Documentary "Broken Eggs"

[scrabbler1]

When I was in Jr. High in 1975-77, everyone had to take one semester of Shop and one more in Home Economics. Shop was wood shop in 7th grade then plastics in 8th, while for Home Ec is was cooking in 7th grade and sewing in 8th grade.

My mom built upon what I learned in home ec, as she was good at sewing and cooking. My dad had a whole wood shop in the basement so he was glad to build upon what I learned in school.

 

[haha]

50% of all Americans have an I.Q. of 100 or less. Until there's a genetic solution to this, I can't be judgemental.

of course there is one, but the democracies soured on it after ww2

 

[Moemg]

I watched the movie and the only people I felt sorry for were the young couple with the daughter who had heart problems . The older couple were insane to buy that kind of house at their age and then wine about it .They bought a huge house but he went without health care .What are they thinking ?

 

[razztazz]

They bought a huge house but he went without health care .What are they thinking ?

I noticed this type of behavior from the time I was five years old. "Grown-ups" always liked to talk big and would have you believe they knew something and you were stupid, lazy, or otherwise deficient. As I got older I noticed that most people passing themselves off as "grown-ups" were f'cked in the head and not worth listening to.

 

[robertf57]

the only part of this that sang to me was the plight of the millennials. They stand to get screwed in this deal. The family with the little girl born with cardiac defects would be covered under insurance without pre-existing condition exclusion since 2012 and I have NO sympathy for the Bay area folks in a mortgaged million dollar home. They made their bed........

 

[daylatedollarshort]

Looks like they sold it a few months ago for ~$1.5m after paying what? $1.25m in June 2005? What's that $340k sale a month later? And ~$17k/year property taxes! Yowser!

I don't know what the $340K was for. The tax assessment was $1.275M the next year after they bought it so I think that was the market value. Like Jkern wrote I don't think the homes in Lafayette ever went down by half in price during the recession so I don't know what that talk in the video was about either. The Zillow graph shows the home price never going below the price they paid for it in the ensuing years. The only way they could have been under water is if either the Zillow historical price graph is completely wrong, or they took out a second loan when the price went up around 2006.

Ironically, there is a very nice retirement village close by to this house, also with some houses/condos with spectacular views, and the condo prices start at under $300K. Here is one I picked at random with pretty views for $309K:

http://www.trulia.com/property/3142...Pine-Knoll-Dr-6-Walnut-Creek-CA-94595#photo-1

 

[Lancelot]

50% of all Americans have an I.Q. of 100 or less. Until there's a genetic solution to this, I can't be judgemental.

I like the Winston Churchill quote 'The best argument against democracy is a five minute conversation with the average voter...'

The IQ situation will continue to plague us; too much support for its continuing.

Back OT, most of the folks in the film were simply living beyond their means. We all have wants but savy people learn to manage them

 

[mattbaxx]

I predict that in 30 years some people will be well prepared for retirement, a few will be well prepared for early retirement, and most will say, what, retirement?

 

[foxfirev5]

Oh, another thought I had on that couple that had the child with the congenital heart defect- their health insurance was $1000/mo. Ours is only $450/mo. with great coverage. We are on my husband's plan, but my company offered similar coverage. That's an extra $6600/yr. that we can put away, with no effect on our lifestyle. I wonder if they would have less expensive premiums through the ACA exchange?

It is an oft made mistake to compare heavily subsidized corporate healthcare with ACA plans. My DW and I are covered by my employer at less than $400 / month. However a similar ACA plan through our state exchange would cost $1200.

 

[mathjak107]

for us we pay 6600.00 a year in new york no subsidy ,just wife and i on small business obama plan . out of pockets on the gold plan can run as high as 6k couple.

if it wasn't a small business obama plan out of pockets could run 12,600 couple

 

[photoguy]

I don't know what the $340K was for.

Zillow often has odd sales prices recorded in a property's history. I suspect that these are from some combination of data errors and non-market sales (e.g. sale/transfer of house to spouse during divorce) but I'm not totally sure.

 

[Andre1969]

I
I went to high school in the late 70s, and we were required to take a course called Civics in either the Junior or Senior year. I can't remember if it was a whole year or just one semester. But I distinctly remember that one six-week period was dedicated to "personal finance." It covered such things as how to write a check, open a bank account, get a loan, file a tax return, contracts, insurance, savings, etc. It was pretty basic stuff, and I don't remember if it got into investments or retirement planning beyond, What is a stock? and What is a bond?

I had a Civics class in high school, but it dealt with the three branches of the government, how they work (or are supposed to work in theory ), how a bill gets passed, how to become a US citizen, etc. It had nothing to do with finance, though. I took it in 9th grade, which was 1984-85 for me, and it was a half-year course. The second half was World Geography, IIRC.

I don't know if they were offering anything about home finance by the time I went to high school, even as an elective. If they did, I didn't take it. I pretty much learned about finance through trial and error. And seeing my family's trials and errors!

 

[Andre1969]

Zillow often has odd sales prices recorded in a property's history. I suspect that these are from some combination of data errors and non-market sales (e.g. sale/transfer of house to spouse during divorce) but I'm not totally sure.

Sometimes weird pricing history will show up when a large parcel of land gets subdivided, or raw land gets built on. For instance, there's a community up the street from me that was built around 2000-2001. Many of the original prices are listed at ~$1.1M. Then soon after, the next price is around $300-$500K, then prices as high as $600-800K and as low as $300-400K again, depending on when they were re-sold.

Well, the $1.1M is what the developer paid for 34 acres of raw land. The next round of prices is when the houses were built and sold to their first owners. And then, subsequent owners.

That same developer bought a half acre lot next door to me, and built a house on it, and sold it. The transaction prices, however, show it as being purchased for around $12,000 around 1999, and $70,000 in 2000. And then $304K in 2012. The $12K is what Timberlake homes paid for the parcel. I wish I could have bought it, myself, but in 1999 I wasn't living here, and never dreamed that I would be. I think the $70K is what they sold it to the buyer for, but doesn't count the cost of building the house. And then the $304K is what it went for in 2012, when it became a short sale.

And yeah, often some of those sketchy looking prices can be sales or transfers to family members and such.

 

[Willers]

50% of all Americans have an I.Q. of 100 or less. Until there's a genetic solution to this, I can't be judgemental.

And the average financial IQ is well below that.

This week I gave merit reviews and was happy to tell someone that he would be getting a bonus of 18% of his salary. Great news, right?

Well...a concerned look came over his face and I asked him what was wrong. He explained that this was bad news because he'd so much would be taken out in taxes because of the lump sum payment. I tried to explain the difference between tax liability and withholding and that his overall taxes due would be the same regardless of the amount taken out of this individual check. I got a blank stare. I then tried to explain how to adjust withholdings to balance the take home pay. Same thing.

I know I'm not a great teacher, but I was shocked that one of my managers couldn't understand this simple concept.

It certainly seems that the general population simply isn't able to manage their finances. I am so thankful that I've taken the time to learn and understand how to save and invest. I'm also glad I have control of my investments and don't have to depend on the management (or mismanagement) of a DB plan.

I watched most of this documentary and was dismayed. These people (with the exception of the heart defect child's parents who have a legitimate challenge) thought they were doing the right thing and simply didn't understand that low salaries, huge houses, and other financial choices have consequences. It seems so obvious to those of us on this board, but to them it wasn't apparent at all. I didn't take their stories as whining. They just don't understand what they are doing wrong.

One other note is that I can't believe the millennial has his parents (with unfunded retirement needs) picking up his $150K tab for college so he can complain about fiscal irresponsibility. It seems like he should lead by example...but I guess that would be hard.

 

[marko]

And the average financial IQ is well below that.

These people (with the exception of the heart defect child's parents who have a legitimate challenge) thought they were doing the right thing and simply didn't understand that low salaries, huge houses, and other financial choices have consequences. It seems so obvious to those of us on this board, but to them it wasn't apparent at all. I didn't take their stories as whining. They just don't understand what they are doing wrong.

.

So, not only is it that "Johnny can't read", he also has no concept of the most very basics of personal fiance! (saving, interest, what you can/can't afford)

Obviously, this stuff isn't being taught in schools anymore...(but I bet everyone's "self esteem" is very high)

Not to sound like an old man, but....almost 60 years ago when I was in just the first grade, the local bank would send a lady over (I still remember: Miss McMahon) every week into class; she opened savings passbooks for us, and each week we'd give her a nickle to put into our savings accounts.

Then she'd give us a little pep-talk about savings, interest and how we could save up for something we wanted, etc.

It put a lot of us on the right path, but now I supposed a bank doing that would be ridiculed nation-wide for "selfishly trapping children into being customers".

 

[Willers]

I still remember going to the bank to get my passbook stamped. Wow, I thought, they give me money without having to do anything. Cool!

The teller I usually saw was a lot like your Miss McMahon. Once when I wanted to withdraw money and she thought it was too much she actually scolded me. No way that would ever happen now.

I also think that our low interest environment has a hidden cost. No longer do children see savings accounts grow. The lesson I learned is lost since those accounts earn nothing. The real return may have been the same but kids don't know that. They only see the dollars growing.


Sent from my iPhone using Early Retirement Forum

 

[jkern]

I don't know what the $340K was for. The tax assessment was $1.275M the next year after they bought it so I think that was the market value. Like Jkern wrote I don't think the homes in Lafayette ever went down by half in price during the recession so I don't know what that talk in the video was about either. The Zillow graph shows the home price never going below the price they paid for it in the ensuing years. The only way they could have been under water is if either the Zillow historical price graph is completely wrong, or they took out a second loan when the price went up around 2006.

Ironically, there is a very nice retirement village close by to this house, also with some houses/condos with spectacular views, and the condo prices start at under $300K. Here is one I picked at random with pretty views for $309K:

2200 Pine Knoll Drive #6, Walnut Creek CA For Sale - Trulia

The retirement community you are referring to is Rossmoore. It is very very nice there and the prices are low relatively speaking. However, the HOA's run anywhere from $800 to $1200 per month. That's my guesss why the prices are so low.

 

[daylatedollarshort]

In one of my grade school classes the teacher had play classroom money kids could earn by doing chores and extra credit and spend on privileges, like going out to recess first. I literally earned almost all the money and hoarded it. Because of me the teacher even reset the currency once, declaring all the existing currency worthless and started over, and within a month or so I had hoarded all the new currency. It was wealth inequality at its finest.

I think my financial fate was set in at least fifth grade and probably well before that. My family lived paycheck to paycheck so why am I, and many who post here, so different with money than the masses? I think some of it is just hard wired into my brain and not really anything I could change, even if I wanted to.

Maybe others have more spendy habits hard wired and it is very difficult for them to change as well. We worked with a lot of bright IT people who had IQs in the top half and still had personal money management issues.

 

[marko]

I still remember going to the bank to get my passbook stamped. Wow, I thought, they give me money without having to do anything. Cool!

The teller I usually saw was a lot like your Miss McMahon. Once when I wanted to withdraw money and she thought it was too much she actually scolded me. No way that would ever happen now.

I also think that our low interest environment has a hidden cost. No longer do children see savings accounts grow. The lesson I learned is lost since those accounts earn nothing. The real return may have been the same but kids don't know that. They only see the dollars growing.


Sent from my iPhone using Early Retirement Forum

When I was a bit older I went to the bank to withdraw about $9 for a baseball glove. After the withdrawal, I looked at the passbook and told the teller that they had made a mistake...that there was the same balance as before the withdrawal. She said, "no, you made $9 in interest!".

I got back to the car and told my dad. He said: "see, that's how rich people do it...they live off the interest".

Obviously, it made some sort of impression on me.

 

[growing_older]

How did you manage to collect all the money in your class?

Obviously, this stuff isn't being taught in schools anymore

Never was taught in any school I ever attended. We all had to learn this on our own, but obviously some people didn't actually learn much about delayed gratification and savings.

 

[daylatedollarshort]

The retirement community you are referring to is Rossmoore. It is very very nice there and the prices are low relatively speaking. However, the HOA's run anywhere from $800 to $1200 per month. That's my guesss why the prices are so low.

Still it would be a more frugal choice than a $1.25M house, and they could live in the same area with the same views, friends, shopping, activities, parks, etc. without all the financial angst or upkeep costs of a 3,300 sq foot, built in the 80s home and 1 acre lot.

House price $1.25M => $300K condo. If they put 20% down on the house that could cover most or all the entire price of a condo.
Property tax $17K a year => $3.75K
Energy $600 month => ~$60 month or less.
Maintenance of 1% per year on a $1.25M house is $12.5K = with the condo the exterior maintenance would be included in the HOA fee and in the condo link I posted the interior looked like it wouldn't need any updates for years to come.

 

[Bestwifeever]

Looks like they sold it a few months ago for ~$1.5m after paying what? $1.25m in June 2005? What's that $340k sale a month later? And ~$17k/year property taxes! Yowser!

Maybe it's a home equity loan? Somewhere it is mentioned that this couple had a second home, I believe--maybe a heloc financed that?

 

[daylatedollarshort]

How did you manage to collect all the money in your class?

I don't remember everything but I would stay after school and clean the boards (chalk boards in those days) and do extra credit. One extra credit assignment was to bring in pictures of healthy foods when we were studying nutrition. The other kids maybe brought in one or two pictures and I had a couple of shopping bags full.

 

[modhatter]

I think there should be a mandatory class taught during your junior or senior year in high school in real life economics, concerning the importance of saving for retirement, what 401-K's and Ira's are and how they work. How you have to start saving from day one in the job market. What to expect without a college degree or special technical training (your income prospects).

Budgeting according to your income for retirement and LBLM. In fact mandatory reading of a book like "The millionaire next door". And most importantly learning about the stock market, index funds, mutual funds,detrimental fees, bonds, etc.

In other words teaching some real life useful and important information
With that 3rd leg of retirement missing, we better be well informed about that second leg.

 

[marko]

In other words teaching some real life useful and important information
With that 3rd leg of retirement missing, we better be well informed about that second leg.

What? You don't use the Pythagorean Theorem every single day of your life??