Maybe 10 years ago it was the top 20%. Here's a table from the Congressional Budget Office (3 years old by the way, so it's gone up since then), stating clearly that the top 20% earn over $231,000 gross income. Middle income (which is not middle class by the way) starts at just under $60k. And in my opinion, anyone who has to pay a tax designed for the super-rich who IS NOT super rich is one-too-many.
The first part of this (does it make you happy) and the second (does what you do make other people unhappy) made me stop and think in a way that blogs don't usually. I've been living in extreme frugality with the little money I can get from odd jobs since I lost my job three months ago, and I thought I was doing great. This reminded me that just because I'm paying all my bills and contributing to savings, even without a job, if I'm not happy and my partner is not happy, I'm not doing great.
Thanks for the reminder to bring the balance back into my life.
The criminals banked on the fact that banks usually don't inspect the properties the loans are being taken out for. The banks are not in the real estate business, and in some cases the banks did get greedy. However, when you have bank/loan industry insiders in your ring, the bank is compromised from the inside. So yes, the lenders should have been much more vigilant and tightened their lending standards, but in some cases it is hard to prevent an extremely professional ring. Anyway, I hope all parties involved have learned their lessons.
Now that you mentioned it, it's funny how many habits came from my Mom. Not only do I use bar soap until it's a sliver, but I also stick all the slivers together to make a new bar of soap. I also don't throw out plastic bags from the supermarket because I can reuse those as garbage bags.
I keep any quarters that I get in a peanut butter jar. When the jar is full, I take it to the bank. That's about $100 worth of change. I also have a coin bank but I don't use it as much. It's an cute item that I found at a thrift store.
It is amazing what greed will drive people to do! This is a very informative article. The thought to construct such an elaborate scheme of fraud would never cross my mind. Where do these people come from and why don't they concentrate on applying their talents on accomplishing positive things? I guess that working for wealth takes too long in our get-rich-quick society.
The chickens have come home to roost. It was all a matter of time before this caught up with everyone. People are losing their homes, credit ruined and banks losing money going bankrupt. But I dont feel sorry for the banks. On some level they knew what was going on and padded themselves by investing in sub prime loans. I feel sorry for the people who didnt educate themselves and got fleeced in the process.
I've only just begun my journey into frugal living and I've been careful not to drive myself (or anyone else) "crazy". I've linked to this post from my latest blog entry.
If your household makes $75,000, you're in the top 20% of all households in the USA. How is that "just barely scraping middle class"? Likewise, I've seen projections of the AMT situation ten years hence, and even under the worst-case scenarios, something like 1/3 of households would be affected by it ten years from now. Is that too many? Maybe. Is that "almost everybody"? No.
Maybe it's screwy. Maybe it's broken. But let me tell you, I've been in both places, and I'd rather pay a few extra bucks in taxes because my household earns $100K than to get a few extra bucks back because my household makes less than $25K and qualifies for the earned income tax credit.
Eva, don't you love the piggy bank? I have one too - I painted him myself. I also have a weird llama bank my dad brought me back from Europe. It's very colorful and sort of frightening. I only put coins in the pig...but it makes every penny worth picking up.
The current sub-prime mess and all of the credit problems worldwide comes from fraud starting with the borrower all the way to the investment banks that created ABS and CDOs linked to these mortgages. In fact, it even goes slightly further to the investors who should have known better but continued to play the game thinking the problems would never surface so long and housing prices continued to rise.
Everyone knew that this was a house of cards and they just wanted to make a quick buck by playing their part in the whole affair.
To me, the sub-prime mess is much bigger and more criminal than the Enron fiasco; the problem being it is too disperse.
Hello Jessica what you have written has given me hope, but my situation is a little diffrent. My son after a heart attack has been unable to work or really have a life. We had Blueshield I believe and was in process of changing providers, just on this week laps he had a heart attack this took place aprox. six years ago. The bills have sky rocketed to 75 to 80,000 dollars. There is no way he will ever be able to pay this amount since he does not have the ability to work or rather has no income. He lives with me and helps me with my buisness through anything I can dream up but he is limited. But, to the point what can we do. I don't wish to overstep any line but can you help us please in any way?
I agree it's rather subjective. I spoke to my friends recently about this. And I've noticed that something I consider splurging is considered practical by others. Likewise, the other way around applies as well: what I consider as practical are considered as splurging by some....
so, the line's pretty hard to draw.
My conclusion is this: it's not what we spend on. it's the proportion of what we earn vs what we spend. Spending beyond your means is the killer.
If you're earning $200million a year, well, what's a 2mil necklace?
I wonder how big of an impact fraudulent loans have had on the current lending crisis. Does anyone have an estimate of the total amount of dollars that have gone to fraudulent loans over the last few years?
One way airlines are cutting costs due to high oil prices is cutting flights and charging more. Sadly, I think Jeff (#3 comment) is right, there will be fewer airline freebies in the near future. :(
Great post Phil. It's all about the balance! I like how you distilled it down to two easy questions we can ask ourselves to see if we're in balance or if we're drifting into the crazy zone.
One thing that keeps me on the sane side of frugality is regular scheduled giving to charitable organizations. Watching my contributions make a difference helps keep the true value of money in perspective.
When we have taken trips we try to book through Priceline or Hotwire and negotiate an affordable price on a 4 star hotel. By looking on places like Trip Advisor you can get an idea of how receptive certain hotels are to upgrading people who buy off of the discounter websites. Sometimes they abruptly refuse sometimes they are more than happy to give you a free upgrade. One guy was able to get the pool table suite at the Palmer House in Chicago off of an $89 Priceline room reservation. It was an off weekend and his son's birthday. Last summer we stayed at the Hyatt in Chicago. We got the room for around $100 a night. I wasn't much for haggling when we checked in to try to get a suite but I did ask for a higher floor so we had a view. The desk clerk didn't even blink, we got a room with a great view.
Jabulani Leffall here...............Were we thinking the same thing or did you take a big bite out of my apple? (Smile) RE: My Saturday Evening Post: Miser v. Stunna.
Whether it's the former or the latter, keep doing what you're doing. It's all good, I enjoyed your post and it kind of shows I'm on the right track and that I'm not alone in my thinking. Stinginess is often a worse pathology than frivilousness.
Good post, thanks to it I have decided that as a couple my wife and I need to "take more adventures" together.
You are so full of crap. Boardwalk and park place are distributed together. There are only 3 boardwalks and are not distributed by region.
Maybe 10 years ago it was the top 20%. Here's a table from the Congressional Budget Office (3 years old by the way, so it's gone up since then), stating clearly that the top 20% earn over $231,000 gross income. Middle income (which is not middle class by the way) starts at just under $60k. And in my opinion, anyone who has to pay a tax designed for the super-rich who IS NOT super rich is one-too-many.
Great post...
The first part of this (does it make you happy) and the second (does what you do make other people unhappy) made me stop and think in a way that blogs don't usually. I've been living in extreme frugality with the little money I can get from odd jobs since I lost my job three months ago, and I thought I was doing great. This reminded me that just because I'm paying all my bills and contributing to savings, even without a job, if I'm not happy and my partner is not happy, I'm not doing great.
Thanks for the reminder to bring the balance back into my life.
The criminals banked on the fact that banks usually don't inspect the properties the loans are being taken out for. The banks are not in the real estate business, and in some cases the banks did get greedy. However, when you have bank/loan industry insiders in your ring, the bank is compromised from the inside. So yes, the lenders should have been much more vigilant and tightened their lending standards, but in some cases it is hard to prevent an extremely professional ring. Anyway, I hope all parties involved have learned their lessons.
Now that you mentioned it, it's funny how many habits came from my Mom. Not only do I use bar soap until it's a sliver, but I also stick all the slivers together to make a new bar of soap. I also don't throw out plastic bags from the supermarket because I can reuse those as garbage bags.
I keep any quarters that I get in a peanut butter jar. When the jar is full, I take it to the bank. That's about $100 worth of change. I also have a coin bank but I don't use it as much. It's an cute item that I found at a thrift store.
a fortnight is two weeks. one chicken is not enough, i don't care how you stretch it. :)
It is amazing what greed will drive people to do! This is a very informative article. The thought to construct such an elaborate scheme of fraud would never cross my mind. Where do these people come from and why don't they concentrate on applying their talents on accomplishing positive things? I guess that working for wealth takes too long in our get-rich-quick society.
The chickens have come home to roost. It was all a matter of time before this caught up with everyone. People are losing their homes, credit ruined and banks losing money going bankrupt. But I dont feel sorry for the banks. On some level they knew what was going on and padded themselves by investing in sub prime loans. I feel sorry for the people who didnt educate themselves and got fleeced in the process.
I've only just begun my journey into frugal living and I've been careful not to drive myself (or anyone else) "crazy". I've linked to this post from my latest blog entry.
If your household makes $75,000, you're in the top 20% of all households in the USA. How is that "just barely scraping middle class"? Likewise, I've seen projections of the AMT situation ten years hence, and even under the worst-case scenarios, something like 1/3 of households would be affected by it ten years from now. Is that too many? Maybe. Is that "almost everybody"? No.
Maybe it's screwy. Maybe it's broken. But let me tell you, I've been in both places, and I'd rather pay a few extra bucks in taxes because my household earns $100K than to get a few extra bucks back because my household makes less than $25K and qualifies for the earned income tax credit.
Eva, don't you love the piggy bank? I have one too - I painted him myself. I also have a weird llama bank my dad brought me back from Europe. It's very colorful and sort of frightening. I only put coins in the pig...but it makes every penny worth picking up.
The current sub-prime mess and all of the credit problems worldwide comes from fraud starting with the borrower all the way to the investment banks that created ABS and CDOs linked to these mortgages. In fact, it even goes slightly further to the investors who should have known better but continued to play the game thinking the problems would never surface so long and housing prices continued to rise.
Everyone knew that this was a house of cards and they just wanted to make a quick buck by playing their part in the whole affair.
To me, the sub-prime mess is much bigger and more criminal than the Enron fiasco; the problem being it is too disperse.
Hello Jessica what you have written has given me hope, but my situation is a little diffrent. My son after a heart attack has been unable to work or really have a life. We had Blueshield I believe and was in process of changing providers, just on this week laps he had a heart attack this took place aprox. six years ago. The bills have sky rocketed to 75 to 80,000 dollars. There is no way he will ever be able to pay this amount since he does not have the ability to work or rather has no income. He lives with me and helps me with my buisness through anything I can dream up but he is limited. But, to the point what can we do. I don't wish to overstep any line but can you help us please in any way?
Thank-you Pilar de olave
I use all the three styles of saving at various times of my life. Once you start saving you will find more ways to save
I agree it's rather subjective. I spoke to my friends recently about this. And I've noticed that something I consider splurging is considered practical by others. Likewise, the other way around applies as well: what I consider as practical are considered as splurging by some....
so, the line's pretty hard to draw.
My conclusion is this: it's not what we spend on. it's the proportion of what we earn vs what we spend. Spending beyond your means is the killer.
If you're earning $200million a year, well, what's a 2mil necklace?
Thanks for the really interesting read!
I wonder how big of an impact fraudulent loans have had on the current lending crisis. Does anyone have an estimate of the total amount of dollars that have gone to fraudulent loans over the last few years?
Oh, and welcome aboard, Xin!
One way airlines are cutting costs due to high oil prices is cutting flights and charging more. Sadly, I think Jeff (#3 comment) is right, there will be fewer airline freebies in the near future. :(
Here's an article about the costs cutting from USA Today. http://www.usatoday.com/travel/flights/2007-11-22-jetfuel_N.htm
Great post Phil. It's all about the balance! I like how you distilled it down to two easy questions we can ask ourselves to see if we're in balance or if we're drifting into the crazy zone.
Thanks Jabulani! I'd had the pieces of this one kicking around for a while, then saw your post and was inspired.
One thing that keeps me on the sane side of frugality is regular scheduled giving to charitable organizations. Watching my contributions make a difference helps keep the true value of money in perspective.
When we have taken trips we try to book through Priceline or Hotwire and negotiate an affordable price on a 4 star hotel. By looking on places like Trip Advisor you can get an idea of how receptive certain hotels are to upgrading people who buy off of the discounter websites. Sometimes they abruptly refuse sometimes they are more than happy to give you a free upgrade. One guy was able to get the pool table suite at the Palmer House in Chicago off of an $89 Priceline room reservation. It was an off weekend and his son's birthday. Last summer we stayed at the Hyatt in Chicago. We got the room for around $100 a night. I wasn't much for haggling when we checked in to try to get a suite but I did ask for a higher floor so we had a view. The desk clerk didn't even blink, we got a room with a great view.
Jabulani Leffall here...............Were we thinking the same thing or did you take a big bite out of my apple? (Smile) RE: My Saturday Evening Post: Miser v. Stunna.
Whether it's the former or the latter, keep doing what you're doing. It's all good, I enjoyed your post and it kind of shows I'm on the right track and that I'm not alone in my thinking. Stinginess is often a worse pathology than frivilousness.
Jabulani Leffall
Monetary Gadfly, Common Currency
00000 Broke Blvd. Kitchenette #68 & 1/2
Lowcash, CA 90000-0000
Thank you Philip, for a good subject and some very wise advice. I would agree that the key, is flexibility.