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Old 06-02-2009, 08:27 AM   #101
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BTW, in contrast to the sniveling NYT writer profiled above, see the good story in the WSJ today, provocatively titled "From Ordering Steak and Lobster, to Serving It".
Former Wall Street Employees Forced to Accept Low-Wage Work - WSJ.com

This sounds like a guy who is going to make it out of the downturn, albeit without his nice house and former salary. He's not whining, he's just doing what he has to do for his family. I liked this piece a lot, in contrast to most of the other sob stories out there.
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Old 06-02-2009, 09:01 AM   #102
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BTW, in contrast to the sniveling NYT writer profiled above, see the good story in the WSJ today, provocatively titled "From Ordering Steak and Lobster, to Serving It".
Former Wall Street Employees Forced to Accept Low-Wage Work - WSJ.com

This sounds like a guy who is going to make it out of the downturn, albeit without his nice house and former salary. He's not whining, he's just doing what he has to do for his family. I liked this piece a lot, in contrast to most of the other sob stories out there.
That guy actually seems like he deserves sympathy. He did most things right, and still ended up in a rough position. He had an emergency fund, put 20% down on the condo, no credit card debt, etc.

At least he's willing to work for something, and not just complain about his poor predicament.
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Old 06-02-2009, 09:52 AM   #103
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This guy definitely did things way smarter than our good friend from the NYTimes.

However, I still question how someone earning $250k a year for what was a fair stretch of time, can really have so little. They were managing their money, however they obviously were living to the max it would allow.

I do hope they make it through, because they have the right attitude.
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Old 06-02-2009, 12:06 PM   #104
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This guy definitely did things way smarter than our good friend from the NYTimes.

However, I still question how someone earning $250k a year for what was a fair stretch of time, can really have so little. They were managing their money, however they obviously were living to the max it would allow.

I do hope they make it through, because they have the right attitude.
The problem is that NY is much different than most other places... he bought a place for almost $1 mill... and I bet it is in the 1,000 to 1,200 sq ft range... not big at all... and in addition to the mortgage, you have to pay your condo fee which can be an additional $1,000 to $2,000 per month... groceries are much more expensive in NY... I can tell you that I probably shopped at the store he shops at now... and it is small with high prices..

Not to say they could not make some other choices and save some money, but the people I knew who did that had a 1 to 2 hour commute each way... so their family life suffered...

Maybe he should become a waiter... I had heard that they can make over $100K in the high end places... that is much better than the $25K he is getting now...
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Old 06-02-2009, 02:53 PM   #105
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"The problem is that NY is much different than most other places... he bought a place for almost $1 mill... and I bet it is in the 1,000 to 1,200 sq ft range... not big at all... and in addition to the mortgage, you have to pay your condo fee which can be an additional $1,000 to $2,000 per month... groceries are much more expensive in NY... I can tell you that I probably shopped at the store he shops at now... and it is small with high prices..

Not to say they could not make some other choices and save some money, but the people I knew who did that had a 1 to 2 hour commute each way... so their family life suffered...

Maybe he should become a waiter... I had heard that they can make over $100K in the high end places... that is much better than the $25K he is getting now..."

I would disagree. I can buy groceries in NYC for less than in some suburban areas of the south, and living in the FD gave him easy access to fresh fish, meat, and produce in Chinatown - very high quality and inexpensive. He also bought an apartment with a mortgage that 1/3 his considerable gross income, but which was at least two or three times what a rental would cost, in a city where renting is not a crime. The problem was that he and his wife lived beyond what his salary could support. Steak, lobster, and $200 bottles of wine do not help one save for retirement or a rainy day. He laments having exhausted his emergency fund which, with a single income, should have been at least 12 months living expenses.

If we contrast him with examples from The Millionaire Next Door, we find that he wanted the appearance of being rich, while the real millionaires would rather have the reality. Rather than "doing everything right", he and his wife allowed lifestyle inflation to imperil their financial futures.
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Old 06-02-2009, 06:10 PM   #106
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NY might be an expensive city, but living here in California in Silicon Valley is not cheap. We all have choices to make to ensure that we live below our means. He purchased a place for $1m - for us to purchase in this area is probably not much less, though we could expect more for our money than a 2 bed 2ba apt. The house we rent was on the market for $1.5m and believe me it is a knockdown. So our choice is to rent in an area we enjoy rather than moving to a more affordable area which would extend my DH's commute. He talks about day care as if his children were there before he lost his job and I am assuming (could be wrong) that his wife was not working before. Then there are all the activities the children did.

I do hope this guy manages to come out the other side, as he sounds like a decent guy, all I am saying is if you make $100, don't live on $99 and save the other $1, take a good look at your budget and see what you can do to increase the amount you can save.

I think the problem is the higher people go in salary brackets the more compelled they feel to keep up with the Jones'.
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Old 06-02-2009, 06:34 PM   #107
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That guy actually seems like he deserves sympathy. He did most things right, and still ended up in a rough position. He had an emergency fund, put 20% down on the condo, no credit card debt, etc.

At least he's willing to work for something, and not just complain about his poor predicament.
I agree he deserve sympathy. An emergency fund is only suppose to last you for 6 months, he has been un/underemployed for two years. A 960K condo sounds like a lot but in relation to $200K salary not outrageous.

Now compared to the frugality expressed on the board, sure he was a spend thrift, but compared to a typical American, he was doing pretty well.

His story remains me of a friend in Silicon Valley, as a senior engineer, who has been out of work for almost two years and is hoping to get a job as mailman. He doesn't travel much, but he loves fine food and wine. He had couple hundred saved up but between the market and not working it is going fast. He is hoping that can back to work before he is forced into using his 401K.
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Old 06-02-2009, 06:45 PM   #108
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Wasn't a typical home:salary ratio no more than 3:1? Certainly 5:1 was never typical.
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Old 06-02-2009, 06:58 PM   #109
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Wasn't a typical home:salary ratio no more than 3:1? Certainly 5:1 was never typical.

When I bought my first home the ratio was 3:1 but that was when mortgage rates were 12%+. My first mortgage was 13.75%. I would assume that 5-6% would allow a higher ratio.
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Old 06-02-2009, 07:35 PM   #110
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Reminds me of when I bought my first property - it was a 1 bedroom apt. not in a location that would ever been featured on House Hunters. The mortgage interest rate was 18% and eventually crept up to 21%. Makes me grateful when I see how low rates are these days.
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Old 06-02-2009, 09:00 PM   #111
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I would disagree. . . .
Yup, plenty of people manage to live and work in NY, and most don't earn even close to $200K.

On the other hand, there aren't too many people who can survive a permanent reduction in their income of 90%.
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Old 06-03-2009, 07:21 AM   #112
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I also read that article and was struck by how this person could not translate his specialized skill set into another high paying job. Granted, he has no college degree. I wonder how common this is for laid off Wall Streeters?
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Old 06-03-2009, 08:16 AM   #113
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"When I bought my first home the ratio was 3:1 but that was when mortgage rates were 12%+. My first mortgage was 13.75%. I would assume that 5-6% would allow a higher ratio."

Therein lies the rub. The artificially low interest rates have convinced people that they can safely take on more debt, when in reality it makees them very vulnerable to the exigencies of life and even minor fluctuations in interest rates or property values. This gentleman is upside down on his loan because in reality he took on more debt than he could afford to.

"On the other hand, there aren't too many people who can survive a permanent reduction in their income of 90%. "

So this family now has a take home of $4,000 per month. There are an awful lot of New Yorkers getting by with less. Perhaps he should ask his father the cab driver how he survives. I certainly wouldn't want to experience a dramatic drop in my income, but even though I am of modest means, I manage to well below my income, knowing that sometimes life happens, and having been in dire circumstances in the past I have no desire to repeat them.

The upshot is this gentleman quit school to enter a field which will likely never return to its former froth, and who has no translatable skills. The same could be said about a lot of bankers, broker, and mortgage brokers - the world has a lot more salesmen than things to sell. If he were serious about the future of his family, he would explore retraining for a more sedate but more secure career, but then again, he may "deserve" more than that.
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Old 06-03-2009, 10:53 AM   #114
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I think he needs to move even if it costs him on the house, and he should have done it before his finances reached this point. Retrain, crosstrain, do what he had to do to get a new career going but do it somewhere else as I'm sure a motivated intelligent man can find a way to make $25k in a far less expensive area.

Say what you want about buying cheaper groceries than in a suburb somewhere but bottom line the monthly grocery savings are insignificant (what could it be $100 per month?) compared to his other costs living in NYC.
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Old 06-03-2009, 11:52 AM   #115
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I suspect he ever worked as a trader. Maybe a trader asistant and very short period as junior trader. 200k is kind of low for a seasoned trader. Maybe I am wrong.

He is over streched as with 200k income. One trader I know, cuts grass himself and complains $7 lunch expensive. But he takes home 500k+. I doubt he ever tried $200 wine, maybe in company expense?

Trader's skills worth little on other industries, if they ever have some skills, especially for a pit trader. Structured products, another story I have to say.

His past is very lucky. Now just back to normal. He is not lucky enough to keep the fortune.
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Old 06-03-2009, 12:01 PM   #116
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The upshot is this gentleman quit school to enter a field which will likely never return to its former froth, and who has no translatable skills. The same could be said about a lot of bankers, broker, and mortgage brokers - the world has a lot more salesmen than things to sell. If he were serious about the future of his family, he would explore retraining for a more sedate but more secure career, but then again, he may "deserve" more than that.

He is waiting for the cap and trade to be passed... just think of all the laid off people who will get a job when that law passes...
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Old 06-03-2009, 07:34 PM   #117
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The upshot is this gentleman quit school to enter a field which will likely never return to its former froth, and who has no translatable skills. The same could be said about a lot of bankers, broker, and mortgage brokers - the world has a lot more salesmen than things to sell. If he were serious about the future of his family, he would explore retraining for a more sedate but more secure career, but then again, he may "deserve" more than that.
I have to agree with that. Although this guy seemed to be doing many things right (sounds like he had a pretty good emergency fund stashed away). But when I read he was making $200K with a HS education, in a job where the skills are not really transferable, well - that should be a red, or at least yellow flag for the guy.

Like someone in pro sports that isn't in the level to make the big endorsement bucks - you might be making a good salary, but you sure can't count on that for more than a few years. IMO, this guy needed to find a way to live *way* below his means. But I'll still give him credit for making some hay while the sun was shining, and saving what he did. Something tells me he has enough smarts that he will find a way to make it work out.

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Old 06-03-2009, 08:03 PM   #118
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The fact that this man's $200K/year salary is fleeting should not be surprising, considering the training and experience that he possessed for that pay. During the housing mania, I knew a guy whose wife took a part-time job at a mortgage processing joint. She made $85K for a part-time clerical work! It appeared they were rolling in dough and were dishing it out to every worker. I thought that was high until I read (from this forum perhaps) about some women who went out to solicit loan applications. They made near $1M. Good grief! No wonder the economy crashes that hard.

Even in other fields, high-pay jobs may not last long. During the late 90s, I helped a friend who had a small consulting firm, whose clients were telecoms. This small firm employed workers of 20-30 years experience with MS or PhD degrees in math, physics, and engineering.

The standard consulting fee back then was $1K/day, travel and per diem expenses extra. They were not living high on the hog as they knew it might not last. Sure enough, the telecom meld-down hurt them in 2000. In addition, their clients developed in-house expertise to save costs. So, they disbanded and some went back to work as regular megacorp employees.

PS. It appears that "permanently high-paying" jobs exist only in a few fields such as medical or law. Else, you have to be in the upper-management club to write your own checks. I don't think small-business owners would have the income security of the forementioned groups.
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Old 06-03-2009, 09:07 PM   #119
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BTW, in contrast to the sniveling NYT writer profiled above, see the good story in the WSJ today, provocatively titled "From Ordering Steak and Lobster, to Serving It".
Former Wall Street Employees Forced to Accept Low-Wage Work - WSJ.com

This sounds like a guy who is going to make it out of the downturn, albeit without his nice house and former salary. He's not whining, he's just doing what he has to do for his family. I liked this piece a lot, in contrast to most of the other sob stories out there.
This guy is a d*uchebag who gave into temptation and peer pressure and assumed that even after the good times ended his high school diploma would let him earn 200+k.

I made in the ballpark what he did during the boom timesworking in the NYC area. I worked in an area that was a long commute but was extremely affluent (think top .1% of the country). There was a Bentley dealership down the block from work and most of the merchants looked at me like I was a homeless person coming in for a handout when I went shopping in my middle class mass merchant clothing. It was very, very, VERY tempting to join in with all the idiot consumption. Buit I resisted. Partially it was because I was wary and partially it was because I just don't enjoy consumption that much. But to suggest that some idiot who bought a $1MM (!) co-op deserves sympathy? Please.
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Old 06-03-2009, 10:29 PM   #120
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You guys are killing me! Laughable loser marries ethicless scammer and profits from book proceeds. Gawd I hope not.
Times should can him. How could this dufe teach me about finance?
Times should apologize for paying dufes to write and insult the intelligence of their readers,
Times should apologize for poor vetting (for god sakes what % of US population has decared BK twice?, I hope it's miniscule). As previously mentioned % of Bk with income over 100k is small what is % of this group has filed twice? Who in good conscious would give this POSh#t money by buying their book? They are totally out of control and have nothing to teach us that mom didn't splain before we were three.
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