobs just to pay the modest rent, I know where my concern and willingness to sacrifice are going.

I'd much sooner be generous to someone busting their asses and barely able to afford the necessities than someone who enough to feed, house and educate three families quite well but can't manage even one.

And yet, I do understand the seduction of "lifestyle creep" and how hard it is to change once you are accustomed to it. It's one of the reasons why I'm grateful I made the decision, years ago, to not significantly ratchet up my lifestyle just because my income allowed it. But my ability to help those who struggle is limited so I have to make choices there.
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Old 03-01-2012, 04:20 PM   #45
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Yes, this board has more ants than grasshoppers.

The Schadenfreude that the ants here seem to show when the grasshoppers start starving is not their most becoming characteristic though.
My sense is that forum members understand that living within one's means is a choice to be made. The newspaper article deliberately presents the subjects in an unfavorable light and invites the reader to be critical, and this is unfair. Schadenfreude? If so, it is intended by the author. Forum members show the reaction of people that have faced similar challenges but chosen differently.
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Old 03-01-2012, 04:34 PM   #46
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You're right. The ants should be more compassionate when the grasshoppers can no longer afford to have 'three kids in private school, ski trips to Whistler & Tahoe, Trump National memberships, $17K/yr caring for 2 dogs or selling 2 motorcycles they weren't using.'
LOL

I'd frame it like this: Why should someone who can only afford to send their kids to public school feel sympathy for someone else whose downside scenario is that they might have to, perish the thought, send their kids to public school?

Surely the children of the formerly rich can't be expected to mingle with the prols.
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Old 03-01-2012, 05:38 PM   #47
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This story goes well with the book about living in a bubble. These poor bankers probably don't even know what NASCAR is.
Eh, people who go to France to see Le Mans do not need to know about NASCAR.


PS. I have to add here that I am so poor I have not seen any NASCAR race, leave alone Le Mans.
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Old 03-01-2012, 07:17 PM   #48
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Bingo! (except the wake-up call part).


Whenever anyone complains "How can I live in NY on $$$,000?" ask how the admins in their office manage to do it on far less. I've done it and the response is usually stunned silence. Most have never actually considered that people do just fine on a fraction of what they earn. They only look up and see people making far more. They feel underpaid, and poor by comparison. It really is something to behold.
That might be true but I have lived in NYC and do not want to live on what these other people live on. To make ends meet, they live in basement or in a shared housing situation and live in areas of the city that I would not recommend.
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Old 03-01-2012, 07:25 PM   #49
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I do not think you can draw the conclusion that most people live like this from the article. Certainly people here grasp that concept very clearly. If you have data that shows this to be the case for most people in the US please show it.
Savings rate was around zero up till a few years ago. Expenses equaled income roughly speaking. Some saved like us here, others spent more than their income, incurring debt.

Recently that trend has changed, and people on average save around 5% of their incomes now IIRC. Savers probably save more and spenders can't get access to enough credit to offset the savers savings.
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Old 03-01-2012, 08:13 PM   #50
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San Francisco, La Jolla, Boston, Nantucket, LA and many other cities in CA, CT, MA are equally hard for me to comprehend. Wonderful places, but why would anyone put up with a COL like that? No answer...
For a lot of people they have no choice, it's simply where the jobs are for their (specialized) field.
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Old 03-01-2012, 08:28 PM   #51
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Savings rate was around zero up till a few years ago. Expenses equaled income roughly speaking. Some saved like us here, others spent more than their income, incurring debt.

Recently that trend has changed, and people on average save around 5% of their incomes now IIRC. Savers probably save more and spenders can't get access to enough credit to offset the savers savings.
The savings rate did fall to around 2.5% during the '08 recession, but that is a close as it has been to zero since the great depression. In the newspaper article we are discussing the individual is also saving, in the 401(k). The US personal savings rate published by the BEA is an aggregate economic number and not applicable to individuals, you can not use it to characterize groups across any income level.
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Old 03-02-2012, 12:49 AM   #52
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My quick google shows a range of median household income of NYC from 34K in Bronx to 64K in Staten Island to 68K in Manhattan. So anyway you cut it more than 1/2 the families in the city live on less than 1/5 his salaries. Even if you factor taxes, various subsidies (rent control) for poor/middle income people his take home pay is still 3x more than median income.

I can be fairly empathetic to the actor, athlete, artist who was making 350K and gets a big pay cut and has money trouble. These people are not suppose to understand money. Somewhat less sympathetic to doctors, lawyer, owners of high end stores etc. But empathy for bankers, traders, Wall St. type, hell no. Understanding and properly managing money is their bloody job. If they don't have savings, overpay for services etc. I really don't want these people in charge of anybodies money. So I truly have no sympathy for them, and I'm not even somebody who places all the blame for the crisis on Wall St. and bankers. It is article like these admittedly written to cast the folks in a bad light that make me sympathize with the occupy the crowd, even though I disagree most of their ideas.
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Old 03-02-2012, 06:54 AM   #53
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Elizabeth Warren touches on this some in her lectures. It's not frivilous spending that is a problem in this situation. It's easy to stop that. It's the big monthly payments that you've locked yourself into that cause pain. Those aren't easy to change without severe upheaval.
I do think that's a big part of it, and why Zero Debt is important to myself and DW. With no payments to make, an adjustment to spending is easier to make since one is not "locked in" to a high spending level.

That, and the realization that living in a larger home than we do or owning a 'benz would not significantly affect the quality of our daily lives.
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Old 03-02-2012, 08:30 AM   #54
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That might be true but I have lived in NYC and do not want to live on what these other people live on. To make ends meet, they live in basement or in a shared housing situation and live in areas of the city that I would not recommend.
I too lived and worked around NYC, for 20 years. My earnings ranged from $27K to much, much higher. I was always able to save and I never lived in a basement. At a combined income of say, $120K my wife and I were able to buy a two bedroom condo 30-40 minutes from both of our jobs by public transportation - mine in the financial district, and hers in mid-town. Property values are higher today, but the difference between the 7.75% mortgage I took out and the ones available today makes the monthly payment on my property at current market value and interest rates only about 20% higher than what we were able to comfortably manage on an income 1/3 smaller than $350,000.

If you lived in NYC, then you also know there is more to the area than the upper west side. Large parts of NJ and PA are commutable. Many, many, many people who can't afford $32K per kid for private schools move out to the suburbs. Some commutes can be long, but nobody needs to live in a basement. And nobody should be crying poverty with a $350K income.
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Old 03-02-2012, 08:59 AM   #55
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Does it have to be either/or?

If this was a friend of yours, wouldn't you say "that's hard" when they were talking to you about having to pull their kids out of school in the middle of the year, or thinking about how they could need to get rid of the family pet? I'd like to think that most of us would listen with a sympathetic ear, and give as much useful advice as we could.

One of my co-workers is going through bankruptcy, even though he makes a very good living (probably $110k+). He's made some bad but very common decisions to get to this point. That doesn't make the experience any more unpleasant for him. I feel his pain, even though it is mostly the result of his own decisions.


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Seriously, no one enjoys seeing someone else have to cut spending. But I have more sympathy for a struggling ant than for a struggling grasshopper facing the cuts above.
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Old 03-02-2012, 09:02 AM   #56
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I didn't draw that conclusion from the article, just my general experiences with people, and other articles talking about how little savings many people have.

Are you saying that most people don't spend almost all of their income?

Who's racking up all of that credit card debt?


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I do not think you can draw the conclusion that most people live like this from the article. Certainly people here grasp that concept very clearly. If you have data that shows this to be the case for most people in the US please show it.
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Old 03-02-2012, 09:03 AM   #57
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Seriously, no one enjoys seeing someone else have to cut spending. But I have more sympathy for a struggling ant than for a struggling grasshopper facing the cuts above.
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Does it have to be either/or?

If this was a friend of yours, wouldn't you say "that's hard" when they were talking to you about having to pull their kids out of school in the middle of the year, or thinking about how they could need to get rid of the family pet? I'd like to think that most of us would listen with a sympathetic ear, and give as much useful advice as we could.
I don't read either/or into my post to begin with...sympathetic in all cases, just not necessarily equally so.
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Old 03-02-2012, 09:31 AM   #58
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A few years ago, I worked with a guy who moved from New York City (not sure what part) to Annapolis, Maryland. All he did was gripe and moan about how expensive everything was in Maryland and how in NYC "they paid for this", "that was covered", etc.

One thing he griped about was child care. Evidently, in NYC, they had some kind of daycare thing that watched his kids, that he didn't have to pay for. But here in Maryland, he had to suddenly cough up the $250 per week or whatever it is that daycare costs. When I tried to explain to him that it wasn't really "free", that in the end the taxpayers were footing that bill, he would get mad.

I also remember him griping about the price of gasoline one day, and almost in the same paragraph mentioned something about the $200 pair of jeans he was wearing.

Needless to say, I didn't take too much pity on him.
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Old 03-02-2012, 09:49 AM   #59
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One of the problems with looking at median income etc. for NY is that there are a lot of low paid people who are young and share an apartment. Heck, my sister met someone who worked in a comedy club and said they had 9 people sharing a 2 BR apt.

It is not common for a low level person to live alone in Manhattan... in Jersy, yes, maybe in Queens...

But then again, I am only getting my info from what I was told... as mentioned, I got a free ride...
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Old 03-02-2012, 10:09 AM   #60
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I can be fairly empathetic to the actor, athlete, artist who was making 350K and gets a big pay cut and has money trouble. These people are not suppose to understand money. Somewhat less sympathetic to doctors, lawyer, owners of high end stores etc. But empathy for bankers, traders, Wall St. type, hell no. Understanding and properly managing money is their bloody job.
+1

I imagine talking to these people before the crash and telling a story about someone who started a small business, worked at it very hard, but the business failed at great cost to the owner.

I'm sure the Wall Street response would be "That's the way private enterprise is supposed to work. You take your chances and live with the result."

I read the article and I see people who took a chance on a potentially very lucrative business, and who committed to expenses that could only be supported by non-guaranteed income. It didn't work out. I expect them to say "That's the way Wall Street works. I took my chances, now I need to live with the result."
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