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Re: Book report: *The Two-Income Trap
Old 04-05-2005, 05:39 AM   #21
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Re: Book report: *The Two-Income Trap

Nords,
thanks for the book report. Put myself on the waitlist at the library.

Eagle43...nicely said.

Recently talked with someone who voluntarily boasted (?) "we live paycheck to paycheck and we make $10,000 a month!" When asked where does the money go, an airily wave of the hand and light-hearted laugh "Who knows?"

BTW:
What's EOR?
HELOC?
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Re: Book report: *The Two-Income Trap
Old 04-05-2005, 06:30 AM   #22
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Re: Book report: *The Two-Income Trap

HELOC - Home equity line of credit
EOR - End of don't know this one.
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Re: Book report: *The Two-Income Trap
Old 04-05-2005, 06:39 AM   #23
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Re: Book report: *The Two-Income Trap

Quote:
BTW:
What's *EOR?
"End of rant."

Similar to [rant][/rant].
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Re: Book report: *The Two-Income Trap
Old 04-05-2005, 07:03 AM   #24
 
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Re: Book report: *The Two-Income Trap

Nords,

Am I right, that it is about 3 or 4 in the morning where you are at? - My question is - do you stay up this late or get up this early?
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Re: Book report:  The Two-Income Trap
Old 04-05-2005, 07:50 AM   #25
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Re: Book report:  The Two-Income Trap

Another trap or delima is that we now have to pay for alternative minimum tax - bummer.
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Re: Book report:  The Two-Income Trap
Old 04-05-2005, 07:56 AM   #26
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Re: Book report:  The Two-Income Trap

Spanky, do you have a good source on how AMT works? Every time I try research it, I get ambiguous answers at best. I wish I had some sort of chart showing x income = y AMT, ya know?
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Re: Book report: *The Two-Income Trap
Old 04-05-2005, 08:09 AM   #27
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Re: Book report: *The Two-Income Trap

The constant "message" in the above thread is LBYM.

Far too few Americans understand that truism.

And, yes, advertising is one of the catalysts which play upon one's own avarice to encourage consumption beyond common sensical levels. Self-restraint, however, is a virtue which is far too often undervalued in Western culture.

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Re: Book report: *The Two-Income Trap
Old 04-05-2005, 09:12 AM   #28
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Re: Book report: *The Two-Income Trap

I see it all to often with my co-workers. New cars, a new boat, refinancing constantly. One lady bought her home for $180,000 ten years ago and now owes $240,000. Go figure that one! My husband and I keep saving and stay on our course for an early retirement. Last summer, sent in the last mortgage payment. The finance company sent us a letter a week later trying to "loan" us money. Letter went into the trash. I have about five friends who have filed bankruptcy --totally due to overspending on needless items and no sense of self-control. It is totally a great feeling knowing you can just get up from your desk and walk out the door and not worry about where your next paycheck is coming from.
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Re: Book report: *The Two-Income Trap
Old 04-05-2005, 10:34 AM   #29
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Re: Book report: *The Two-Income Trap

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Nords,
Am I right, that it is about 3 or 4 in the morning where you are at? *- My question is - *do you stay up this late or get up this early?
The timelog says I posted that at 3:39 AM HST.

Once in a great while I'll be up later than 10 PM, but this family is early-to-bed. Despite being only 12 the kid has been going through tremendous growth spurts for years. Bedtime starts at 8 (since she was in preschool) and she usually crashes before 9 for a 6:30 AM wakeup. We've learned to dread the nights before a big test/project or the mornings after an unusually big growth spurt.

Spouse also needs 8-10 hours every night. I don't know how she can stand it but I can't argue sleep habits with her double-digit blood pressure.

I can only handle 5-6 hours at a time (unless it's been a very harsh tae kwon do workout) and an occasional 30-minute afternoon nap. So I'm usually asleep by 9 and up around 3 or 4 AM. I don't know if it's a product of all those years of the morning watch or a hyperactive brain, but I don't roll over and go back to sleep. It's probably a learned habit-- I really enjoy that early-morning "quiet time" with a cup of coffee and a Ko'olau sunrise.

You Mainlanders just went on DST while we stay on HST year-round, so Hawaii is now three hours earlier than the West Coast and six hours behind the East.
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Re: Book report:  The Two-Income Trap
Old 04-05-2005, 05:15 PM   #30
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Re: Book report:  The Two-Income Trap

I also read The Two-Income Trap and was motivated to write a review, but from a different point of view... I found the authors' logic to be highly problematic, to put it nicely, and on many occasions I felt like throwing the book across the room. This is what I ended up saying about it:

http://www.spendingwisely.com/articles/0409/000039.html
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Re: Book report:  The Two-Income Trap
Old 04-05-2005, 05:26 PM   #31
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Re: Book report:  The Two-Income Trap

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Spanky, do you have a good source on how AMT works? Every time I try research it, I get ambiguous answers at best. I wish I had some sort of chart showing x income = y AMT, ya know?
Laurencewill,

I am not sure. I think AMT applies when income is over $150K and deduction exceeds a certain amount.

The following link explains AMT and what might trigers AMT: http://www.fairmark.com/amt/

Spanky
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Re: Book report: *The Two-Income Trap
Old 04-06-2005, 04:03 AM   #32
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Re: Book report: *The Two-Income Trap

I enjoyed your review Holly. I read it (well skimmed it for 1-2 hours in the library) and I got to the same conclusion. Cheers!


Quote:
I also read The Two-Income Trap and was motivated to write a review, but from a different point of view... I found the authors' logic to be highly problematic, to put it nicely, and on many occasions I felt like throwing the book across the room. This is what I ended up saying about it:

http://www.spendingwisely.com/articles/0409/000039.html
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Re: Book report: *The Two-Income Trap
Old 04-06-2005, 07:06 AM   #33
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Re: Book report: *The Two-Income Trap

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... and on many occasions I felt like throwing the book across the room.
I'm going to stay out of your library's reading room!

The book evoked a strong emotional reaction for me, too, but I wonder if the authors were trying to avoid that. I'm no shill for the Warrens but I think they're much more likely to be implemented by society than by your approach.

I think they've decided that the solution should involve campaigning for various govt/corporate controls. Yes, people have to be personally responsible, but I think the Warrens are trying to help blissfully-ignorant readers to avoid minefields that they may not recognize no matter how responsible they think they are. As every parent has learned, an audience can't be educated by shaking a warning finger at them. Warrens are analyzing the "logic" that the bankruptcy filers have used and then they're framing solutions that are likely to be applied by those who've used that flawed logic. They're not trying to change the way that people "think", only the practices that exploit the people's response.

There's a lot that needs saying about public education and the corporate financial industry. Both are motivated by the highly attractive profits gained from exploiting their customers' emotional reactions. If the organizations are providing a public service, then they're doing a bad job of it. Others with a "strictly business" or a "what's best for the customer" approach are also failing. Just as the electric company and the waterworks are regulated by govt legislation, perhaps the "fix" for rising personal bankruptcies involves legislation targeting education & financial organizations instead of passing harsher bankruptcy laws aimed at the "customers". I'm not saying that the bankruptcy legislation that just passed is all bad, but I am saying that the education & financial organizations need fixing far more than 1.5 million people.

Yes, we should all be responsible. Yes, we should all save our money. Yes, we should all spend it on assets that have value and perhaps we should negotiate the price to enhance that value. We shouldn't waste our money on "assets" that are priced by emotion. But in a world filled with cognitive dissonance, I don't know anyone on my street who's likely to apply that logic to either the stock market or to their family savings. They're simply not aware of the details of investor psychology or of predatory financing, and even if they were aware they'd feel that somehow they're avoiding those pitfalls by applying their own innovative (illogical) solutions.

Speaking of emotion and a lack of personal responsibility, I think the authors provide extremely valuable advice: "It is okay to splurge on extras. Never mind the dour looks from the Over-Consumption camp. So long as you are staying out of debt and putting something away in savings, you should feel free to buy the kids a new pair of Nikes or treat yourself to a night on the town. If the tough times come, you can drop those expenditures in a heartbeat."

I think that everyone should have a budget category for this and call it "Entertainment". To expect people to behave otherwise is to overlook the fact that we're all human (or should be) and that we're not going to do the logical thing by deferring all discretionary spending until we've built up that 3-6 month savings account.

I guess a Harvard law professor will see every solution as political and corporate. Or at least a lot more likely to be implemented than anything achieved by finger-shaking admonitions.

And a book like theirs is definitely more likely to be purchased by that same audience. I don't think that preaching personal responsibility has the same marketability...
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Re: Book report: *The Two-Income Trap
Old 04-06-2005, 07:10 AM   #34
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Re: Book report: *The Two-Income Trap

Holly,

I enjoyed your report. There are several bad assumptions in this book judging by the posts here and your report. One that hasn't been touched on directly so far is the fallacy of the "good" school. Education starts and ends with the parents. It always has and always will. School provides a structured learning environment for both social and "book" skills. In my opinion, chasing less affordable housing in more affluent neighborhoods so the kids can attend a good school is more of a feel good thing for the parents rather than a true benefit for the kids.

Cheers,

Chris
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Re: Book report: *The Two-Income Trap
Old 04-06-2005, 09:02 AM   #35
 
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Re: Book report: *The Two-Income Trap

Holly,

Your review is right on target...I have seen these two authors on various TV shows analyzing the budgets of various families and their message (loud and clear) is that bankruptcy is a "get out of jail free card" to be used by anyone who gets in to debt for any reason. After all, they reason, corporations go into bankruptcy as part of a business plan and there are not ashamed, so why should consumers not have the same option for whatever reason, even out- of- control spending!

The blame should not be on credit cards or medical bills or umemployment or divorce, but on not building the nest egg necessary to handle life's problems. We live in a society that wants it all now. These authors feel that that is OK and that the easy answer is bankruptcy...

Their follow-on book "All Your Worth" makes that abundantly clear!
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Re: Book report: *The Two-Income Trap
Old 04-06-2005, 12:59 PM   #36
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Re: Book report: *The Two-Income Trap

Holly, I really enjoyed your review, and your site. I've been a Simple Living fan for years. Thanks for the link.

About the book, you said what I would say if I were more articulate.

I see dozens of examples every day of the increasingly distressing pin-the-blame-on-someone-else game. It boggles my mind.
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Re: Book report:  The Two-Income Trap
Old 04-06-2005, 01:17 PM   #37
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Re: Book report:  The Two-Income Trap

Holly, great site, and I read your "about me" page. Competitive fencing, PH.D. and UMass Amhurst, and you like Babylon 5 to boot! I love that show, so mad when the shortened it to 4 seasons instead of 5 (or was it 5 instead of 6?) and wrapped up the story line way too quick. Glad to have you in my (SoCal) neck of the woods!
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Re: Book report:  The Two-Income Trap
Old 04-06-2005, 01:18 PM   #38
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Re: Book report:  The Two-Income Trap

Thanks Spanky, I guess I'll have to worry about AMT at some point if they don't change the law....
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Re: Book report: *The Two-Income Trap
Old 04-06-2005, 01:57 PM   #39
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Re: Book report: *The Two-Income Trap

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*There are several bad assumptions in this book judging by the posts here and your report. *One that hasn't been touched on directly so far is the fallacy of the "good" school. *Education starts and ends with the parents.
Chris
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H. L. Mencken, who wrote in The American Mercury for April 1924 that the aim of public education is not
to fill the young of the species with knowledge and awaken their intelligence. ... Nothing could be further from the truth. The aim ... is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardized citizenry, to put down dissent and originality. That is its aim in the United States... and that is its aim everywhere else.
To produce good little Dilberts!

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