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Title: Young Couple With $783K In Debt Shows What's Wrong With America
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Published: Aug 29, 2011
Author: http://www.businessinsider.com/this-youn
Post Date: 2011-08-29 18:53:15 by tom007
Keywords: None
Views: 347
Comments: 12
Young Couple With $783K In Debt Shows What's Wrong With America Patrick.net | Aug. 29, 2011, 2:53 PM | 11,390 | 72 A A A inShare16 happyhomeowners__tbi.jpg Money Magazine didn't tell us who the young couple actually are, so we can't show you a picture of them. But here's another young couple! Patrick.net URL Patrick.net is a real estate blog and open forum. Recent Posts RSS Feed Patrick.net Articles like the one I'm referencing below demonstrate why there are still bubble home prices in certain areas. This particular article also shows how poorly people manage their own finances, and does a good job showing how much the country's people are still relying on inexpensive and easy to obtain debt. The article is called "The Financial Fix" (that ought to be in quotes, btw, because it is anything but a "fix" that this advisor gives them) that appears in Money Magazine, September 2011 issue, Page 42. Where do I start?? This 31- and 32-year-old couple are $783,000 in debt! The debt is made up of a mortgage on a townhouse, a mortgage on a condo, plus car and student loans. First off, that is a terrible position to be in. They are in way, way over their heads. But it gets worse. The wife is expecting their first child so they only have the husband's $93,000 / year income. They say they are "barely breaking even on [his] salary"...uhm, no, you are not breaking even at all. You are losing ground (to debt and financial slavery), and fast. If they could apply all $93k of his income toward all their debt, it would still take them 8.41 years to pay it all off! OMG. That's atrocious. "They decided to keep their old condo as an investment, but so far it's been a cash drain." Silly people, you ought to stick to consulting or whatever it is that you do. "Real estate" as an investment is often highly overrated, as the returns on residential real estate have, on average over long periods of time, only barely beaten inflation. What are you doing buying a $410,000 townhouse in Leesburg, Virginia? Anywhere in Virginia, for that matter? That's bubble pricing if I've ever heard it. Making matters worse is that they still own a mortgage on a condo. Why does a young, white collar dual income (previously) no kids couple have to buy a townhouse or condo in Virginia? Because we are still in a significant housing bubble in multiple areas of the country...and Leesburg, Virginia is definitely one of them. These articles never fail to count "home equity" under the "Assets" section of peoples' financial situation. It says this couple has $66,000 in home equity. Bwah, ha, ha. Sure, right. Did you get those figures from Zillow? Or better yet a local realtor? Are you factoring in selling costs to liquidate all of that "equity"? Of course not. A quick off-the-cuff guess is that they are sitting on about half that much "equity." If the tenant skips out on paying them rent, the article tells how the young, naive couple will be on the hook for mortgage payments totaling 42% of their income (!!!), not factoring in maintenance and repairs. Gulp!! Gasp. That's a mighty scary position you are putting your family in, sonny. And btw, I'd definitely factor in maintenance and repairs. These young kids are financially screwed because they are trying to live "the American Dream" that someone else told them they should. Why do you have to have a kid if you cannot afford it? Parenting magazine just quoted a new study saying that the typical cost to raise a child to age 18 is approximately $190,000. This couple is already in a financial hurt locker, and now they are adding a newborn child to the picture. Wanna bet that they'll "have to" have a second child? I've seen it too often. And why did they have to buy a house? (a condo) And then another house? (a townhouse) This is a great example of the real estate pathology that many people still have today. Since the "financial advisor" gave them terrible advice (let me guess, the financial advisor also thinks real estate is a good investment? And has hundreds of thousands of dollars of debt to her name, too? That would explain the horrendous advice to this young couple), allow me to intervene further by offering some sound financial advice for them: 1. Sell your new townhouse immediately 2. Sell your condo concurrently 3. Sell your car / cars and pay off the loans immediately 4. Use any remaining "equity" funds from above sales to pay off any and all debt 5. Rent a nice apartment or home for a couple of years 6. Buy a conservative used car with cash That's really only a beginning but still much better than the article offered for them. This post by Quant HF Mgr originally appeared at Patrick.net. Please follow Business Insider on Twitter and Facebook. Read more: http://patrick.net/forum/?p=993679#ixzz1WSdGNQzE
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#1. To: tom007 (#0)
deleted
The relationship between morality and liberty is a directly proportional one. "Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." ~ Ben Franklin "For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth, to know the worst, and to provide for it.” ~ Patrick Henry
You are probably right. I imagine in that area that many are working for the government either directly or indirectly through contractors. Whenever I get a notice from a recruiter about a job from a defense contractor I don't give it the time of day. There is no amount of money that would make me feel OK about working for them.
God is always good!
deleted
The relationship between morality and liberty is a directly proportional one. "Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." ~ Ben Franklin "For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth, to know the worst, and to provide for it.” ~ Patrick Henry
It's a lot like living in some kind of fantasy nightmare here in a way. The number of clueless (or deliberately head in the sand) people here is high. When did you first suspect I was mossad?
"I am not one of those weak-spirited, sappy Americans who want to be liked by all the people around them. I don’t care if people hate my guts; I assume most of them do. The important question is whether they are in a position to do anything about it." - William S Burroughs
No offence ol' buddy, but that joo bloo star of david tattoo'd on your forehead is a dead giveaway.
Yeah, I should never have hired a blind polydactyl tattoo artist.
"I am not one of those weak-spirited, sappy Americans who want to be liked by all the people around them. I don’t care if people hate my guts; I assume most of them do. The important question is whether they are in a position to do anything about it." - William S Burroughs
The young couple in question should move to Somalia and beg the U.N. for internationally-funded help.
They should have five or six. Doesn't matter how much debt they have.
Anti-racist Libertarians are just Marxists who don't want to wait for the state to wither away.
Tom - please put the URL in the URL box instead of the author space. Thanks.
Break the Conventions - Keep the Commandments - G.K.Chesterson Six digit hand, cool. Hey, is it normal for one of your testicles The OneDollarDVDProject needs patriot activists I told an old girlfriend that while no man would sleep with her for a million dollars, there was always 50,000 times multiplied by $20. She beat me up.
"Terrorism is when the innocent are murdered due to the evil actions of the guilty." -- Turtle
#2. To: Eric Stratton (#1)
Let me guess, he works for the Tyranny, maybe a defense contractor that's working on gadgetry to help that same Tyranny separate people from the rest of their liberty and then ultimately the rest of their money.
#3. To: RickyJ (#2)
#4. To: Eric Stratton (#3)
The odds are at least 50/50 that someone around here works for the Tyranny either directly or indirectly.
#5. To: Dakmar (#4)
Mike Flaherty: Yeah, it's been there a long time. I wish I knew which corner.
My Man Godfrey (1936 2011)
#6. To: Esso (#5)
#7. To: tom007 (#0)
Parenting magazine just quoted a new study saying that the typical cost to raise a child to age 18 is approximately $190,000.
-Schweizerische Schuetzenzeitung (Swiss Shooting Federation) April, 1941
#8. To: Dakmar (#6)
Mike Flaherty: Yeah, it's been there a long time. I wish I knew which corner.
My Man Godfrey (1936 2011)
#9. To: tom007 (#0)
Why do you have to have a kid if you cannot afford it? Parenting magazine just quoted a new study saying that the typical cost to raise a child to age 18 is approximately $190,000. This couple is already in a financial hurt locker, and now they are adding a newborn child to the picture. Wanna bet that they'll "have to" have a second child?
#10. To: tom007 (#0)
#11. To: Esso (#8)
to be larger than the other two?
to help wake the town and tell the people. Do your
friends and family know what you know?
#12. To: tom007 (#0)
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