He could have moved to New Jersey where it certainly is cheaper than the city or the Hamptons, and they have good public schools, so no need for private school tuition. He’s just trying to justify his actions and didn’t want to downgrade his lifestyle.
It’s also not a cheaper move when you do it impulsively and have to carry two mortgages for a long time. Yes, he is trying to justify his actions and also to fit the narrative of his article.
@brantly Maybe he did make a fairly large amount of money and pissed it away. We don’t know because he didn’t provide those details other than saying vaguely that it was too much to qualify for FA and that his 1040 wouldn’t be deemed to be middle class. It would be interesting to know just how much he made when he’s trying to compare himself to middle class struggles.
MIdwestDad3,
Let’s say I make $200,000 a year. If I have the downpayment, not too much other debt, and maybe a little more savings, I can probably afford a house that costs $700,000. Would you agree?
Then let’s say my income drops to $150,000 instead of staying at $200,000 or rising, May start to have some small problems? Would you agree?
Now my income drops to $100,000. Now I am squeezed. If I view this situation as temporary, I may start borrowing, right? After all, I am doing some things that should increase my income back to $200,000. The cost of selling and moving is not free either. May cost $50,000 to move. Right?
Now my income flucutates between $100,000 and $150,000 for years. I keep thinking it is going to rise but it never does. I am in trouble now. I can’t save enough for a private college education.
I am curious. Did I say NG is middle class or did I say he has similarites to the middle class? His education is not middle class. If he is really broke, he has similarities to the middle class. The rising cost of colleges affects the upper middle class and the middle class.
I think posters are reading stuff I didn’t say and reading too much into what NG wrote. Someday, this thread will die. I may bring it up in 3 months and see if NG really caused any damage to the middle class. Since I am a betting man…I am going to bet no. 
I was a huge risk taker. I had $30 bucks to my name when I was 25 years old. @busdriver11, I had a my net worth made up of coins in that Hills Brothers Coffee Can. I did have an undergraduate degree from UC Berkeley so maybe that separated me from the middle class. Some of you posters sound like my mother. I am glad I didn’t listen to her and to some of you. I have more than $30 now.
@Iglooo
“Are you saying his plight is due to economic problems in this country? Can you think of any country where he won’t have problems without changing his ways?”
Well, for one, I can’t think of a country where it costs half a million dollars to educate two kids – even if we’re talking elite universities. An elite education is nearly free - or very, very affordable - in most of the developed countries.
Who in their right mind would buy a $700k house on a salary of $200k?!?!
This is why we never traded up. My mortgage is $1000 a month and that includes a HELOC we took after 16 years to do major reno’s and an addition. We still owe less than $200k and I still have a decent amount (over $100k) of equity left. We plan on staying here forever. No need to downsize as we never upsize.
“Let’s say I make $200,000 a year. If I have the downpayment, not too much other debt, and maybe a little more savings, I can probably afford a house that costs $700,000. Would you agree?”
Yes, you technically can, but why WOULD you? Why would you live up to what you can afford when as you correctly note, a drop to $150,000 will squeeze you? Why wouldn’t you prioritize maximum savings into a 401k and eliminating debt and having a nice nest egg for a rainy day instead of the immature “me see pretty house” response?
@MidwestDad3 I have to give my husband credit for that. When I had my first opportunity for a 403B he gave me the advice to “pay myself first”. I did not max out my contributions but I have steadily contributed since around 1984. Exactly as you said, the money is still there and has grown from a lifetime of jobs. We are fortunate that we have been able to help our children graduate without debt and still have money for retirement. If only every parent encouraged their child to do the same…
DS, I can only speak from personal experience, but we have never lived in a house that is 3.5x our combined annual salaries, let alone move in and then have one person quit their job. 2x maybe. And certainly not while owning another house we couldn’t sell. Like I said earlier, our grandparents were Eastern Europeans. Maybe its genetic, but we just don’t like to be in situations we can’t get out of. Call it risk avoidance or prudent financial planning. If I sound like your mom, so be it.
"I was a huge risk taker. I had $30 bucks to my name when I was 25 years old. @busdriver11, I had a my net worth made up of coins in that Hills Brothers Coffee Can. I did have an undergraduate degree from UC Berkeley so maybe that separated me from the middle class. Some of you posters sound like my mother. I am glad I didn’t listen to her and to some of you. I have more than $30 now.
25 years old is a great time to take risks. A lot of us hardly had much in the bank then. I was making peanuts and pretty much lived paycheck to paycheck as I built experience and a resume. I’m sure I had a negative net worth as I had car payments to make. Many people have student loans to pay at that age, too, so negative net worth is probably the norm then. But, @dstark at 25 my guess is you didn’t have a family to support yet? My guess is that later in life with certain responsibilities your risk tolerance probably changed. Maybe not you because I know you swing for the fences more than I do but it does for most of us. We shouldn’t be having the same financial maturity at 30, 40, 50, 60 that we had at 25. That’s part of the maturing process that comes with age, responsibility, and experience.
I guess this is the crux of it. Are you a failure if you don’t send your kids to a place that cost half a million? Do kids fail at their life if they don’t go to half a million dollar universities? You sound as if there’s no life outside the elite. Half a million dollar tuition is a necessity and it’s an “extortion” if the tuition is high since elite university is like food and utility, gas, electricity.
dstark, I am sure many here took risks and accepted its consequences. There are so many things in your post that bug me. Is it absudity or arrogance to call objections to NG’s attitude equal to mindless negativity?
That would totally depend on all kinds of factors. How many kids? Health? Any family members you might need to help out? The relative job security? Work in a field that has peaks and slumps at intervals? Retirement fund philosophy? I’d say if you want your kids to go to expensive private schools and on to Ivy league colleges, you want to fund your retirement responsibly, you are self employed or work in a volatile industry, are ever subject to layoffs, etc., then absolutely NO, a $700K house is not affordable on that salary.
The college tuition cost discussion is a valid discussion for talking about middle class America’s financial concerns (all classes really) but considering the fact that NG did not pay the lion’s share of his children’s tuition, it’s not a real factor or cause of NG’s financial instability. It explains why his parents paid the tuition but it doesn’t explain his financial hole.
I guess I should have used $350,000 in income and have the income drop to $150,000 or some other combination.
It was just an example to show how somebody could get in trouble.
Reasons a person might buy this place…
They want to live in this area and they like the house.
They think they can afford it.
They think the house is going to appreciate in value.
Mortgage interest and the property tax may be deductible lowering their costs of ownership.
Maybe they want to show off.
Reasons you may not want to purchase this place.
You may not be able to afford it.
You may not want to spend a large percent of an income on a house.
You may move in a few years.
You may prefer to invest your money elsewhere.
You think the house is a poor investment.
You want to live in a cheaper place.
Anyone else can come up with their own reasons.
My point is there are a lot of reasons either way when deciding to purchase this place.
People should do what they want and not expect others to live the same life.
Your choices don’t matter to me and my choices shouldn’t matter to you unless I work for a large financial institution and I am going to blow up the economy.
Do we have anybody here who is going to blow up the economy? Please don’t. I don’t want to see negative interest rates in the United States.
'People should do what they want and not expect others to live the same life."
Gabler put his life and the choices he made on the pages of The Atlantic. If he didn’t want readers to have an opinion and comment on his choices he shouldn’t have written the article.
@doschicos, I am more risk averse now. My guess is you take more financial risks now than I do.
This person was a Rhodes scholar who did a masters followed by PhD at Oxford and is currently in the middle of an MD.
Btw, the cost of attendance at Stanford in 2006 when she completed was around 41,000.
@Youdon’tsay, thanks for the link. I am listening.
25 percent of Americans with incomes of $100,000 to $150,000 can’t come up with $2,000 in an emergency.
@Youdon’tsay,
@MidwestDad3,
I listened to the show. It’s a great show.
Thanks for the heads up.
http://onpoint.wbur.org/2016/04/27/middle-class-and-cash-poor
^ I think a lot of people are terrible with money and spend too much on stuff they think they need instead of saving.
No question, spending is a LOT more exciting to most folks than saving. Watching TV, movies, and other media is very insistent that we are supposed to buy, buy, buy and spend, spend, spend. Saving is seen as an abbération rather prudent and admirable.