What is the right amount of sympathy to give to people who are down and out because of this economy? Over the last several weeks, there have been numerous stories in the various outlets about people losing their job and now having to scrape by to make things work. Most of the stories go a little bit something like this.
John Doe used to live the good life. He used to make $150,000 a year selling mortgages to people. He would take trips to Hawaii every few months, bought a big house, drove a BMW, and never worried about what something cost or if he should be saving money. He was honest but he got caught up in corporate greed and was forced to make loans to people who could not afford it. When all of those loans dried up, so did his job. That was 8 months ago and he has not been able to find work since. His house is now in foreclosure and his wife has left him along with their 5 year old son.
How sorry should I feel for these people? The capitalist in me of course says I should not care at all. People should always be thinking about the future and be prudent with their money. In almost all cases, you could point to these people living extravagant lifestyles and not saving enough money for the eventual rainy day. A day which came sooner than they expected. Then again, it always does. I look at my own situation and I can only say to myself, “What are these people thinking.”. I too make a good salary. I have better reason to believe it will continue to go on than most others do since my success is not sudden and is not nearly as tied to a booming irrational sector like so many other people’s careers have been over the last few years. But I save, and I save like crazy. People who follow this blog know that I tightly control both my discretionary and my non-discretionary spending. In a worse case scenario, I could probably survive several years of unemployment. I would have to make sacrifices of course, but I do not believe I would experience quite the same life crisis these people have.
But of course there is the part of me that does not want to take the “I told you so” and “Holier than thou” attitude that so many others have. While I think many of these people caused many of their own issues, I do not wish to dance around and make light of their situation. These are of course real people with real suffering. They are not blameless in their plight but that also does not mean they are not worthy of a little sympathy. I emphasize “little” because some of these people just really do not seem to get it. My favorite (although I cannot seem to find the article now) was one man who was living large in the Los Angeles area on $70,000 a year. Seriously folks, that is not a lot of money. The article talked about how he spent all of his money on trips and a nice house, all of which is gone now. But if you think you have the right to live a lavish lifestyle when you only make $70,000 in Southern California, how is anyone supposed to feel bad about that?
Now imagine someone making $70k in New York City … that’s practically the poverty level over there.
Once I started making more per month than I could reasonably spend on “toys” (I’m a big computer geek), I had to learn finance stuff really fast. My savings account is now flourishing. Although I wish I had learned all that before I bought my @!#$%ing condo! I’d probably have $100,000 more in savings if I hadn’t done that.
I have a friend who hangs out in downtown Kirkland a lot, and is kind of a beligerent aspiring-alpha. He’s always talking about money and how he’s going to be retired when he’s 40, and how I should buy that BMW M5 (which would be $100k out the door). “You only live once!” Three years ago I would’ve said, “Yeah … soon! I will, just you watch!” but now I just shake my head and say “No. I already have a BMW!” I’m saving my money so that when I’m 40, I’ll be able to buy 10 of those
(which means I’ll buy … 1)
No one is above saving! Just because you hope something bad doesn’t happen doesn’t mean it won’t or can’t happen. I have NO sympathy for people like John Doe. There are lots of things my family and I want, but we cannot afford them. You know what we do? We let it go. We don’t max out our credit cards for anything short of a life-saving operation.
When I first read the stories, I feel bad… but when I think about all the bailout money the government has handed out thus far, I am not sure the government can rescue everyone. There’s just not enough money. The bleak truth is many people will have to start over.
Target is doing well.