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<p>Absolutely. It really does bother me how people act like they are so savvy when in fact they just happened to buy and sell at good times. </p>
<p>I’m not defending every action this guy took, especially the biggest mistake of borrowing so much money for a home, but his actions are not such that he can single-handedly destroy the credibility of The New York Times.</p>
<p>Not to mention the swipe at his wife and her body size. That takes away a lot more credibility in my eyes.</p>
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<p>I disagree. Yes, there are situations beyond our control (health problems, family problems) that can land you in a tough financial situation, but this guy and his wife did it all by themselves, every step of the way. It wasn’t a matter of luck, good or bad, it was a sense of entitlement that did them in.</p>
<p>The fact that both he and the new wife came out of 20 year marriages with no apparent assets says their spending issues have probably gone on for some time…I’m just surprised that the economics editor of the Times would tell this story, I’ll never read another of his stories without wondering just how savvy he is!</p>
<p>This represents everything my parents taught me not to do. I feel sorry for the guy, but I also blame him. Buying a house when he did, with his income and other obligations, was irresponsible. There are lots of things I myself could do financially, but they wouldn’t be wise over the long term. I’m surprised he didn’t consider the long-term.</p>
<p>I also think his “confession” is more about making himself feel better. He feels stupid, and he feels guilty, and he feels scared. Publishing this may have made him feel somewhat less stupid, guilty, and scared, because now at least none of this is a secret anymore.</p>
<p>Donna,</p>
<p>Starting a new relationship on rocky ground is not a good idea. If you can’t be honest about finances with a new partner, then I question the relationship. The same people who urge restraint on college loans should be agast at an Economic Reporter on the Times doing what he did. </p>
<p>I think his “confession” is about selling books. I certainly won’t buy it. And I think less of the times for giving him free advertising for the book. </p>
<p>At to what the 4K a month was for, we don’t know if some was alimony and deductible, and/or other variables. What we do know is this guy’s irresponisiblity will create issues for a number of people. </p>
<p>As to luck – this aritcle was about two irresponsible people. From reading it, the author alludes to spending on luxuries I don’t - I commute to work on train and can’t remember the last time I took a cab.</p>
<p>And how does he plan to pay for college for all those children?? I got the impression that his sons were in the 11-to-14 age group.</p>
<p>And what’s going to happen to this guy if he loses his job? The Times is teetering on the brink, and it would be next-to-impossible for him to find a new one earning anywhere near that kind of money. He’s probably counting on sales of his book to bail him out. Good luck with that.</p>
<p>Actually, I do have some sympathy for him. If you’re living in a high-cost area, as I do also, money practically flies out the window on an everyday basis. For instance, my garage is close to $400 a month (and car is needed for spouse’s work; on-street parking exceptionally hard to find). That’s probably a house payment for some people. Our whole economy has been predicated on a spend-spend-spend mentality for so long. Those of you who were able to resist, I salute you.</p>
<p>Another dangerous practice mentioned in the article is the cashing out of retirement accounts. That trend will put lots of people in the poorhouse come retirement. We’ve hit the financial perfect storm: home equity down, Social Security shaky, corporate pensions on the way out in many cases, 401(k)s crashing.</p>
<p>In today’s paper, here’s another example of a financially irresponsible person:</p>
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<p>:p</p>
<p>Donna-- give the market in NYC about 6 more months and then, if you can afford the payments, in an old-fashioned way of valuing afford–as in like 1/4 of income, go ahead and buy, if you plan to stay long-term. I really believe it will be a good time to buy at that point. Also, when you buy, if it is possible to do it at a bank short-sale, and put some sweat equity into whatever you buy, you won’t regret it, long term.</p>
<p>Did the author and his wife make a series of bad decisions? Yes, they did. Do I feel sorry for them? Only a little bit. Did the NYT lose credibility in my eyes because of this article? Not really, although it has lost credibility in my eyes over different articles and issues.</p>
<p>What the article did was to flesh out the process whereas a lot of people are in danger of losing their homes. A lot of people acted irresponsibly, lived well beyond their means, trusted too much in the good times. What I would have liked to know is what proportion of the people who have been foreclosed or are in danger of being foreclosed behaved the same way as the author and his wife and what proportion are in the same situation because they lost their job, incurred illnesses, and so on. </p>
<p>Still, no matter which route people took to get to where they are now, the real estate crisis is real and is affecting the rest of the economy. Much as we might disapprove of some people’s spending habits, we need to solve the crisis. (And I am one who considers buying anything from JCrew as splurging).</p>
<p>I see this article as being about how two bad decisions can snowball.</p>
<p>His first bad decision: remarrying when he was paying a huge chunk of his income in alimony. He couldn’t afford that wife and that marriage.</p>
<p>His second bad decision: buying a house when he was paying a huge chunk of his income in alimony.</p>
<p>So perhaps his key bad decision was the divorce.</p>
<p>^^^ I agree. Plus, with three kids of his own, he took on the responsibility of his new wife’s child. Also, was the new wife getting child support from the father?</p>
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<p>I agree with that. Or I suppose I should say it felt like his story was not as dire as he had made it seem in the article. Unlike nearly every other American, this man was in a position to right his financial ship simply by committing the whole mess to paper.</p>
<p>To those who questioned his Xwife receiving 4K per month for herself and the 3 boys – he was left with sufficient funds to live modestly 2700 after tax, could have easily allowed him to rent a modest apartment. </p>
<p>The article said there was a mortgage on the house he shared with X and she is currently living in – so do we all think that 48 per year, from which mortgage has to be paid, is the lap of luxury for X and the 3 boys. But no one seems to care about her. And if Andrews has to file bankruptcy, what will happen to X – </p>
<p>The fact is divorce does require readjustment of spending. Andrews thought he and his beloved new wife were “entitled” to live the same as he was used to. Just cant be done. </p>
<p>I’ld also like to know how Andrews “reconnected” with his high school friend, who was a stay at home mom living on the opposite coast</p>
<p>More importantly, there are at least 5 kids involved here (his 3 boys, and the article refers to her 2 younger children). Dollars to donuts, these kids will be looking for lots of finaid.</p>
<p>The article spoke about the 120K as his ‘base salary’ with the Times. That signifies to me that there was additional income, either in the form of bonuses or outside work. Perhaps the alimony/child support took that into account.</p>
<p><<what i=“” would=“” have=“” liked=“” to=“” know=“” is=“” what=“” proportion=“” of=“” the=“” people=“” who=“” been=“” foreclosed=“” or=“” are=“” in=“” danger=“” being=“” behaved=“” same=“” way=“” as=“” author=“” and=“” his=“” wife=“” situation=“” because=“” they=“” lost=“” their=“” job,=“” incurred=“” illnesses,=“” so=“” on.=“”>></what></p>
<p>I would like to know this too. I would go one step further and ask, is the home that they are in trouble with their first home or did they trade up in the past 5 or so years. I also want to know how many people who are in trouble bought their house 10-15 years ago and raided the equity for upgrades and non essential stuff. My guess is that ALOT of people fit into this category.</p>
<p>Something was bothering me about this aricle and the above comments clarified it for me. I have no idea how the foreclosures break down but I do know that it’s easier to wind up in trouble than people think. This article reinforces the idea that it’s only bad choices that can land a person in a mess.</p>
<p>We’ve never been financially wreckless. However, we had to move due to H’s job in a soft housing market, so we hired a property management company to rent out our house/ manage it. Then after 3 years of being model tenants, unknown to us, the wife left and the husband lost his job due to addiction problems. He and his druggie friends spent the last two months in a drug induced haze and destroyed our house. </p>
<p>My H spent every single day of his leave before being deployed to Iraq with some very, very good friends of ours stripping the house down (all carpet/flooring except tile in Kitchen;drywall in most of house from groud upto 3 feet, etc.) and putting it back together. I still get choked up thinking of the friends who drove or flew in, taking their vacation time to help us. In between paying for all the damage and selling the house at a loss anyway, we lost nearly every penny we had saved for 12 years. </p>
<p>Previous to this we had spent down our savings several thousand dollars for unpaid medical expenses. It was a quick and harsh reversal of fortune. To this day I sometimes find my mind wandering to the “what ifs” and I still believe we did the best we could with things that were not under our control. </p>
<p>The tentants disappeared and, through a completely unrelated incident, the rental company went out of business. I was unwilling to now go into debt for lawsuits we might not win or win but never see a dime from. </p>
<p>We thought we’d just had tremendously bad luck but over the years I have met so many people who have similar stories. Either renters or mold or something else that they could not have predicited. Most of them did what we did, a few of them walked away and let the bank foreclose. I cannot tell you how painful it was to spend our savings that way and I thought of letting the bank foreclose. </p>
<p>That’s my long-winded way of saying that as tempting as it is I don’t judge people who wind up in financial trouble. With the detail provided in this article, I admit to feeling somewhat judgemental but even so, it’s truly shocking when things start going so badly and it usually does take some time to accept what is going on and correct course. I suppose we were lucky that my H’s deployment to Iraq forced us to face reality ASAP… but it sure didn’t feel lucky at the time.</p>
<p>I agree with everything you say, pugmadkate, about how reversals of fortune can happen. I’ve lived it. But these people needed to stop paying for cable TV, beach houses, pricey clothing, and “the best” produce and exotic cheeses a long time ago. </p>
<p>BTW, since when is there something wrong with being a size 12?</p>
<p>I’ve lived it too. Lost my job 2 weeks after giving birth to my son(no severance pay). I was never married to his dad and got no child support, was out of work for 18 months (I made $270 in 1990 must have been a last disability check from maternity leave). It took until 1996 to get back to salary level from 1989. I qualified for food stamps while working full time.</p>
<p>Yet somehow I survived w/o being in debt. I didn’t own a house at the time and the fact that I was a saver before losing my job helped me pay all bills on time. 15 years ago I was making 20K. My son didn’t have new clothing or toys for the first 5-7 YEARS of his life.</p>
<p>consolation, I agree with the cable tv, etc. </p>
<p>I guess I’m just trying to articulate that finances are not exempt from denial and denial is a bad place to be making decisions from. I thought he articulated well the two roles that couples tend to fall into; one is full blow stress mode and the other in denial. I think those two roles working together make it all much worse.</p>
<p>In fact, the more I think about it, I really do think we were kind of lucky that things happened to us when they did. No time to be in denial, no time to make emotion driven decisions. But if I’m truthful, if we’d not been on such a tight timeline, I can see myself trying to “buy time” with wishful thinking and the like. </p>
<p>One of the best pieces of financial advice we ever got was to look at our budget and decide how much we could afford to spend on mortgage payments before going to the bank. When we saw how much the approved us for, we were shocked. And that was years ago, before these mortgage schemes. </p>
<p>Of course, the author is an economist of some kind. I suppose it shows how knowing the uncomfortable facts of ones finances and dealing with them head-on are two different things.</p>