"Impoverished Professional" Not Alone
A little dust-up has been going on at the TimesOnline. Lets join the fun. "Rosie Millard, the self-confessed impoverished professional, hits back at her critics. 'All that remains now is for me to work like crazy and pay the money back. The debt, or much of it, is on an interest-free card. When I pay the monthly instalments, it is the capital I am reimbursing.'"
The lady has a wobbly plan, as she admits. "I could make everyone much happier by selling a house. I probably will; I put one on the market last summer precisely because I knew a lot of bills were suddenly going to arrive, but I didn’t sell it because the market was as flat as a millpond."
"'I quite like the theory of one friend who summed it up most succinctly. “Until you are 45, you spend more than you earn.'"
10 Comments:
Interesting article....though the UK economy is in some ways structurally different than ours, the mentality is quite similar. Bloated, upper middle-class debt she thinks will be offset by housing capital gains (even after record above-trend gains in the UK for the past several years and now a cooling market there) and rising incomes.
Little do these folks appreciate the tectonic shifts that are taking place in the global economy that will place extreme pressure on the rich middle-class salaries in developed countries.
Jeez -- ya know, because worrying about debt is so damn "Victorian" anyway. Actually, it's not. It's all puritan ethic, and the impetus behind the mindset that built the US.
I enjoyed the claim that "you are not really supposed to have any money until age 45 anyway" comment. I'm 30 and my wife and I have well over $300K liquid (not home equity!) in the bank. I rent and have zero current foward liabilities.
rentboy
great post. sounds like you will be one of the winners..Ben
What is so wrong about renting??? Why is "renting" a bad word all of a sudden? These people have no business buying one home let alone 3 or 4! I just don't understand how a person can justify accumulating loads of debt for what? A peice of the American (now World) Dream? It's a society fed manipulation of what's really going on. The Fed has us fooled into supporting a war and a trade gap by accumulating debt and they don't really care how it leaves the average person...broke. I couldn't believe the claim AG made about how it's "OK to have debt and use as much credit as you want" crap. If everyone is running, then that's the time to walk.
DrDubb,
I appreciate you posting more on the story, its a big help.
(Life envy may be replaced by a new fashion: bragging about how frugal we can be)
It could happen and would that be so bad? Thanks Dr.!
I like these articles. I wonder if Rosie has a glimmer of a point, though, about enjoying things when you're young. I don't agree with her about the credit card debt type stuff, but since this blog is about housing, it makes me think of the movie It's a Wonderful Life. The bit about an honest banker who loans money to people so they can live in nice homes earlier rather than later.
So far it's worked out pretty well for Americans, in some regards.
But now it's getting a bit pricey.
(I wonder if Rosie has a glimmer of a point, though, about enjoying things when you're young)
I completle understand you position, and agree with your optimism. But what I see coming out of the housing bubble is less affordability for younger folk.
Frugalists.
Yes. I've got friends and family who are obsessed with frugality. My sister, for example, must have a coupon for everything she buys or else berates herself mercilessly. I find that I don't have time to search through scraps of paper when I've got three little kids under 5 and a house to take care of.
But I do enjoy using them when I've got them and buying what I can on sale.
My husband and I are selling our expensive house and are going to enjoy breathing for a year or two with money in the bank. (for a change). Perhaps buying ourselves some new clothes and shoes. (within a budget that we actually have now that our house isn't taking up 70% of our income).
To me the ultimate sign of a bubble were the guys buying cars at the Barret Jackson auctions this winter.
People, mostly greying baby boomers were paying 100K$+ for 1960-70s muscle cars with 400HP V8 engines. These sales are bringing in 10s of millions of dollars.
I think there is also a bubble in muscle cars these days. Do you know how much fuel a 400 ci V8 would use ? What would you do with such a car other than drive it occassionally and otherwise look at it. I think people expect them to be an "investment" and appreciate over time.
After the housing bubble bursts, people aren't going to have money to buy a gas guzzler to look at.
(After the housing bubble bursts, people aren't going to have money to buy a gas guzzler to look at)
There are reports of collectables being in a bubble as well, which one would expect in a credit blow-off. Good point anon.
Ben
RentBoy- I would be interested to hear more about your thoughts on "the tectonic shifts that are taking place in the global economy".
Please tell me more!
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