If any of you have seen the Misery Index, an index that tracks the people affected by foreclosure or bankruptcy throughout the recession, you’ll notice that Nevada is the worst state to live in. One out of every 20 people living in the state suffered from such an event.
Bankruptcy is a process that will never make sense to me. Buy all the crap you want and then tell the bank you don’t understand why you just don’t seem to have enough money to support the extravagant lifestyle. It’s like a prostitute who doesn’t understand why she has crabs.
Someone I work with said it’s easy to become a millionaire. The way he did it? He took out loans, bought a bunch of cars, a massive house, and lots of other toys he had no business purchasing with his measly income. His mathematical formula for millionairism? Value of brand new truck, plus value of brand new Mercedes, plus value of brand new bullet bike, plus value of brand new ski boat, plus value of brand new house in the bay area, plus positive cash in bank accounts. Therefore it is easy to become a millionaire based on the assets that you accumulate.
The hard part was when he moved to Idaho. He didn’t sell the house for as much as he was hoping for and he lost about $15,000 on each of his five cars and trucks. The result, he picked up smoking to alleviate the stress. Good thing he picked up a cheap hobby. He could have picked up sky-diving but he went with the more cost efficient hobby.
On the other hand, some people don’t necessarily file fore bankruptcy because they lived the extravagant lifestyle. It’s because they just suck at managing their money. Another douche bag I work with told me his mother-in-law had to file for bankruptcy because her hours had been slightly reduced. Understandable I suppose until you realize that she lives in a house with two other families, and she only pays a third of the rent. She shares two cars with the other families in the house.
One of the families in this house is this particular douche bag. Money management skills must be hereditary because he is headed down the same road as his mother-in-law. He gets paid management pay, has a second job, sells his plasma, and still never seems to have enough money.
He only pays a third of the rent since his family lives with his mother-in-law, he only has one child, and he doesn’t own any cars, never has. In fact, the only set of wheels that he has ever owned was a Liahona bicycle that was given to him. He doesn’t have life insurance, no health insurance, no 401k, and no savings. In fact, for a while he would pawn off his guitar for $15 and then buy it back later in the week for $25 after he picked up his paycheck so that he would have enough money to put food on the table.
It must suck to be stupid.
The odd thing is that many of the people that file for bankruptcy show up at the bank with their iphone and drive to their hearing in a BMW. The poor money management skills aren’t a result of the economy; it’s greed, laziness, and ultimately self-stupidity.
Remember Bernie Madoff? He appeared to be worth a lot more than he really was. He lived a lavish lifestyle, and when it finally caught up to him, he received 150 years of free government housing. He lived a lie.
Those who ultimately file for bankruptcy are exactly the same. They live a lavish lifestyle that their inadequate income couldn’t support. They live as if they are worth a lot more than they really are. They live a lie just as Bernie Madoff did. Seems to me that the punishment should coincide.
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts
Saturday, August 1, 2009
Friday, July 10, 2009
For the unemployed, underemployed, underpayed, .....
The unemployment numbers that came out last week created a buzz that even a bee would tire of. The entire focus was on the 9.5% of American workers that have no work. No one talks about the 14% that are underemployed, or the average workweek that has dropped to 33 hours from 36 just a year earlier. I guess the optimist would say that you would be getting overtime in Europe.
There’s a few pieces of advice I could give to those who are unemployed and underemployed. First of all, don’t suck at work. As a typical blue-collar worker, I know which of my fellow employees would be first to go. These future statistics have one thing in common, they don’t work. They just stand around, talk, drink, eat, and surf the internet.
Second, don’t be too lazy to find another job. You know that trailer park about 4 blocks from where you live? Every one of those illegal immigrants have a job. You know that because if they didn’t, they would migrate to Canada. What is it that they are doing? Oh yeah, they work. What got you collecting unemployment? That’s right, you were being paid to talk, text, and watch the Office while you should have been selling paper.
What is it that is preventing you from working on a farm? No internet? I understand that those strawberries get pretty heavy, but breaking a sweat won’t damage your skin to the extent that Mary Kay couldn’t fix it.
My third piece of advice is to get creative. How many of you have been unemployed for more than six months? A year? What do you do during your 24 hours of daily down time, sitting around, texting, drinking and eating, watching The Price is Right? There’s something better to do than watching your soaps. Creativity is what got Bill Gates rich. Creativity is what got Warren Buffet rich.
And speaking of Warren Buffet, the guy seems to have an endless supply of money making ideas. He auctioned on Ebay the opportunity to eat lunch with him. $1.8 million later, some Canadian with a job has a lunch date with the world’s richest man.
Perhaps you could auction off time with yourself. Lunch, dinner, bed, there has to be something. Your life can’t be that pitiful, can it? I guess that’s why you are unemployed.
Kyle MacDonald’s creativity basically got him a free house. He started out with a single red paper clip and through a series of trades, eventually landed himself in a house in Canada. The house looks crappy, but it’s better than the single wide that you are currently sporting.
One of the most creative ideas came from the man who created the NASDAQ. Bernie Madoff created $65 billion dollars out of nowhere. His ponzi scheme that stole billions of dollars from investors landed him in jail for 150 years. He’s serving one year for every $430 million he stole. How many of you would be willing to serve for one year for that much money. Then do it.
There’s another person I know that just gets free stuff ad resells it. He recently sold a couch that was given to him for $50. That couch was replaced by another couch that was given to him.
That principle reminds me of the stock market. Buy something cheap, sell it for more expensive, make a few dollars.
My final piece of advice is to quit blaming everyone else. Potential employers don’t want to hear about how you were screwed by the guy that occupied the cubicle next to yours. They aren’t going to want to hear about how you were just a victim of the poor economy. They don’t want to hear that you sat on your recliner for the past 15 months while collecting unemployment.
For those who have jobs, keep in mind that the only thing that is keeping you from becoming another statistic is that there may be someone else that sucks at working more than you, and if there isn’t, keep in mind that you are simply hurting the economy by not contributing to the GDP.
There’s a few pieces of advice I could give to those who are unemployed and underemployed. First of all, don’t suck at work. As a typical blue-collar worker, I know which of my fellow employees would be first to go. These future statistics have one thing in common, they don’t work. They just stand around, talk, drink, eat, and surf the internet.
Second, don’t be too lazy to find another job. You know that trailer park about 4 blocks from where you live? Every one of those illegal immigrants have a job. You know that because if they didn’t, they would migrate to Canada. What is it that they are doing? Oh yeah, they work. What got you collecting unemployment? That’s right, you were being paid to talk, text, and watch the Office while you should have been selling paper.
What is it that is preventing you from working on a farm? No internet? I understand that those strawberries get pretty heavy, but breaking a sweat won’t damage your skin to the extent that Mary Kay couldn’t fix it.
My third piece of advice is to get creative. How many of you have been unemployed for more than six months? A year? What do you do during your 24 hours of daily down time, sitting around, texting, drinking and eating, watching The Price is Right? There’s something better to do than watching your soaps. Creativity is what got Bill Gates rich. Creativity is what got Warren Buffet rich.
And speaking of Warren Buffet, the guy seems to have an endless supply of money making ideas. He auctioned on Ebay the opportunity to eat lunch with him. $1.8 million later, some Canadian with a job has a lunch date with the world’s richest man.
Perhaps you could auction off time with yourself. Lunch, dinner, bed, there has to be something. Your life can’t be that pitiful, can it? I guess that’s why you are unemployed.
Kyle MacDonald’s creativity basically got him a free house. He started out with a single red paper clip and through a series of trades, eventually landed himself in a house in Canada. The house looks crappy, but it’s better than the single wide that you are currently sporting.
One of the most creative ideas came from the man who created the NASDAQ. Bernie Madoff created $65 billion dollars out of nowhere. His ponzi scheme that stole billions of dollars from investors landed him in jail for 150 years. He’s serving one year for every $430 million he stole. How many of you would be willing to serve for one year for that much money. Then do it.
There’s another person I know that just gets free stuff ad resells it. He recently sold a couch that was given to him for $50. That couch was replaced by another couch that was given to him.
That principle reminds me of the stock market. Buy something cheap, sell it for more expensive, make a few dollars.
My final piece of advice is to quit blaming everyone else. Potential employers don’t want to hear about how you were screwed by the guy that occupied the cubicle next to yours. They aren’t going to want to hear about how you were just a victim of the poor economy. They don’t want to hear that you sat on your recliner for the past 15 months while collecting unemployment.
For those who have jobs, keep in mind that the only thing that is keeping you from becoming another statistic is that there may be someone else that sucks at working more than you, and if there isn’t, keep in mind that you are simply hurting the economy by not contributing to the GDP.
Saturday, May 30, 2009
Shelter Shakeup
Since the housing market has taken quite a hit over the past couple years, and the Fed and the government has taken drastic measures to try to revive the market, the big question is what lies ahead for buyers and sellers for the next two, three, ten years. Only time will provide an accurate story, but there is no shortage of guesses from prognosticators. While buyers are enjoying low interest rates and sellers are smiling at the first time homebuyers trying to take advantage of the $8,000 credit, buyers and sellers will be frowning at what the future may hold, perhaps within the next year.
So lets look first at the present situation. Low interest rates make refinancing more attractive for current homeowners looking to refinance. Ironically, that was one of the forces that pushed the needle into the housing bubble. First time homebuyers taking advantage of the $8,000 tax credit have until December to sign the papers saying they will take over an asset that will lose its value for a couple more years. Sounds like a great idea to me.
Sellers are not selling their houses for as much as they would like because they bought their houses 5 years ago thinking that they could double their equity three years later. These are probably the same people who invested their life’s savings into Bear Stearns stock. Sellers are happy about the attractive deals that are out there for homebuyers though because that means two more people are willing to at least drive by to see the exterior.
The future seems to look a lot more bleak for both of these groups.
With the lowest interest rates ever, and all the money that has been pumped into the system, rates will go up, a lot more than the average Joe is going to realize. Economists are thinking perhaps 7.5% to as much as 15% within the next year or two. This would be necessary in order to curb inflation. We do not want to become the next Zimbabwe. But with all the money that was pumped into the system, would 15% really be enough? But lets just say interest rates rose to 15%. Would you take out a loan to buy a house? I think I speak for most when I say I wouldn’t unless the sellers dropped their asking prices. So that is exactly what will happen.
Housing prices will drop so that buyers will drive by to see the fresh paint on the exterior. Sellers will lose a ton of money selling the house, and buyers are going to grab their ankles as they volunteer to pay high interest rates on their mortgages.
The positive side for sellers is that if they sell their houses soon, they could just invest their money in a really strong company, perhaps General Motors.
So what does this mean for homebuyers in the future? If you have the money to throw down on a house in a couple years when housing prices may hit bottom, it may not be a bad idea. If you don’t have enough money for a house, good luck. You could just invest your money in another really successful company, Ford.
If you bought a house recently because houses are cheap in order to make a quick dollar in a couple years, you may make your quick dollar, but you’ll probably lose several thousand in the process. That means you won’t have that extra money so that you could invest in the booming company CROX.
My plan is to wait a few years to buy a house. I’m sure I can get one for a low price since the mortgage rates will be high, and I’m sure by then, there will be even more tax credits, government programs to help me get into a house for dirt cheap.
Disclaimer: If you happen to get rich as a result of my brilliant stock tips, it is your responsibility to share to profits with me. My investments in Washington Mutual, Sirius Radio, and Las Vegas Sands two years ago hasn’t panned out for me. You can’t go wrong because it can’t get any lower, right?
Next weeks blog: Abrupt bankruptcy?
So lets look first at the present situation. Low interest rates make refinancing more attractive for current homeowners looking to refinance. Ironically, that was one of the forces that pushed the needle into the housing bubble. First time homebuyers taking advantage of the $8,000 tax credit have until December to sign the papers saying they will take over an asset that will lose its value for a couple more years. Sounds like a great idea to me.
Sellers are not selling their houses for as much as they would like because they bought their houses 5 years ago thinking that they could double their equity three years later. These are probably the same people who invested their life’s savings into Bear Stearns stock. Sellers are happy about the attractive deals that are out there for homebuyers though because that means two more people are willing to at least drive by to see the exterior.
The future seems to look a lot more bleak for both of these groups.
With the lowest interest rates ever, and all the money that has been pumped into the system, rates will go up, a lot more than the average Joe is going to realize. Economists are thinking perhaps 7.5% to as much as 15% within the next year or two. This would be necessary in order to curb inflation. We do not want to become the next Zimbabwe. But with all the money that was pumped into the system, would 15% really be enough? But lets just say interest rates rose to 15%. Would you take out a loan to buy a house? I think I speak for most when I say I wouldn’t unless the sellers dropped their asking prices. So that is exactly what will happen.
Housing prices will drop so that buyers will drive by to see the fresh paint on the exterior. Sellers will lose a ton of money selling the house, and buyers are going to grab their ankles as they volunteer to pay high interest rates on their mortgages.
The positive side for sellers is that if they sell their houses soon, they could just invest their money in a really strong company, perhaps General Motors.
So what does this mean for homebuyers in the future? If you have the money to throw down on a house in a couple years when housing prices may hit bottom, it may not be a bad idea. If you don’t have enough money for a house, good luck. You could just invest your money in another really successful company, Ford.
If you bought a house recently because houses are cheap in order to make a quick dollar in a couple years, you may make your quick dollar, but you’ll probably lose several thousand in the process. That means you won’t have that extra money so that you could invest in the booming company CROX.
My plan is to wait a few years to buy a house. I’m sure I can get one for a low price since the mortgage rates will be high, and I’m sure by then, there will be even more tax credits, government programs to help me get into a house for dirt cheap.
Disclaimer: If you happen to get rich as a result of my brilliant stock tips, it is your responsibility to share to profits with me. My investments in Washington Mutual, Sirius Radio, and Las Vegas Sands two years ago hasn’t panned out for me. You can’t go wrong because it can’t get any lower, right?
Next weeks blog: Abrupt bankruptcy?
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