Posted on 01/25/2009 3:52:00 AM PST by TigerLikesRooster
Deep in Debt, and Now Deep in Worry
By BEN STEIN
NOT long ago, a woman in California called me for advice. She is divorced, with two children, and has a series of interlocking financial problems.
She lives in a lovely home in a stylish inland enclave. It has an interest-only mortgage of about $2.2 million that requires a payment of $12,000 a month, very roughly. It was last appraised at $2.7 million, but who knows if it’s now worth anything remotely close to that price.
The woman, whom I’ve known since she was a teenager, has no job or other remunerative employment. She has a former husband, an entrepreneur whose business has suffered recently. He pays her $20,000 a month, of which roughly half is alimony and half child support. The alimony is scheduled to stop this summer.
She has a wealthy beau who pays her credit card bills and other incidentals, but she is thinking of telling him she is through with him. She has no savings and has refinanced her home repeatedly, always adding to indebtedness and then putting the money into a shop she owns that has never come close to earning a dime. Now she is up all night worrying about money. “Terrified,” as she put it. She wanted me to tell her what to do.
What could I say? I did the best I could, but I had to tell her that she was on very thin ice.
Ever since, I’ve been thinking of the troubles of this sweet woman, consumed with worry about money.
(Excerpt) Read more at nytimes.com ...
There’s always a honest living to be made in porn. Get busy, girl.
Why does Ben feel compelled to try to offer her advice? She obviously is a leech and as such should be ignored. The only thing she has to offer others is advice on how to take what isn't hers.
My advice to anyone who is having a tough time nowadays is for them to study the prior choices others have made that allows them to be free from worry in todays economy.
Sweet? I would call her **STUPID**!!!
She is reaping what she as sowed. ( And...I feel sorry for her kids who are likely very “messed up”.)
Um—the last 5 months have been hugely deflationary. Food is higher than a year ago but most other things are down. Housing prices are way down, clothing & electronics are way down, gas is the lowest it’s been in 5 years, commodity prices are down on average around 60%. Stocks are down 40+%, corp bonds are down, assets dropped $10 trillion in value. Car values are down. Almost everything is down.
The johns in this story are Ivy League graduates who have been running the financial institutions that got us into this mess. The distaff side is providing a cash service, which the Johns are paying for with cash ripped off from their depositors and investors and now the American public.
What about compared to a year ago? Of course they came down in the last five months.
Also, notice now they are adding fuel and energy into the CPI whereas before it was separate.
Electronics, clothing, housing, cars, gas, commodities are all down from a year ago. IT was NEVER seperate a year ago...the US measures 2 versions of inflation - Core (which excludes food & energy) and total (all). Feel free to go to bls.gov and do the research.
BTW, how did we only have 2 or 3 percent inflation when housing was going up ten to fifteen percent a year several years ago?
I don't buy electronics, housing and cars every day. Food I need for my family. That's way up over a year ago. Just look at chicken prices.
Honestly, anyone that looks at the CPI for an indication of whether we are in inflation or deflation lives in a fantasy world. Just like a politician.
They measure rents instead of owning (Clinton changed that IIRC). Food only makes up 10% of my budget, so even if it went up 10%, it would only be a 1% cost of living increase. Just because you don’t buy it every day doesn’t mean its not a valid measure. I got chicken breast for $2.77/lb this week and $2.99 the two weeks before. Last year it was $3.99-$4.99. What’s your point?
FYI--SS is going up over 5% this year despite the fact that we are likely to have massive deflation.
Are core and headline two words you keep missing?
If I bought my house 15 years ago with a fixed rate mortgage, why will a jump in housing raise my cost of living?
Let’s see, she took huge financial risks to live beyond her means. Depended on the belief of a never ending stream of money from x-husband and boyfriend, tries to run a store that never makes money, and has an interest only loan on a 2.7 million dollar house. Financial planning at its best.
Ben Stein's right on this - and this is a well thought out piece.
If I bought a tv, a car, a computer, etc. two years ago why would a drop in their cost affect my cost of living.
Thanks for proving my point. The "cost of living" has nothing to do with electronics, cars, tv's, etc.
Glad I could help.
Looks like she has options not fully 'excercised'.
Not so much! I still believe the numbers are manipulated and we are lied to about the "cost of living". Why should anything but consumables be included in there? Why aren't taxes included?
CPI is consumer price index. Do consumers buy housing?
Why aren't taxes included?
Fuel and property taxes are included.
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