Tuesday, September 9, 2008

cheap ass minirant

I started this once and scrapped it. But there is some fundamental concept here I would like to point out, so I am going to try again...

I met someone who by all measure of the word would be considered "rich" -- lots of high dollar property, lots of collectible cars, owns his own successful business, etc. And he was shocked -- SHOCKED -- that I was living relatively comfortably without having a job for the past 2 years. I get this reaction a whole lot.

And what this implies to me is that, by my definition, this guy isn't rich. Yes, he pays more in property taxes than my investments earn. (Okay maybe I exaggerate, but not by much.) But I would guess he is mostly at a break even. I would bet by his reaction that he spends just about as much as he earns. And if he were to lose his income, his entire life would fall apart in a matter of months.

Mind you, this is all pure conjecture on my part. But my point here is that we tend to have ideas of what is rich and poor based on a person's lifestyle. And while there are super rich that could maintain a Robin Leach lifestyle forever, they are few and far between. Many (if not most) of those you see living that lifestyle are net-zero. Move down a step to upper middle class and you have the same syndrome: living above or just at one's means.

And any of these people could be rich (by my definition). They could live comfortably for a long long time with little or no earned income if they made just a little effort -- or be seriously wealthy with their existing earned income.

And it will be these same people that clamor for government to save us from the housing crisis (seriously poor people are most likely renting or are already living in government housing). Or provide them with universal health care (seriously poor people already have free health care.) The Really Bad Thing™ thing here is that, while morally reprehensible, you can use the middle and upper class as a tax base to force them to provide safety net services for the low end. But you cannot do that to provide safety net services for the middle and upper class if they are already at break even. (They wouldn't need the services if they weren't). Adding these services means adding taxes. Which means they will need more services.


Og Make Blog said...

Nothing torques me more than hearing the unwashed complain about the fuel prices cramping their lives or putting them over the edge... if you are that close to the edge, shame on you.

However, realize that this fellow has all his toys and might be having more fun than you. If you end up bailing him out, he is happier than ever!

Oh, Leach was a leach... he didn't live the lifestyle... just a hired gun for the network.

Anyhoo.... Ospraie ($4 b hedge fund heavy into energy) is liquidating and closing shop after bad calls, causing the retreat in oil and gas prices (this is the real reason, folks.) Just after the Fannie and Freddie bailout, WAMU shows up on the radar Monday morning (Sunday, actually, but the events took place Monday.) CEO is gone, but was supposed to have been bought out at 1800 CDT Monday..... don't know if it went that far.

The Fed is meeting Thursday morning (don't ask me how I know.) Watch the events unfold.

Spork In the Eye said...

I actually wrote a long ass rant on the whole housing bailout and haven't blessed the world with it.

I never really intended this to be a big rant hole... more just a way to keep in touch with people. Though, anyone that knows me knows I am a big rant hole, so maybe it is serving its purpose.

You'd be surprised how many rants I just swallow. But the whole "housing situation" does leave me with an acrid awful taste in my mouth -- brought on by both people over leveraging themselves and government stupidity. (When you make laws to force institutions to lend to people that don't qualify, be prepared for some defaults.)

Enos Straitt said...

I fall into the category of someone who lives at his means. I won't hide it. I was not smart enough to invest when I was younger and I was foolish enough to think I had to have the house (small as it is) in the 'burbs.

We have, however, cut way back and still manage to survive on my meager salary (wifey only works 8 hours a week and just started back to work a couple of weeks ago) despite the fact we still live in the 'burbs. Hey we are almost debt free. All we owe on is our house and a small loan we took out to keep the dog mobile. No cars, no massive CC debt.

We could do better but we could be a lot worse.

Spork In the Eye said...

For what it's worth, I started from 0 about 10 years before I chucked it all. While it is easy if you invest wisely at 18, it isn't imperative.

I'm not saying I'll never work again... But (barring totally unforeseen circumstances) I do not expect to have debt ever again.

Kari said...

"You'd be surprised how many rants I just swallow."

If only I could roll my eyes... ;-)

Spork In the Eye said...

maybe a sharp stick in the eye (or a spork) would help you with that problem

Og Make Blog said...

I, for one, enjoy your rants. Also, it saves me the trouble of having to rant so much myself.

Spork In the Eye said...

You do not rant so much as harumph. It is a minor difference, but I do think it should be noted.

Anonymous said...

I don't even know how I found your journal but I started out fifteen minutes ago on "the pioneerwoman cooks" and here I am.

I saw a snip that said "haven't worked in two years" (your rant) and thought, "now I need to read this blog."

Your wife sounds very cool and you do too. My husband is dreamy and we both weathered an adverse year in a comfortable fashion because we aren't nitwits.

Once his job ended and the new baby was good to go, we sadddled up and moved out west because it was time for a change. Our house sits on the market and we are sitting pretty elsewhere.

We are both happy that even though we had a challenging year we were still in charge of all our decisions.

Not sure why you need to know this, but I like how you are living your life (from my cursory read) and I love your FAQ! Funny!
Good luck!

Spork In the Eye said...

We are both happy that even though we had a challenging year we were still in charge of all our decisions.
...and that about sums it up. There is no power greater than owing nothing. A paid off house (even if it is a metal shed in the woods) is the most powerful tool in the world. One would be amazed at how far a dollar will go when the only one you are paying is yourself.

Spork In the Eye said...

...oh and I should have said, but didnt: pioneer woman rocks! Its food porn.