So, my wife has started her new job and she will be working 5-10 hours a week. Truth be told, this will probably last until June when the weather gets nice and then she’ll start working again in October.

Well, after her first day on the job, she was feeling all empowered and made the statement “Now that am working, you can stay home with the kids.”

I said “OK, to bring home what I bring home you would need to work over 100 hours a week.” She quickly calculated in her head that would be about 20 hours a day. I said or 14 hours if you work 7 days a week.

She then said “Never mind, you can continue to work.” I just kind of laughed to myself.

So my dream of staying home with the kids and watching ESPN will drinking beer and eating chips is still but a dream.

Shifting gears, I have been watching Dave Ramsey’s TV show at night lately, mainly because nothing else in on and I like to see him slam some of the people that call him. My wife usually sits on the couch next to me reading a book or magazine.

Well last night, I was watching some coverage about a little tourney coming up.

My wife goes “No Dave Ramsey tonight?” I was really stunned. I didn’t even know she listened to the show never mind enjoyed it.

Especially since she was complaining the other about needing more clothes the other week. Now for some perspective. We have a closet that’s 9x10 filled with some of her clothes and all of mine. Yes I do have about 5 feet of one wall. And she has a closet in the guest bedroom (not walk in but still big) and she has the entire coat closet. I think she may have boxes of clothes in the attic or basement but I’m not sure.

Since, watching Dave Ramsey, she hasn’t asked for money for new clothes or in general money for anything discretionary. She also is asking more questions about the budget and participating in it.

In fact, I never bring my lunch to work and always buy lunch, she said Dave Ramsey wouldn’t approve. Probably not, probably not.

I so disgusted today with stories I see in the news about people not taking responsibility for their actions.

At lunch, I watched a video on CCN.com about a couple in Las Vegas that were foreclosed on and moved from a house with huge kitchen and granite countertops on a mobile home. The basic story is that the moved into a house for $276k. For the first couple of years, the house went up into the $420k or $450k range. Then wife lost her job, they took equity out, and the ARM re adjusted.

So who do they blame? The lender and everyone else but them. These evil lenders took advantage of them.

Are you kidding me? Do you actually think a bank makes money on a foreclosure? You think banks want to be in real estate?

Then I was hearing some advise on credit cards. Basically to not pay for 120 days and then you can settle with the credit cards for half. Is this sound advise? This is the way we want to bring up the next generation?

I’m sorry but that’s not how I roll. If I borrow money or use credit cards or have medical bills, I pay what I owe. If I did something stupid that costs money, I take responsibility and pay what I owe. I don’t try to screw someone out of something I owe.

You might be saying that you owe $90k in CC and only make $30k. I say pay it all off and don’t weasel out of the bill. You owe the amount, you signed a contract, now pay it off up. Sure it may take 10 years but “man up”.

Sorry about the rant but I am so pissed off about people not taking responsibility in this country.

Your word is the only thing you have in this life so man up and accept your fate.

There was an interesting article I came across that offered a different way to look at retirement planning.

The article discusses a years worked to years in retirement ratio. So, if I work from 25 – 65 and plan on living till 85, my ratio is 40:20 or 2:1. To live comfortably in retirement, I would have to save 15% a year. The article continues that a 15% savings rate over 40 years is extremely aggressive

I just thought it was an interesting and different view of retirement savings.

W:R RATIO AND REQUIRED SAVINGS RATE FOR RETIREMENT

Working Retirement W:R Required
Savings Rate (%)
40 20 2:1 14
43 17 2.5:1 11
45 15 3:1 9.5
48 12 4:1 7
50 10 5:1 6


Source: http://www.aei.org/publications/filter.all,pubID.24940/pub_detail.asp

Tax rebate checks will begin going out in May, Treasury Secretary Henry Paulson said after the House's passage of a Senate-approved $167 billion economic stimulus package Thursday.

Senate Majority Leader Harry Reid: "This legislation is not everything that I wanted. But I am very happy."

The House of Representatives voted 380-34 to send the measure to the president a few hours after Democratic and Republican senators reached accord and ended a dayslong stalemate over the legislation.

Earlier, two White House officials said President Bush would support the package. The bill will be delivered Friday to the White House, with Bush's signing likely sometime next week, Democratic aides said.

The package, which passed the Senate 81-16, will send rebate checks to 130 million Americans in amounts of $300 to $600 for people who have an income between $3,000 and $75,000, plus $300 per child. Couples earning up to $150,000 would get $1,200.

The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time.

"My team will be sitting down with the IRS tomorrow, and the IRS, right in the middle of tax filing season ... will be working to get checks out," said Paulson, who helped broker the deal.

Paulson said the process of sending the checks would be completed by the end of summer.

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The leadership of both parties hailed the efforts that moved the package through Congress.

"You don't see anybody up here gloating about being a winner," Senate Minority Leader Mitch McConnell, R-Kentucky, said after the House vote.

"There were no winners or losers in this except the American people, who saw us rise above any differences we might have had and work to agreement on what is the No. 1 issue, and that is our slowing economy."

House Minority Leader John Boehner, R-Ohio, said, "The House gave a little, the Senate gave a little. I think that's what the American people expect of us -- to find some way to come together and deal with the problems the American people are facing."

Senate Majority Leader Harry Reid, D-Nevada, called the approval an "example of how government is supposed to work." Reid said, "Legislation is the art of compromise, and that compromise comes very hard sometimes. It came very hard this time."

After the House passed a stimulus package last week, Senate Democrats made a number of changes that Republicans would not accept, saying that they were too big and loaded with special-interest provisions.

After Democrats were unable to break a Republican filibuster threat, the leadership headed back to the negotiating table, finally agreeing to leave rebate check amounts at the House level. (Senate Democrats had lowered them and raised the income caps.) The Senate measure also added checks to more than 20 million Social Security beneficiaries and 250,000 handicapped veterans and their widows who were left out of the original House bill.

The Democrats dropped demands for an extension of unemployment benefits, energy assistance for low-income households and tax breaks for energy providers.

"This legislation is not everything that I wanted," Reid said. "But I am very happy."

While the members of Congress and Paulson applauded the bill's quick passage, a survey found that about one in four Americans (26 percent) said they would spend their tax rebates.

Nearly half (46 percent) said they plan to use the rebate to pay off debt and a quarter (28 percent) would save the money, according to the International Council of Shopping Centers and UBS Securities, which jointly commissioned the study of 1,005 households between January 31 and Sunday.

"The money will go into the hands of lenders rather than retailers," said Mike Niemira, chief economist of the International Council of Shopping Centers.

The crushing weight of Americans' debt load was underscored Thursday when the Federal Reserve reported Americans owed a record $943.5 billion in credit card debt at the end of December.

Including loans other than mortgages and home equity lines of credit, Americans are shouldering a record $2.5 trillion in debt.

That amount increased during the month by a relatively modest 2.1 percent, an indication that Americans have been restraining their spending


source: http://www.cnn.com/2008/POLITICS/02/08/economic.stimulus/

Justthe shear amount of debt boggles my mind. $2.5 trillion in debt not including mortgages and home equity loan? Wow!!!

46% said they would use it to pay off debt. I wonder what the actually numbers will be. I say most of the 46% will spend atleast some of the money.

Yesterday, my wife decided to go grocery shopping, armed with a budget of $100. I gave her some coupons to use on stuff I know she buys. There is a ton of other stuff she buys that I don’t know about. Well, the coupons were $0.75 off of this $0.50 off of that.

She was talking about the gold old days when she didn’t have to use coupons. She also use to grocery shop everyday before we had a budget. It was like $40 at the grocery store and stop into CVS for another $30. Well, now we budget $100 per week for groceries and we eat out far less.

We used to eat every meal on the weekends out. We have changed that. I now spend $20 a week on pizza for Saturday night and we eat the leftovers for lunch on Sunday.

Well, when she said do you remember, I started remembering about double income and no kids. Living in a condo in Brookline (in 2004 it was $360k condo for 900 square feet). Eating at the Radius in Boston ($300 per meal, I recommend the chef tasting menu). And sleeping in late on the weekends.

Sorry about that tangent. Where was I? … Oh yes … grocery shopping.

My wife came back from the grocery store and showed me the receipt. She spent $77 this week for all our meals. She saved about $33 on coupons and sale items. She was talking about how she got a center cut roast for $10 that’s normally over $20. She was talking about how see saved on this and that.

Not all of the buys were great. She bought strawberries on the cheap and some of them were rotting.

I thought to myself, who is this woman and what did they do with my wife that left the house. And could I keep this one?

She must have had one of the light bulb moments in the store or the way back after seeing all her savings.

I was listening to Dave Ramsey the past few days.

The first caller I remember was a guy engaged. He had a 30k car and his wife to be had a 30k car. They were making 60k between them. The guy also just got out of bankruptcy. He also had a couch from Rent-A-Center.

I was thinking to myself “WOW, what the heck.” Could you imagine being the loan officer at the car dealership? “Let’s see. You make between 30k – 40k? And you just got out of bankruptcy? How about fully financing that purchase?”

So, who pays the price of this high risk loan? The dealership? The car company?

Neither, you and me take the risk on these people. See, Wall Street bundles up all these loans from GMAC, Nissan, BMW, credit cards, etc. and sells them to mutual funds (similar to mortgages). So the auto company sells their receivables to Wall Street then they offer securities based on these loans. These are called Asset Backed Securities.

Anything with a payment stream (auto loans, credit card payments, bank loans, boat loans, etc.) can be securitized.

No wonder store credit and loans are so easy to get. The stores don’t have to hold on to them sell the best ones to Wall Street and then the really bad ones to collection agencies. No need to wait for your money.

Where does this leave us as a society? The sad thing is that this isn’t a unique story.

An interesting article about the Smiths.

http://therebutforthegraceofgodblog.blogspot.com/2007/12/introducing-smiths.html

Please read.

I thought it was an interesting read this time of year, especially with the new year around the corner. I agree with the blog that we look at other people’s situations through our own glasses of experiences. Often times, those glasses are tainted with not enough information and “the way I do things is right”.

People have different priorities and experiences that drive to the outcome we all see as the end result. We are not privy to every conversation and decision a couple makes.

The Smiths on my street get a new car every 3-6 months. They just got a new Mercedes. Most people would ask why is this family getting a new car every 3-6 months and why high-end cars. I would never…. But the guy works at a car dealership and this is one of the perks.

So as 2007 draws to a close and 2008 is about to start, I am going to try to be less judgmental of people and refrain from gossip.

Let’s be honest, refraining from gossip is hard. For instance, Britt Spears is living paycheck to paycheck and makes over $700k a month. And Paris Hilton’s grandfather just announced that 97% of his net worth (estimated at $2.3 billion) will be going to his foundation and not his heirs. (He mentioned that part of the decision was based on Paris’ behavior.)

Hey, I said I would try … and it’s not 2008 yet.

Why am I the poorest one in the neighborhood? Why am I the only one struggling? These are questions I used to have.

I live in a new neighborhood where the houses are 2 – 5 years old. So everyone in the neighborhood is about the same age with 2 young kids. There are a couple of kids in the 6-12 range but most of the kids are less then 5 and most houses have 2 kids and of course 2 cars. Besides our occupation, we are probably the same statistically.

So why do I feel like the poor one in the neighborhood? I have a push mower; my neighbors have a lawn service or riding mower. I shovel the snow my hand, I don’t have a snow blower or someone snow plow my driveway. I don’t have a nanny or maid service like others in the neighborhood. My TV and stereo are from college (my wife is embarrassed by both).

Is everyone in the neighborhood that much more financially responsible then me? Am I not the norm; am I the statistical out layer? Or the black sheep of the neighborhood – GASP!

Everyone in the neighborhood has the nice granite in the kitchen; a lot of houses have finished basements. Not mine. When I was building the house, I was very careful on adding things that would go over budget. My philosophy, if it adds square feet it will cost less now. Kitchens and such become outdated no need for a 30-year loan for that.

Well, I kind of like looking at real estate. I even dream of flipping to being a landlord. I don’t have the money to embark on this (or knowledge). So, I’m kind of in the education phase. Well, looking at some websites I came across one my county has for public records on a property, so I put in my address to see what would come up.

It listed my mortgage, the price I paid for the house, and some liens that were discharged between the town and builder – all public records. Amazing what is out there… and for free…

Of course you know, I had to try other addresses around me. All but one had a higher mortgage than me (on ave 30% higher principal) and most also had second and one had a third mortgage.

What’s my point? From a distance, the grass always looks green. It only when you get up close and walk around that you see all the imperfections.

So this holiday season I’ll look at my Charlie Brown Christmas tree and the few gifts under it, and feel content. My fondest memories of Christmas don’t revolve around the gifts I got but the family together and enjoying each other.

So I’ll gleefully wish my rich neighbors health and happiness and “oh” and “ah” at their latest gadgets, but please don’t have pity on me I’m doing just fine.