01.13.2007 - Weekend Open Thread
This is your open thread for the weekend of January 13-14, 2007. Please post random links and off-topic discussions here.
Update: I'll be attempting to update the layout to a spiffy new Blogger template. During the update process the content on the sidebar may change and the font sizes may dance around a bit. Hopefully it will only be momentary.
Update 2: I have successfully updated the layout. Things should be mostly back to normal now. I'm still dealing with an issue of too much empty space in the sidebar (in IE), but other than that I think it's good. Let me know if you have any troubles with the new layout.
8 comments:
Interesting article at msn money...
The headline starts with how a couple are living paycheck to paycheck on 150K a year...
buried in the middle of the article is the real reason why...
"A closer look at the Schuetts' finances reveals, for example, that a big chunk of their income is eaten up by two rental properties. Brian purchased them thinking they'd generate extra income, but he has yet to find tenants. Even when the properties are finally occupied, the area's softening rental market probably won't allow them to make enough to cover carrying costs."
One reason I abandoned reading mainstream personal finance or women's magazines is because they assumed the average American household makes upwards of $175,000, with several engineering or medical degrees and a mansion in Palo Alto. Such a challenge to help them with their budget.
I eventually realized that to profile a family with three children, bringing home $65,000, who had a positive cashflow and a net worth five times that was to promote habits that were injurious to the profits of the magazine's advertisers.
This is on CNN Money, but I think it's the article SLTO was referring to: Scraping by on $150,000 a year
The writer makes the family making $150K per year look like they are struggling...yet sounds more like a temp situation. Once the husband gets a part time job (another $1,000+ per month), then renting out the two rental properties should bring in several thousand more a month ($1500 to $3000 or something like this).
Once their investments and part-time job are included for future months they will be able to save and have a little more breathing room. Did they strech too far? YES!
>I eventually realized that to profile a family with three children, bringing home $65,000, who had a positive cashflow and a net worth five times that was to promote habits that were injurious to the profits of the magazine's advertisers.
Absolutely brilliant. Got any ideas how I can get my wife to stop reading womens magazines? (Jane, Shopping, Glamour, Lucky, etc) To be fair, she also reads Giant Robot, Juxtapoz and The Economist. I'd say we probably have 20+ subscriptions here. The Economist is mine - but she actually reads it more than I do!
Maybe they'll do an article about why spending money on stuff you don't need doesn't fill the void.
If i buy a home today for 600K$, and put a down payment of 25%, and finance the rest...Can you folks explain to me what happens in case there is a real estate crash down turn and the property is now worth only 475K$? I still have 450K$ under loan today. Does this mean my down payment goes down the toilet? Or is it wiser to put a larger % down?
sash,
it would be wiser not to buy... yes your downpayment would be gone if you had to sell...
if you can afford to close your eyes and stay for 15 years, you'll be fine...
Stop/Delete me if you've read this one before:
Christian Weller published a housing boom report "End of the Boom" at the Center for American Progress December 8, 2006.
Close to half of all homeowners already exhibit some signs of financial vulnerability. Just under 50 percent of all homeowners in 2004 met at least one of four possible vulnerability measures--mortgage payments of at least one-third of income, variable interest rate debt of at least 50 percent of income, home equity below 25 percent of their home's value, and homes accounting for at least 90 percent of families' total assets. This was up from 39 percent in 2001, and is likely higher than 50 percent today amid rising interest rates.
Even a leveling of home prices as serious consequences. As home prices slip or remain stagnant, domestic consumption will slow. This recent engine of economic growth is now faltering. In the third quqarter of 2006, a sharp decline in families' spending on their homes meant a drag of 1.2 percentage points on economic growth.
Families cash out less equity, leaving even fewer resources for consumption growth.
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