Friday, July 07, 2006

To Hell With The Joneses

From Yahoo Finance:

Keeping Up with the Joneses Can Put You Behind
by Laura Rowley

You're watering your lawn in your worn-out shorts and flip-flops on a warm summer weekend when you notice your Armani-clad neighbors opening the door for their caterers.

They've ordered trays of gourmet food, bottles of top-shelf alcohol, and a huge tent for what will clearly be a midsummer night's dream party in their manicured backyard. Eyeing their shiny, silver BMW convertible in the driveway and their new family room addition, you think, "How can they afford that? What am I doing wrong?"
...
Boss' personal journey into covetousness started with her next-door neighbors, John and Tina, in her New York City co-op. They seemed to enjoy an easy, charmed life. Rumor had it that they paid cash for their apartment. They spent weekends antiquing upstate, jetted off to Paris for vacations, and ordered a steady stream of luxury goods that piled up at their door.

Meanwhile, Boss and her husband had relocated back to the U.S. from the Middle East just as a recession set in, and he couldn't find work. He eventually returned to business school and they relied on her freelance writing income, all the while hiding their financial stress from family and friends.

From these experiences, Boss decided to write a book focusing on the social psychology of money -- the relationship between the household and the outside world -- and asked her neighbors if they would agree to an interview.

As it turned out, the grass was not greener on the other side: Tina, unhappy in her career, had turned to retail therapy and racked up $21,000 in credit card debt without telling John. She and her husband had both been given money by their families (something they felt they had to hide from friends), and they actually did have a mortgage.
...
Boss says we naturally compare ourselves to peers who are doing better, but rarely look at a homeless person on the street and thank our good fortune. That tendency has been confirmed by numerous studies. For instance, Andrew Oswald of England's Warwick University and David Blanchflower of Dartmouth College found that even if our incomes are rising, we tend to become less happy if the incomes of others are increasing more.
...
But more and more people on our radar screen are living the good life -- at least in a material sense -- thanks to the democratization of credit and unprecedented levels of consumer debt. This prompts increasing speculation about how they can afford it. The reality is simple: Some of them can't, at least not without going into debt. But money is the last taboo, and few people speak about it honestly.

51 Comments:

Blogger RichInNorthNJ said...

I'm gonna go out on a limb and bet this is going to have at least 100 comments.

And the majority of the comments will have these {{ }}, the mention of expensive clothing and the need for salaries over $200k.

But hopefully, I’ll be wrong.

Rich

7/07/2006 07:51:00 AM  
Blogger patient homebuyer said...

thank god i do not envy what others are doing. i always explain to my wife what looks so wonderful on the outside may not be great on the inside.

7/07/2006 08:10:00 AM  
Anonymous Anonymous said...

Amazing that people have to have to turn to newspaper articles to figure out the perils of reclkess consumerism. (rolls eyes)

Don't spend all you got. And for heaven's sake, don't spend what you haven't got!

-Jamey

7/07/2006 08:15:00 AM  
Anonymous Anonymous said...

Doesn't matter what you make because of this intense need to keep up.

I know many people with $200,000 year salaries, $50,000 in credit card debt, and $3,500 monthly rent tabs for a small one bedroom in a 'trendy neighborhood'.

The mentality is that people think of themselves in terms of how many possessions they have and what they are wearing.

7/07/2006 08:18:00 AM  
Blogger patient homebuyer said...

it is a sad situation
200k a year and nothing to show except some fancy gadgets and big bar bills.

saw this on msn this morning maybe the media will admit there is a problem with the market

What to Do If Your Home Isn't Selling
Ten Tips
Whether you're in a bone-dry market or a sizzling selling season, if you haven't received any offers on your home you're probably facing the question of whether to take it off the market. A house that goes too long without selling begins to appear "stale" and can actually damage your future chances of a sale.

How long is too long? It's not an exact science, but there are some helpful indicators. In a dry market, a sales period of six months to one year isn't unusual. Look at recent sales reports of similar homes nearby to determine a reasonable selling interval. In a hot seller's market, a house that hasn't sold within one month indicates a problem. In either case, there are several steps you can take before putting up the white flag.

Ten tips to improve your selling karma

Videotape your house, inside and out, and watch the tape as if you were a prospective buyer. Is the lawn weedy or the garden bare? Is your home uncluttered and spotlessly scrubbed? Sparkling-clean houses sell faster than those that look too lived-in or show an abundance of the owner's personality.
Take a second look at your listing price. Visit open houses in your neighborhood. Are similar homes priced lower? Selling prices may have dropped since your first comparative market analysis. In a hot market, if you haven't sold your home within one month, chances are good that you've overpriced it. If you do lower your asking price, consider a figure slightly below those of other comparable homes if you are interested in a speedy sale.
Do whatever it takes to be away from your home during showings and open houses. The presence of sellers makes it difficult for prospective buyers to take their time or talk openly with their partner and agent. Leave some treats out to make potential buyers more comfortable: beverages, nuts, cookies—anything that won't lose freshness or be too messy.
Ask your listing agent to talk to buyer agents in his or her firm who have shown your home. The feedback from their clients can guide you in making home repairs, toning down your décor, making landscaping improvements, and the like.
Hold an open house on a weeknight. Competition is lower, and you'll attract the interest of buyers who can't make weekend appointments because of other commitments.
Take out some extra newspaper ads or print up flyers, even if your agent is doing a good job with promotions. Look for out-of-the-ordinary places to advertise, such as trade magazines, company newsletters and other alternative resources. You can even offer perks to buyers, such as a cash bonus or a season ski pass.
Neutralize your color scheme. Most buyers prefer pale, neutral colors that make it easier to imagine a new home as their own. Houses with white exteriors are the highest sellers; for interiors, try whites, off-whites or pale grays.
If you've had offers but you considered them too "lowball," try readjusting your sights. Determine the lowest price you find acceptable, and consider anything more as icing on the cake. In a longstanding dry market you may even have to sell at a loss, so it's important to take every offer seriously. You don't want to alienate a potential buyer who has solid financing because you've set your sights unrealistically high.
Is your listing agent giving your house adequate attention? If not, start by having a candid talk. If there's no change, discuss the problem with the firm's broker. As a last resort, wait until your listing agreement expires and find an agent with a proven track record in your area. On the other hand, if you have a fabulous agent but the market is underwater, consider offering an increased commission or a bonus for your listing agent as extra incentive. If you do sweeten the pot for your agent, amend your listing contract to reflect the change, and be sure it's added to the Multiple Listing Service (MLS) book—buyer agents will also be inspired to give your house extra attention.
Relist your house to give it a kick-start. When it was listed on the MLS, it was assigned a number reflecting the date and year of the listing. By now it may appear outdated to buyer agents; relisting will provide you with a new number. Check into the policies of your local MLS: You may need to make a change to qualify for relisting, such as temporarily taking your home off the market, adjusting its price, or changing listing agents or firms.
Taking Your House Off the Market
If you've tried the tips on the previous page, you're confident that your asking price is competitive, you have an ace agent, and you're still not getting any action, it's probably time to take your house off the market. Here are some ways to make the most of it:

Choose your selling season. If you can afford to do so, relist during a more dependable selling season. After warming up in late winter, the market typically starts to peak from the ides of April (yep, tax season makes a difference) until June, when longer days and splashes of garden color make homes look their best. In summer, the market slows to a crawl, followed by a second peak from September to Thanksgiving. From then until January, the market tends to be as cold as a Midwestern winter, but it can also be advantageous to list while the competition is sleeping. Research the trends in your area: If you live near a winter resort, for example, winter may be the savviest time to sell.

If you're a senior, consider a reverse mortgage. Designed to help seniors who have more home equity than they do cash, a reverse mortgage is a loan against your home. The money is disbursed as either a single payment or a monthly sum, and the loan comes due (with interest, of course) only when the house is sold or upon the death of the owner.

Rent until the market bounces back. If you must leave your home because of a job transfer or other extenuating circumstance, renting is an excellent option as you wait for the market to regain some heat. If you don't have the time or the talent it takes to be a good landlord, contact a reputable company that specializes in screening applicants and managing properties.



Sally Anderson is a writer and editor based in Seattle.
e market

7/07/2006 08:21:00 AM  
Anonymous Anonymous said...

This converstion is so old on this board.. I guess we are all pretty progressive

7/07/2006 08:21:00 AM  
Blogger Richie said...

The only debts my wife and I have at this time are:

Our Mortgage
Her Car Payment
My Car Lease

Nothing else. I hate owing money. We decided to finance her car because the dealer gave is 2.9% financing for 3 years. The $$ we got for selling her old car was put in a high interest savings account, and that $$ will offset the interest paid on the current loan, how could you go wrong with that?

My car is leased for financial (business) reasons.

As for that, we have no other debt elsewhere. I can't beleive how people can rack up so much credit card debt. If you can't afford to pay for it at the end of the month, don't buy it.

Stupidity and irresponsibility is what keeps credit card companies in business.

-Richie

7/07/2006 08:28:00 AM  
Anonymous Anonymous said...

{{it is a sad situation
200k a year and nothing to show except some fancy gadgets and big bar bills. }}

Not to mention a closet full of designer clothes, rent receipts, as well as being able to eat in every 'trendy restaurant' recommended by the NY Times & NY Magazine downtown.

Most are nothing special - bad food, and snotty obnoxious service.

7/07/2006 08:32:00 AM  
Anonymous Anonymous said...

I love my $600 jeans! ;)

-jamey

7/07/2006 08:36:00 AM  
Blogger patient homebuyer said...

$600 jeans

well i would not pay more than $300
for mine!!!!

7/07/2006 08:48:00 AM  
Blogger grim said...

We seem to repeat discussions often, but I think topics like this are important to open eyes.

While we seem to have a good number of "regulars", we have a huge transient population. Folks that might stick around for 20 minutes or so.

grim

7/07/2006 08:54:00 AM  
Anonymous Anonymous said...

Forget the Jones.

People fail to realize that marketing gurus are screwing you and doing a great job at it too.

The shift has gone from push sales to creating a need.

Turn off the boob tube for awhile and turn away from the marketers and you will soon realize your wants will decrease and your wallet size will increase.

Trust Me.
SAS

7/07/2006 09:03:00 AM  
Blogger Richie said...

TV's are horrible things.

Some people can live without TV (myself being one of them).

Most families would have no idea what to do if their TV was out for one day.

-Richie

7/07/2006 09:11:00 AM  
Anonymous Anonymous said...

Personally.. I love the TV before I goto bed I have a glass of wine and watch My Name is Earl.. My kid does not watch TV on the weekends except for early morning Sesame street and 1/2 hour before she goes to bed the Good Night Show on PBS.. ANd there is nothing like movie night with the kids.. So TV isn't bad.. Its like everything else in life. Moderation is the Key.. Too much of anything is not good.

7/07/2006 09:19:00 AM  
Blogger grim said...

I'm sure you all remember the "Great Power Outage of 2003".

I've never seen so many people outside, having a good ol' time.

We had an improptu block party to finish off the beer that was warming up in everyone's fridge. Never saw so many kids playing outside before.

The next night was a ghost town.

-grim

7/07/2006 09:24:00 AM  
Anonymous Anonymous said...

its not the TV shows I was really refering to really (Although there is the dumbing down effect)....

TV is just a major tool by marketers. There is also, sports, Madison Ave, infotainment mags, drug companies (remember, only USA and New Zealand advertise drugs), hell your doctor is even a medium. (Don't tell me to change my lifestyle, just give me the damn pill I hear about...).

The marketers in this country have done an excellent job. Maybe not with some people on this board, but I tell you what, if you have a kid between 15-22, MTV, not you, owns that kid. And if you don't think so, I have ocean front property in Arizona to sell you...

Look like the sun is finally out.
Going for a ride with the top down.

Have a good day guys (and ladies).
SAS

7/07/2006 09:29:00 AM  
Anonymous Anonymous said...

Some where along the line parents stopped enforcing the No TV go outside rule and replacing that with X-Boxes and Playstations. We had the Commadore 64.. We had a rule in our house. 1/2 hour a day. and only after you finished your dinner.. Which we all ate together promptly at 5:00pm.. You can't do that anymore. Its sad

7/07/2006 09:31:00 AM  
Anonymous Anonymous said...

I see these kind people all the time. It's all showoff. Sure, having lots of money is great but it will not will make you happy! Grass is always green on the other side.

-Poignant

7/07/2006 09:32:00 AM  
Blogger grim said...

Glad to hear there is another Commodore 64 aficionado in the house..

LOAD "*",8,1

jb

7/07/2006 09:40:00 AM  
Anonymous Anonymous said...

hahahahahaha.. Life was so easy then

7/07/2006 09:43:00 AM  
Anonymous UnRealtor said...

Richie, I'll strongly consider not having a TV when kids enter the picture. I do enjoy movies, news, etc, so it would be hard to give up.

Definietly no TV in the kid's bedroom, though, at a minimum. And MTV will be blocked throughout the house.

7/07/2006 09:43:00 AM  
Anonymous Anonymous said...

I had to fight my 10 siblings for it.. I was the girl so I generally lost out.. It would be my bed time and my brother would finally let me play..Haven't been able to get into Playstation or X-Boxes though.. Prefer the On line games.. Scary

7/07/2006 09:46:00 AM  
Blogger patient homebuyer said...

COMMODORE 64 THAT IS FUNNY

hey what about the vic-20?

when i was a kid going to your room was a punishment. not these days

7/07/2006 09:53:00 AM  
Anonymous Anonymous said...

Hah, anon 10:46. I thought I was the only one who grew up with ten of us fighting for everything.

We didn't even know any "Joneses," we were so poor - let alone know families could actually all fit into one car and go to the same place at the same time.

Catering was what my mother always yelled about..she was perpetually "sick and tired of catering to the bunch of you!"

Rich..right on with the {{ }}.

I'm pretty sure it's no longer possible to stop the Joneses Syndrome, though, just by talking about it.

Pat

7/07/2006 10:10:00 AM  
Anonymous Anonymous said...

Pat,
I was a pretty lucky kid. My parents are well off but they never had nice cars or the latest fashions. And they just got cable last year. We acted poor in a rich neighborhood.. Taught me alot about finances actually. My friends didn't have a clue and still don't. They are all trustifarians. Still living off Mommy and Daddy.. I get from thier parents all the time.. "Can you talk to my daughter .. We are going broke suporting her and her husband" But once you get someone in a pattern like that they only way to get them straight is to cut them off.. None of them are willing to do that.. Its sad. It really depends how you were raised and what your family values are.

7/07/2006 10:25:00 AM  
Blogger chicagofinance said...

grim said...
Glad to hear there is another Commodore 64 aficionado in the house..
7/07/2006 10:40:32 AM


grim:

I always envisioned you as a TRS-80 type [a.k.a. Trash 80].

7/07/2006 10:25:00 AM  
Blogger grim said...

Actually, I was more of an Amiga kind of guy..

7/07/2006 10:34:00 AM  
Anonymous Anonymous said...

Seems that I'm of similar attitude toward spending as other commenters.
But in a comments section at http://thehousingbubbleblog.com/?p=1005
people were complaining how 300k isn't enough to live in Manhattan.

P.S. What's with $600 jeans craze, I guess I should lay off my wife for those relatively "cheap" $150 pairs.

7/07/2006 10:35:00 AM  
Anonymous Anonymous said...

Anon 11:25, my daughter also doesn't know that we are well off. She asks why she has no car that "goes" and no TV in her bedroom.

She sees the Joneses, and she is only four. She watches no TV with commercials, but she knows.

The Joneses are insidious.

Do we risk her sense of self-worth by forcing her to be "different?" In a prior post, one person said he drives a certain car so that he can drop his kids off at school "appropriately" or something to that nature. I have been tempted. It is easier than to do the educating.

7/07/2006 10:48:00 AM  
Anonymous Anonymous said...

I am very proud of the way my parents raised me. Though I can tell you you growing up I was very resentful and angry at my parents for all of the times I didn't have a TV in my room or couldn't goto a movie because I had already spent my spending money on something else. But now everything I own now is because of my husband and I and we had no help from my parents or his even paid for our own wedding..So though it may sting while growing up.. I have more appreciation for the things I have and not the things I don't..My parents are the only surviving original family in the neighborhood save 1. The rest had to leave because they lost money in 89.. It was scary in one swoop All of the kids I grew up with left the neighborhood because of the crash. Only 1 remained. The other parents are still amazed that my parent still live in the old house and ask me all of the time.. How do they do it? They put 10 kids threw college and private school. I said while you all had landscapers and pool people.. my parents had kids and themselves .. My mother raised us not a Nanny and she held a parttime job working from home. I am so proud of them .. It makes me teary eyed

7/07/2006 10:58:00 AM  
Anonymous Anonymous said...

Your daughter will feel the same way eventually. It took me until I was 26 to appreciate it

7/07/2006 10:59:00 AM  
Anonymous Anonymous said...

Hehe, my folks were even better.. Nothing was mine unless I paid for it. Even birthday or christmas presents were merely 'loans', which could be confiscated at any time.

To this day I remember the "birthday loans", and how I learned at a very early age that if I wanted something I would have to go out and get it myself.

I'd say it was a pretty clever plot, but then I remember how my folks smoked when I was a kid and had the same carpeting for 30 years with tons of cats which I was allergic to. But now that I think about it, when I felt better and healthier after leaving the house (for college), that's a subliminal boot to the ass out the door right there... Holy cow, they were geniuses!

7/07/2006 11:26:00 AM  
Anonymous Anonymous said...

Same here.. I left home when I was 18 because that was the cut off.. You had to pay going rate for rent If you stayed after college..(which my parents saved and later gave as a wedding present)

7/07/2006 11:39:00 AM  
Blogger Richie said...

Richie, I'll strongly consider not having a TV when kids enter the picture. I do enjoy movies, news, etc, so it would be hard to give up.

Definietly no TV in the kid's bedroom, though, at a minimum. And MTV will be blocked throughout the house.


I agree with you there. Actually, my wife got me into the whole "No TV in the kids bedroom" thing. At first I thought why not put a TV in there? Then as I thought more about it, TV's are a bad idea. Kids need to be more creative and less dependent on TV to let them pass time. Let them interact with other kids or play outside.

Same rule applies to the computers as well. There'll be no computer in the kids' rooms, they'll be in the office where they belong.

Our son is only 2 months old, so we have quite a while to go!

-Richie

7/07/2006 11:46:00 AM  
Anonymous Anonymous said...

Funny, just this morning I went to a private school in Chestnut Ridge, NY (Green Meadow Waldorf School) to check it out for my young children.

They have a policy whereby they request (beg) parents to prohibit ALL media, tv, computer, radio from children until 5th grade. I was stunned, it sounded so harsh. But then they explained that those who watch tv truly become numb to their surroundings and they really want the children to learn by doing, not watching.

K

7/07/2006 11:56:00 AM  
Anonymous Anonymous said...

So how much longer can the NYC consumer hang on??

The market is down 110 as of 1:30pm. Oil prices near record $75, and rents, mortgages & utility costs continue to rise.

But, everyone in NYC has this hedonistic attitude and believes things are great.

I would think that people would try to save money and maybe do things like take the subway or train instead of driving everywhere, using a parking meter instead of garage in Manhattan, not spending thousands at Bloomingdales & in soho every weekend, and of course all the money wasted at these uber trendy but utterly trashy restaurants & clubs in Manhattan.

7/07/2006 12:35:00 PM  
Anonymous Anonymous said...

What about doing some other activity with your children instead of Chauffering them to the mall, and spending all free time shopping and spending money.

Ever goto Target or any of these other big box stores on the average day?? 90% of people look disgusting, are anywhere from slightly overweight to obese (men & women), rude, hostile, combative & agressive, and just acting stupid when they think they are cool.

Life is more than spending hundreds & thousands of dollars on trendy crap every weekend, and more than IPODS, Cell Phones, Video Games, & What is on TV.

The problem is that most people can't /won't think for themselves or do anything other than what the prevailing trend is (even if it means going into serious debt).

7/07/2006 12:41:00 PM  
Blogger patient homebuyer said...

i don't know when it will happen in nyc.
i just went to lunch in flatiron area the lines at jamba juice and
the like are long

people have money to burn it seems

7/07/2006 12:42:00 PM  
Anonymous Anonymous said...

{{people have money to burn it seems}}

Rents are also the tightest in years. The mean rent for Manhattan is close to $3,900 from leases signed last Quarter and close to or over $2,000 a month in Queens and in the other 4 boros.

How do people afford to pay that much in rent each month??

To get something affordable or a bedroom for less than $1,600, you need to go into southern Queens near Valley Stream near the Belt Parkway or near Ronkonkoma in Suffolk.

7/07/2006 12:48:00 PM  
Blogger chicagofinance said...

Anonymous said...
{{people have money to burn it seems}}
Rents are also the tightest in years.
How do people afford to pay that much in rent each month??
To get something affordable or a bedroom for less than $1,600, you need to go into southern Queens near Valley Stream near the Belt Parkway or near Ronkonkoma in Suffolk.
7/07/2006 01:48:51 PM


I annoint you the new $300 jeans.

BBBBBBBOYCOTT $2000/month Rentals.

Enough!

7/07/2006 01:05:00 PM  
Blogger chicagofinance said...

Here you go.

Slightly sketchy but perfectly fine neighborhood.

5 minutes to Grove Street PATH Station. Helaciously convenient, and two PATH stops from the West Village and WTC.

read 'em and weep chowderhead, and I bet the rents are even lower than posted if you actually show up.

http://www.dixonmillsapts.com/newavail.htm

7/07/2006 01:12:00 PM  
Anonymous Anonymous said...

I lived right across the street. The area isn't that bad I moved a year ago I hear from friends still in the area that its even better now.

7/07/2006 01:19:00 PM  
Anonymous Anonymous said...

God I miss that commute

7/07/2006 01:19:00 PM  
Anonymous Anonymous said...

{{and I bet the rents are even lower than posted if you actually show up.}}

Most likely higher with some ridiculous application and/or broker fee.

Apartment rentals are what sales were back in 2003-2004 along with the inflated sense of arrogance on landlords / brokers part.

7/07/2006 01:19:00 PM  
Blogger chicagofinance said...

with every comment you expose your identity even more

7/07/2006 01:28:00 PM  
Blogger RichInNorthNJ said...

with every comment you expose your identity even more

{{Faker?}}

{{Envious?}}

{{Lou-Sir?}}

7/07/2006 01:34:00 PM  
Anonymous Anonymous said...

Is this the Friday afternoon coffee klatsch with a special game of Clue?

O.K., my turn. LS in the drawing room with $300 jeans.

7/07/2006 01:40:00 PM  
Anonymous Anonymous said...

about those Manhattan rents: Unfortunately, $2000/mont gives you only a lousy 1BR far from trendy areas and you have to share it with cockroaches (otoh, you don't have to share it with girlfriend anymore).

You may find decent 1BR with $2,700. Similar rent controlled apartment may cost anything from $100 to $1500.

I know..makes no sense to pay this much. Also, taxes will raised after next state and city elections so I will certainly move out before that.

7/08/2006 05:47:00 PM  
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