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I bought a house for $95,000, about half the loan I could have gotten. It was a fixer and did need about $30,000 worth of work which included tricking out the kitchen with new cabinets, counter tops and an island, and buying cool A/V equipment for the living room. At $125,000 total, still much cheaper than the median home value in my county of $274,000. Actually it still needs a bathroom remodel, landscaping & maybe a deck so I'm probably looking at $15K more over the next few years. Even $140,000 is still a bargain.
I don't plan on selling it even if I move out because the rental vacancy in my county is around 1%, so the rental rate I could get with my improvements is a good 70-80% more than the mortgage.
People thought I was crazy buying it, wondering why I didn't shop banks more, not for interest rates, but for the purpose of getting a bigger loan so I could buy into a more trendy area with a bigger house. Mostly what people thought was that I was insane not to get the most house I could afford.
What people expect has changed. My house was built in 1950. The single biggest difference between older and newer houses is storage space - people want a lot more room for their ton of crap these days.
Last edited by redguard57; 02-24-2015 at 12:20 AM..
You didn't get the crux of my argument. I was looking at the budgets for the entire system. Say you have an operating budget for employees for your chain at 50 million and you have a CEO opening. I am offered the job and asked to take it for 7 million. If I accept, that means we have 47 million to spread around store managers, section leaders, their assistants, leads, and the lowest employees as well as office staff, etc. If I ask for more to be more in line with the Walmarts, Home Depots, etc. that takes more away from the workers.
I wasn't saying that in a "typical liberal 'who don't understand business' way," I was answering in a line item way that someone who at least went through business school can explain (as I did above.) As it stands right now with the $10 an hour wage in 2016, Walmart will pay those 500K employees half of their CEO pay if they make just $10 an hour and not more.
As for if I disagree with it, there aren't many other options. Target has a poor selection and is rarely better priced. As I've mentioned in other posts, my nearest Costco is nowhere as close as the nearest Sam's Club. The supermarkets depending on sales are better. Electronics are dirt cheep in Walmart as well as the convenience. I don't hate Walmart like you implied based on my post, I just don't think they are the greatest thing to sliced bread and maybe should have offered higher wages to attract better employees than they have now.
"Live within your means" is aimed at the middle class, not the poor. The poor have no means to live within.
The American poor live better than most people in the world and better than the middle-class did in the 1950's. Poverty of the type where people went to bed hungry, couldn't buy new clothes, have a roof over their heads has been eliminated.
They could do with some lessons about frugality. As Calvin Coolidge said, "Industry, thrift and self-control are not sought because they create wealth, but because they create character."
Attitudes like the OP's are why this country is in so much trouble.
By all means, please elaborate as to why you feel this is the case?
Personally, I believe that basic income inequality and the drastic reduction in the inflation-adjusted value of the U.S. dollar are much bigger and more problematic structural issues than merely advocating that the poor and the middle class get more of their fair share of the economic pie.
The American poor live better than most people in the world and better than the middle-class did in the 1950's. Poverty of the type where people went to bed hungry, couldn't buy new clothes, have a roof over their heads has been eliminated.
They could do with some lessons about frugality. As Calvin Coolidge said, "Industry, thrift and self-control are not sought because they create wealth, but because they create character."
The American poor live better than most people in the world and better than the middle-class did in the 1950's. Poverty of the type where people went to bed hungry, couldn't buy new clothes, have a roof over their heads has been eliminated.
They could do with some lessons about frugality. As Calvin Coolidge said, "Industry, thrift and self-control are not sought because they create wealth, but because they create character."
And that's what the poor need most: character.
(Referring to bolded portion above.) That's one possible way to look at it. Another way to look at it is that the poor and even the middle class to a certain extent have become so economically-impoverished over the past several decades -- with the drastic reduction in the real value of the dollar -- that their economic situation is almost akin to financial indentured servitude, or a re-establishing of sorts of feudal society where the wealthy owned everything and the average person had no real net worth to speak of.
Last edited by Phoenix2017; 02-24-2015 at 08:02 AM..
Reason: Edits / Corrected typo
You are cherry picking the few things known to increase faster than inflation while leaving out the things that have been rising more slowly than the CPI or have been steady following along.
Actually it's the government that is cherry picking. Just because we've seen deflation in electronics, clothing, and a few other things doesn't change my point in the slightest.
Why? Because the expenses that have inflated as I described are those that need to get paid first.
So we have a situation where the well to do 'feels' the CPI as the government reports, because their income exceeds those necessary expenses. However, a greater and greater percentage of the population doesn't feel it at all, as all of their income is being consumed by those necessary expenses that have skyrocketed exponentially beyond what the government reported CPI is. Think rent, food, college, healthcare, insurance, taxes, etc.....
From a practical standpoint, the CPI is hogwash for most people.
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