38 thoughts on “Spreadin’ Love 538”

  1. I think the rich person won’t stay rich if she and her husband don’t rein in the spending.
    The student debt should be paid off now, rather than at bonus time.
    The furniture and 3-week European vacation should have been saved for a post-student-debt bonus. Personally, I would also put the country club into the category of indulgent spending.

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  3. How do people work 80 to 100 hours per week? My 40 hour per week job completely exhausts me. Granted, I have two small children but I still would not have been able to work those kinds of hours even in my pre-kid days.
    I’ve been thinking a lot about quality of life versus cost of living issues because we are considering a move from the midwest to the west coast. Our combined salary now is around $130k and would be around $200k if we moved and I can’t decide if it’s worth it.
    I really hate winter though and it is hard to put a value on not having to deal with crappy weather for seven months out of the year.

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  4. From the article:
    “Iā€™ve always wanted a sectional with a chaise, so I decided to go for it. It was $4,500. But god, itā€™s beautiful and comfortable and itā€™s microfiber so the cats canā€™t destroy it.”
    Good thing cats can’t read.
    scantee said:
    “I really hate winter though and it is hard to put a value on not having to deal with crappy weather for seven months out of the year.”
    Careful which part of the West Coast you’re talking about–Southern California is predictably sunny, but much of the rest of the coast can be pretty depressing. My old stomping grounds in coastal WA get something like 200+ days of rain a year. Even San Francisco is famous for fog.
    I don’t care for Texas summers, but September-May is fantastic compared to Washington State. We used to want a Notre Dame job for my husband, but my husband and I have gotten so spoiled by cloudless 70 degree January days in Texas that I don’t think we could ever live in the snow belt long term. It’s simply a different way of life when you can enjoy the outdoors for most of the year.

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  5. We are thinking the bay area. I don’t need it to be sunny all the time I just don’t want it to be cold and snowy for half of the year.

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  6. Boy that rich person was silly, and, yes, a financial train wreck waiting to happen. But, I don’t judge people’s spending, unless its irresponsible. In this case, the paying off of the student debt depends on what the terms of the debt are (though at that level, they’re unlikely to be favorable enough that they should pay down the debt that isn’t effectively free money). I think the vacation & country club depends on whether they’ve figured out their budget and are staying within it (remembering to pay for retirement and college savings at the same time).

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  7. “We are thinking the bay area. I don’t need it to be sunny all the time I just don’t want it to be cold and snowy for half of the year.”
    Oooh, that is a dilemma. I used to read socketsite.com a lot, and I’m afraid you’re going to feel really poor in the Bay Area on $200k.
    Have a peek:
    http://www.socketsite.com/
    “In this case, the paying off of the student debt depends on what the terms of the debt are.”
    She’s got a 7% loan, but it sounds like they are going to start paying off the loans soon. It’s just that it feels like that “soon” may be self-deception, as they’ve already prioritized a lot of fluffy stuff over those loans. No kids, no plans for kids. They sound really generous (college funds for nieces and nephews), but super financially disorganized. It’s weird that they are both in green eyeshade fields, but I suppose that’s not uncommon.

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  8. “I feel like we shouldnā€™t loan any money that we arenā€™t comfortable with never seeing again, you know? Like, set it up as a loan, but be totally okay with it never being paid back.”
    She’s so sweet and so dumb. I know people say this sort of thing, but doesn’t she see how uncomfortable this would make most recipients?

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  10. We would most likely be in Berkeley/Oakland rather than San Francisco. Still outrageously expensive compared to what we have now but maybe not quite as bad (maybe?). We would be moving there debt free if that makes a difference. I’m sure you can tell that I’ve convinced myself that, oh yes, it makes a big difference.

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  12. My research suggests that the public schools in Berkeley are pretty decent. We are coming from an urban district so it would be similar to what we have now, I think.

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  13. I think that those “rich people” are fools. I haven’t written about this on the blog and really can’t until the lawyers finish dealing with matters, but Steve was part of a giant layoff at his firm last October. He and thousands of others were let go. Other friends of ours have been seriously screwed over by the financial meltdown on Wall Street over the past few years. Wall Street is a big part of life out here in the Jersey suburbs.
    The Wall Street survivors were those who kept their heads when the money was flowing and didn’t spend too much. They paid off their debt and stockpiled months and months of reserves. Those that are in hot water right now and are those who thought that this Wall Street crap was a temporary setback. Still, there are still plenty of people who did everything right and are still screwed over, because there are simply no jobs.

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  14. “Good thing cats can’t read.”
    Ha!
    5-6 years ago, we were poor. We made 6 figures, barely, but debt was killing us and we had bought a house at the height of the bubble. Windfall came, and what did we do? We paid off all that debt. I’ll never forget writing the check to pay off $80K of student loan debt. Best. Feeling. Ever.
    My husband and I are well matched. I would spend profligately (and I still do, but I buy books and stuff I don’t need for the kitchen), but he always holds back. I have a whole family trip planned to Ireland and Northern England for the summer, but he keeps saying “What if one of us loses our job?” It dampens things. šŸ™‚ But I know he’s right.

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  15. One thing that couple has going for them is that they don’t have a mortgage, they have a $100k paid-off house in the hinterlands, they don’t have kids, and they do have $93k in cash. That is something, but you’d still feel pretty stupid if you’d made all that money, got laid off, and then had almost nothing to show for it except the $4500 sectional. (I hear that during the economic devastation that followed the Texas oil bust, there was a popular bumper sticker that went something like this, God give us another boom and we promise not to piss it away this time.)
    I’ve personally found it very educational to try to sell used stuff. You’re lucky to get 10 cents on the dollar, and knowing that the second an item leaves the store, it loses most of its value has made me a less enthusiastic shopper.

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  17. O, Laura, I am sorry to hear about your husband. If it’s any consolation, I have had quite a few friends and family members lose their jobs over the past six years, and most of them have landed safely.

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  19. It’s cool, guys. I really, really am not allowed to write anything yet. So, I have to keep my fat mouth shut. I think I will be able to write about it in another couple of weeks. Just one quick whine — COBRA is damn expensive.

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  20. Good luck with the lawsuit!
    Wendy said:
    “My husband and I are well matched. I would spend profligately (and I still do, but I buy books and stuff I don’t need for the kitchen), but he always holds back. I have a whole family trip planned to Ireland and Northern England for the summer, but he keeps saying “What if one of us loses our job?” It dampens things. šŸ™‚ But I know he’s right.”
    I am also blessed with a non-spender husband. The upside is that he’s never going to come home saying, “Look what I just bought!” of anything bigger than $20. There are no surprise boy toys, the curse of many a better woman than myself. The downside is that he says that we’re not doing any serious home renovation until the kids’ college is funded. I can’t argue with that, much as I’d like to (pink formica!).

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  22. Dark plum toilet and bidet! Purple-swirled fake marble shower, vanity and tub! Bubble gum pink carpet everywhere! Salmon pink pickled finish kitchen cabinets and hardwood floors!
    Someday I will share photos. I don’t want to offend our sellers, but this stuff needs to be preserved for posterity (at least photographically) as a sort of museum of late 80s/early 90s taste.
    The location is fabulous, though.

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  23. I do not accept that dark plum toilets and bidet’s were any form of taste, even in the 80s/90s. Avocado kitchen fixtures, I’ll accept (70’s, right?) but not dark plum toilets (and bidets).

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  24. bj,
    Remember how jewel tones (emerald green, electric blue, grape purple) were big in the 80s for clothes? This is the home decor version of that trend.
    I’ve also seen a video of an 80s Southern California bathroom from bubbleinfo.com that reminds me a lot of our future bathroom, although it’s black rather than pink/purple. The California bath had all black fixtures (including the toilet) and lots of shiny black tile. Jim the Realtor (the blogger) said it looked like it would be perfect for coke parties.
    That’s another thought to moderate consumption–20 years from now, our carefully chosen home finishes will make homebuyers giggle.

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  25. Amy P.learn to DIY. You can rent sanders and refinish the floor. Paint the cabinets. A plain white toilet is about $130 and is easy to install (really easy). I have done it by myself. A bidet won’t be much more expensive or difficult. As long as you aren’t moving plumbing you can do all those things yourself.
    I agree about your comments re: selling stuff. That is why my home is furnished mostly from Craig’s list, yard sales and thrift shops. I defy anyone to figure out which things came from the store new, and which didn’t. I have gorgeous china that I paid 79 cents a plate.

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  26. You could paint the porcelain.
    One thing that couple has going for them is that they don’t have a mortgage, they have a $100k paid-off house in the hinterlands, they don’t have kids, and they do have $93k in cash. That is something, but you’d still feel pretty stupid if you’d made all that money, got laid off, and then had almost nothing to show for it except the $4500 sectional.
    The “rich people” aren’t rich. They have too much debt to be rich. They are earning a lot of money now. He could lose his job tomorrow, or have sudden health concerns. At present, they have a large rental payment, for the large apartment. They can’t deduct the rent from their taxes. They’re paying rent, but are not building up equity. They have no dependents. If they suddenly need to access the money in the retirement accounts, they’ll pay a penalty.
    Meanwhile, paying the minimum on their student debt eats up $1,000 a month. They did buy investment products. I would bet the financial advisor was paid a fee or commission for the retirement accounts, and the relatives’ college fund.
    Amy P, I would bet your family will be in better financial shape than they will be in 20 years.

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  27. “I would bet the financial advisor was paid a fee or commission for the retirement accounts, and the relatives’ college fund.”
    Not unlikely.
    It was kind of crazy that given that both of them are in fields that require a lot of numeracy and the husband is in high finance, that they need a financial adviser to tell them where to get a good interest rate on their savings (!!!). On the other hand, it sounds like the adviser is helping to steer them in a better direction.
    Should it worry us that so many bankers are so bad with personal finance?
    “Amy P, I would bet your family will be in better financial shape than they will be in 20 years.”
    I certainly hope so, while feeling bad for them, since I had a lengthy newylywed spree myself. I think I was just about the wife’s age when I opened my eyes and started to understand difficult concepts like “debt” and “saving.”

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  28. Amen @AmyP – “It was kind of crazy that given that both of them are in fields that require a lot of numeracy and the husband is in high finance, that they need a financial adviser.” Yes, that’s kray kray indeed.
    Finance is not one of the wife’s core competencies, so I read their bad decision to hire a broker (I mean “financial adviser” er, right) as part and parcel of their overall need to keep up with the Joneses. I attribute this particular bit of poor judgment to the fact he was raised with poor personal financial habits, plus the whole misplaced nouveau riche deal (i.e. “must wear the right wardrobe to network”) plus the spender personality at play.

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  29. I’m inclined to give him a pass about the right wardrobe thing. It is so obviously class anxiety, and so easy to dismiss if it isn’t something you experience.

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  30. “It is so obviously class anxiety, and so easy to dismiss if it isn’t something you experience.”
    I bet these people are putty in the hands of any unscrupulous salesperson.

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  31. Not necessarily. Clothing is an obvious signifier. Just out of curiosity, why are so many people so down on their sectional purchase? People didn’t have that reaction to Laura’s mentioning of her sister’s (sister in law?) big, expensive entertainment center that is a struggle to sell. Is it just that we know more about their finances? (I don’t want to know more about Laura’s relative’s finances.)

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  32. I wasn’t down on their sectional purchase, but part of me wonders why it’s $4500. I feel confident I could score one for more than 50% less.

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  33. But quality can really vary in furniture (and price actually matters to quality of furniture). If you turnover a $1000 sofa and look at the joins etc, versus a $3000 sofa you will see a big difference in quality in favor of the $3000 sofa. If they intend to keep that sectional for a long time, then they did the right thing.
    I have also found that price really matters to design as well. I can find things that are reminiscent of mid century modern, they sorta capture the feel, and they are inexpensive, but to really get the design, it costs.

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  34. I noticed they don’t actually make 360,000 — it’s actually 225,000 + bonus + one time signing fee.
    The bonus might be guaranteed, say, if he shows up every day, in which case they can count it, but otherwise they shouldn’t.

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  35. “If you turnover a $1000 sofa and look at the joins etc, versus a $3000 sofa you will see a big difference in quality in favor of the $3000 sofa. If they intend to keep that sectional for a long time, then they did the right thing.”
    Does not compute. I personally do not have it in me to buy a $4500 sectional. I can’t bear to spend $4500 on a car, much less furniture.

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  37. “I noticed they don’t actually make 360,000 — it’s actually 225,000 + bonus + one time signing fee.”
    Not good.
    “Just out of curiosity, why are so many people so down on their sectional purchase? People didn’t have that reaction to Laura’s mentioning of her sister’s (sister in law?) big, expensive entertainment center that is a struggle to sell. Is it just that we know more about their finances?”
    1. I thought she was being a bit naive about the sectional and her kitty’s ability to make it unsuitable even for college student porch furniture.
    http://www.barnesandnoble.com/w/i-could-pee-on-this-and-other-poems-by-cats-francesco-marciuliano/1109686843
    2. The mental exercise I’d try to do is to ask the question, if I had some sort of major crisis, would I prefer to have the $4500 or the sectional?
    3. It’s the debt. I don’t think people who have $200k in student loans should be buying that kind of furniture.
    4. Maybe it’s very American of me, but I think of sofas as being consumables, which is why people might make a distinction between upholstered furniture and Laura’s relative’s big, expensive wooden entertainment center. You might really believe that you’ll live to the end of your days using the entertainment center, while expecting to get a new sofa every 10-12 years. (I have an 11.5-year-old sofabed that no longer unfolds that I’m plotting against.)

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  38. 5. $4500 would be a really nice addition to a downpayment fund.
    6. Oh, and Apartment Therapy to the contrary, it’s not a great idea to buy expensive furniture that works in your current rental, but may not work in your next home.

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