With interest rates climbing, a new form of one-upmanship is making the rounds: the mortgage-rate humble brag.
Credit…Jonathan Carlson
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Aug. 4, 2023
At a rooftop party on a steamy July night in Philadelphia, the margarita machine was churning, the seafood boil was hearty, and the conversation turned to the default of the upwardly mobile: real estate.
Almost anyone shopping for a home in the 2020s knows the script by now: Someone mentions their recent home purchase, a tale undoubtedly rich with drama, stress and suspense. Guests, well schooled in the volatility of the housing market, lean in for the follow-up: When did you buy?
The response to that key question “is normally followed by an ‘Oooh,’” said Evan Barker, 36, a lawyer who attended the party and has participated in enough of these exchanges to know that the “Oooh” means one of two things: You either got the interest rate of a lifetime, or you squarely did not.
the 30-year mortgage rate bottomed out at 2.65 percent, a few months before Mr. Barker and Ms. Gallagher refinanced, besting the national average with a rate of 2.375 percent.
smug, shocked or hopeless, depending on where you fall on the spectrum.
“There is almost a cross-generational envy,” said Övül Sezer, an assistant professor of management and organizations at Cornell University, who studies humble bragging.
Flaunting wealth and good fortune is nothing new. But Americans, for the most part, avoid sharing specifics about money. Sure, you’ll plaster news about your promotion on Facebook and on the platform formerly known as Twitter, but you’ll probably keep mum about the salary package that comes with it. When it comes to real estate, the attitude is no different. A gleeful homeowner may gloat about vanquishing the competition in a bidding war, but they won’t mention the sale price, or their monthly payments.
Federal Reserve’s continued efforts to wrestle inflation under control. So timing, not skill, dictates the rate — and timing is a byproduct of luck.
The pandemic exacerbated inequalities that existed before 2020. For many wealthier Americans, the pandemic was a financial boon. They kept their jobs, were able to work remotely, enjoyed bonuses and raises, and had cash on hand when interest rates plummeted to keep the economy afloat. They were the ones best positioned to pluck up homes, driving up prices. The people who spent 2020 and 2021 struggling through job losses, illnesses or other financial hardships likely missed out on the moment, and are now the ones enduring the hard consequences of rampant inflation.
The interest rate cut “was this free handout to people who didn’t really need it,” said Daryl Fairweather, the chief economist at Redfin. For everyone else, “that door closed as soon as people started to get back on their feet.”
Or as Sharon Reshef, who last month bought a $400,000 one-bedroom apartment in Washington D.C., put it: “It’s really hard to plan your life around macroeconomics.”
That hasn’t stopped some of her slightly older colleagues in Senator Kirsten Gillibrand’s office from teasing her about her 6.625 percent interest rate.
“It’s just a gentle ribbing,” said Ms. Reshef, 30, the research director for the senator from New York, who now spends half of her take-home pay on her mortgage. “But as long as we’re here, I will say that not a lot of people in my cohort own property, especially as a single person. Regardless of the interest rate, I have that one up on them. I can definitely brag.”
the experience miserable. But buyers today face similar, if not tougher, conditions. Inventory is anemic, partly because homeowners do not want to part with their low interest rates. So far, a scant 1 percent of American homes have traded hands this year, the lowest rate in a decade, according to a July report from Redfin.
Of course, things could be worse. In 1981, mortgage rates peaked at a jaw-dropping 18.53 percent. Still, the average home price in the second quarter of 1981 was $84,300 — even adjusted for inflation, that’s about $287,020, which is far less than the average price of $495,100 in the second quarter of 2023.
But people who remember the days of double-digit interest rates are often quick to remind younger generations that they, too, walked to school uphill both ways in the snow.
“The fate, the gods, determine when you enter that phase of your life and what is happening in the market,” said Allen J. Palmer, 85, who is retired from IBM and bought his house in what is now Silicon Valley, in California, in 1977 for $95,000 (or $480,686 in today’s dollars), with an 8.5 percent mortgage interest rate. The first year he and his wife spent in that house, they couldn’t afford to fly home to Milwaukee for the holidays.
Young buyers “don’t understand that this is the way it is,” he said. “They probably don’t remember that their parents struggled to pay” the mortgage, too.
recent TikTok video, Barbara Corcoran, the 74-year-old real estate mogul, arranged fresh flowers as she chided hesitant buyers for their reluctance to get back into the market — a common refrain among real estate agents, who insist that there is no time like the present to buy a house.
“Pick your poison: high interest rates now, which aren’t so high, or super-high prices once they come down,” Ms. Corcoran said, her hand grazing a fern frond. “Your choice.”
Mr. Decker, in Montclair, knows which choice he thinks buyers should make. Recently, he was standing at the bar of a local barbecue restaurant and overheard another patron who seemed overconfident about a recent lowball offer he had made on a house in town. Mr. Decker had lost enough bidding wars to know how this story would end, and considered schooling him on his grim prospects. Maybe he would lean across the bar, he thought, and say, “Don’t even bother, man, cool your heels somewhere else.” But he hesitated.
“It did make me feel a little good,” he said, “and certainly thankful that I have a place to live and I’m not dealing with that right now.”
Instead of offering unsolicited advice, he ordered a Pabst Blue Ribbon and a shot of Jameson, and walked back to the patio to sit down and enjoy the evening with his family in their new town.
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Ronda Kaysen is a real estate reporter, based in New York. She is the co-author of “The New York Times Right at Home: How to Buy, Decorate, Organize and Maintain Your Space.” More about Ronda Kaysen
A version of this article appears in print on , Section RE, Page 8 of the New York edition with the headline: Mortgage-Rate Envy? You’re Not Alone.. Order Reprints | Today’s Paper | Subscribe
The 2023 Women’s World Cup may be wrapping up in a few weeks, but there’s still plenty of soccer to enjoy in the U.S. throughout the fall.
If you’re looking for cost-effective entertainment, attending a soccer match can be an affordable blast, offering the bright lights, concessions and high-octane moments you’d expect from other major league sporting events, often at a lower cost. That’s the case for both men’s and women’s games — but you could probably guess which ones are cheaper.
Men’s soccer games typically cost more than twice as much as women’s
On the resale markets, men’s soccer tickets are always pricier than women’s tickets. Like, a lot pricier.
First, a primer. The U.S. has two professional soccer leagues: the National Women’s Soccer League (NWSL) and the Major League Soccer (MLS), which is the U.S. league for men’s soccer.
To get a broad sense of what fans can expect to spend on MLS or NWSL tickets, consider data from SeatGeek, a ticket resale marketplace that has calculated average ticket costs for teams’ events.
Among tickets listed for resale on SeatGeek, MLS tickets cost an average of $50, while NWSL tickets cost an average of $23. Put another way: On SeatGeek, women’s soccer tickets cost less than half the price for a ticket to a men’s game.
And city to city, the gulfs between ticket costs range dramatically.
The starkest discrepancy is in Houston, where Houston Dash NWSL tickets average $15, and Houston Dynamo MLS tickets average $45 — three times as much.
Tickets to men’s and women’s games are the most closely priced in Washington, DC., with tickets to the Washington Spirit NWSL matches averaging $29, and those of the D.C. United MLS team, at $42, per SeatGeek.
The value of attending a women’s soccer game
So yes, across the board, tickets to NWSL matches are significantly cheaper than tickets to MLS matches — a disappointing byproduct of systemic discrimination in sports, but an excellent reason to put your entertainment dollars toward women’s soccer games.
And chances are, your local women’s team has some of the best professional soccer players on the planet.That’s because NWSL players also make up the U.S. Women’s National Team (USWNT) — you know, arguably the best women’s soccer team in the world.
The U.S. Women’s National Team has won four of the eight FIFA Women’s World Cups that have been held. Meanwhile, the U.S. Men’s National Team (USMNT) hasn’t won any of the 22 FIFA World Cups held since 1930. The women’s team has won four Olympic gold medals, while the men’s team has nabbed one Olympic medal since 1904 — bronze, in 2000.
Americans seem to be catching on to the hype. The NWSL is growing explosively as attitudes around women’s sports continue to evolve. Attendance skyrocketed 80% year over year in 2022, and revenue from ticket sales swelled more than 125%, according to CNBC.
Attending a NWSL match means supporting the league — and watching world-class players — for a relatively low cost.
“The rocket fuel behind the growth of any sport league is attendance,” Jessica Berman, commissioner of the National Women’s Soccer League, told ESPN in 2022.
Where to watch soccer
Catch a women’s soccer game if you live near one of the 12 U.S. cities with NWSL teams: Cary, North Carolina; Chicago (technically Bridgeview, Illinois); Houston; Kansas City, Kansas; Los Angeles; Louisville, Kentucky; Harrison, New Jersey (in the New York area); Orlando, Florida; Portland, Oregon; San Diego; Seattle and Washington, D.C.
If attending isn’t feasible, you can watch U.S. soccer matches on streaming services like Fubo, a streamer focused on live sports.
The 2023 Women’s World Cup concludes on Aug. 20, and all of its matches will be streamed on the Fox Sports app, through certain cable providers. Alternatively, Fubo, YouTube TV or Sling TV subscriptions may be your best move. For details, read up on how to watch the Women’s World Cup.
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“They feel great and absorb [water] like a bounty towel”
After a long day, there’s nothing better than getting out of a hot shower or relaxing bath with a plush towel to wrap yourself in. Towels, like bedsheets, are essential to everyday life, so investing in a set of quality bath towels that can live up to the task is worth it.
If you’re looking for a new set to add to your towel collection check out the Belizzi Home 8-Piece Bath Towel Set, which is on sale at Amazon for $30 — that’s just $4 apiece. The set will instantly add a new feel to your bathroom, as it includes two oversized bath towels measuring 27 by 54 inches, two hand towels, and four wash clothes. Each piece is made from ring-spun cotton that is absorbent and soft to the touch, according to shoppers. Also worth noting, the towels have a double-stitched hem, which gives them a nice appearance, strengthens the fabric, and prevents fraying over time.
The quick-drying linens are available in 20 colors, including neutrals, pastels, and bright hues such as white, turquoise, and coral orange, and every color is discounted right now, so at least one option is sure to match your bathroom’s decor.
Belizzi Home 8-Piece Bath Towel Set in White, $30 (Save $20)
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Related: The 7 Best Turkish Towels of 2023, According to Textile Experts and Our Tests
To take care of the towels properly, wash them separately in cold water and tumble dry them on a low heat setting. The brand also recommends washing the towels before first use. Over 5,000 Amazon shoppers have given these bath towels a five-star rating, with some leaving reviews that highlight how “fluffy and durable” the towels that “are great after a shower” really are.
“The quality and fabric are great, and I have had zero issues. I washed them as soon as I received them, and they have been washed several dozen times since and hold up well,” shared one reviewer. They added that the color of the towels “is still rich and vibrant” and there was no shrinkage.
Another reviewer stated the towels are “super soft and they dry so quickly”, while a final five-star reviewer wrote, “These remind me of nice hotel towels. They feel great and absorb [water] like a bounty towel!”
The brand’s 6-Piece Bath Towel Set is also on sale. The popular set comes with two oversized bath towels measuring 28 by 55 inches, two hand towels, and two washcloths. Prices vary by color, but you can snap up a set for as little as $18.
Related: The 8 Best Shower Heads of 2023, Tested and Reviewed
Ready to refresh your bathroom? There’s no end date listed for this sale, so head to Amazon to shop the Belizzi Home 8-Piece Bath Towel Set now.
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With a fairly reasonable cost of living, a strong economy and plenty to do outdoors, Idaho is one of those picturesque places in the U.S. that draws people in. You won’t find prettier surroundings than in the Gem State, and that includes all that Yellowstone National Park has to offer.
Friendly locals and a low crime rate are like the icing on the cake for why Idaho is worth considering when looking for a new place to live. However, even though you’ve picked your preferred state, you have to make sure you can afford it.
Looking at the cost of living in Idaho by breaking expenses down into specific categories can make it much easier to check in with your budget. Here’s where to expand your investigation:
Idaho housing prices
Throughout Idaho, housing prices hit both the affordable and more expensive ends of the line. This could mean, on average, housing is more accessible, but it could also remove some of the best places to live in Idaho from the running. The best strategy — find a few ideal neighborhoods and start comparison shopping.
Boise
On the flip side, Boise is one of the more expensive cities to live in Idaho. Here, housing prices are 26.6 percent above the national average. Costs are higher in the state capital, most likely due to all the big-city conveniences. This includes the Boise River Greenbelt, the capitol building itself and all the great skiing spots that open up come winter.
Although rent throughout Boise is either holding steady or decreasing, apartments are still going to cost you. A one-bedroom apartment has an average rent of $1,445, down 4 percent from last year. Two-bedroom apartments went down in price by 5 percent for an average monthly rent of $1,659.
Home prices are behaving a little differently, seeing significant increases. The median sale price in Boise is $522,500, up 4.9 percent over last year.
Twin Falls
To say that Twin Falls is a gorgeous spot in Idaho is definitely not exaggerated. Situated along the Snake River, this city is affordable, beautiful and stuffed with places to hike and camp. Housing prices here are 15.8 percent below the national average.
The average two-bedroom apartment rents for $1,565, up a staggering 57 percent from last year. Hopefully, that comes with a lot of great amenities.
For those interested in home shopping, house prices are up 18.7 percent over last year. The median home price in Twin Falls is $362,000.
Idaho food prices
You may assume Idaho is famous for its potatoes, but culinary favorites extend way beyond this tuber. The state is also known for its freshly caught trout, home-grown huckleberries and succulent morel mushrooms. You could make a full meal just from Idaho staples. Locals get this, spending an average of between $267 and $300 per month on groceries.
You’ll easily be able to fill your grocery cart with this shopping budget given that both Idaho cities on our list come in under the national average.
Twin Falls is 6.2 percent below the national average
Boise is 2.7 percent below the national average
You’ll see the savings when it comes time to actually shop. Specific grocery items like eggs, bread and, yes, potatoes are all relatively low-cost and close in price between Idaho cities. A dozen eggs in Boise is $1.29 and $1.42 in Twin Falls. Potatoes are $2.06 in Boise and $2.77 in Twin Falls. Bread is $3.27 in Twin Falls and $3.76 in Boise.
Idaho utility prices
Paying for utilities in Idaho is one of your lowest cost of living components. Both cities are significantly below the national average, which means your energy bill, water bill, gas bill and internet isn’t too bad.
Boise is 18.5 percent below the national average
Twin Falls is 7.9 percent below the national average
Average energy bills stay pretty consistent too, right around $128 per month no matter where you live.
When it comes to energy sources, Idaho produces a large amount of its energy through hydropower. This renewable source of electricity comes from Idaho’s many rivers. There are 114 hydropower facilities in Idaho, with some of the biggest including Hells Canyon, Brownlee and Oxbow.
Idaho transportation prices
Idaho is a big state, and having a car really is essential if you want to get around. That said, for travel within a smaller area, you can rely on public transportation. If you’re not going too far, you may even be able to get around by bike. Both Boise and Twin Falls are bike-friendly cities with bike scores of 67 and 50, respectively.
Totaling up all transportation costs:
Twin Falls is 8.4 percent above the national average
Boise is 11.9 percent above the national average
This is the only contributor to the cost of living in Idaho where every city is above the national average. To save a little money, it’s beneficial to leave the car at home (no paying for parking) and look into public transportation options.
Boise Valley Regional Transit
Consisting of bus routes in Ada and Canyon counties, with a few inter-county routes, too, Valley Regional Transit is a pretty robust system. There’s also a Boise State University shuttle to help college students get around.
A one-way fare is $1.50, but you can purchase a day, month or yearly pass to make traveling easier. An all-day pass is a deal at $2.50. Monthly passes, good for 31 days, are $42, and a yearly pass is $282.
Great Falls Trans IV
An unconventional form of public transportation, Trans IV Bus Service is an on-demand service that operates during the day throughout Twin Falls. You can schedule a pick-up the day before, and buses run Monday-Friday.
What’s unique about this service is that although it’s for use by all residents, it’s run by the College of Southern Idaho. Most public transportation systems fall under the jurisdiction of the city they run in instead.
Idaho healthcare prices
When it comes to your health, there’s nothing you wouldn’t do, but that doesn’t mean you’re not worried about what the bill will look like. Cities in Idaho offer a variety of price points when it comes to healthcare, with some slightly above the national average, and others a ways below.
Twin Falls is 11.1 percent below the national average
Boise is 2.2 percent above the national average
This variation in overall pricing puts Twin Falls below Boise when it comes to most medical visits. The only time you’ll pay more in Twin Falls is when you visit the dentist. In Boise, the average dentist visit is $84.70, but in Twin Falls it is $91. Going to see your general practitioner, or even the eye doctor, means paying more in Boise by at least $20, although doctor’s visits are over $53 more.
Idaho goods and services prices
Goods and services, all the bonus items you want but don’t need, round out a monthly budget. These are the fun things you do with friends or how you treat yourself after a long week. They’ll feel essential, but if you had to cut back for any reason, it would be okay. In Idaho, this category in your cost of living is pretty close to average.
Twin Falls is 8 percent below the national average
Boise is 6.2 percent above the national average
Although these averages may not feel that close together, they’re close enough. It means Twin Falls won’t always have the lower price when it comes to common goods and services, and that to really get a feeling for what your budget would look like, it’s best to price certain things out.
A pizza is over a dollar more in Boise, but a haircut is over six dollars cheaper. A movie ticket is almost $1.50 more in Twin Falls, but a bottle of wine is over four dollars less. The give and take of individual pricing when it comes to goods and services makes it hard to really know how your wants will impact your budget unless you get specific.
Taxes in Idaho
When it comes to personal income tax, Idaho has a graduated rate. You pay based on your income anywhere from 1 to 6.5 percent.
The statewide sales tax rate is 6 percent, with an additional maximum of 3 percent localities can add on if they want. Not everywhere takes advantage of this total, though. The average combined sales tax across Idaho is only 6.02 percent. At this rate, for every $1,000 you spend shopping, you’re only paying $60.20 in taxes.
Neither Boise nor Twin Falls adds any additional local sales tax to the required state percentage. As a result, both cities have a 6 percent sales tax rate.
How much do I need to earn to live in Idaho?
It’s always best to start with whether you can afford rent when thinking about living in a specific place. The cost of living in Idaho isn’t too high, but the average rent is $1,756, which isn’t too low. Considering you should put around 30 percent of your annual income toward rent, you’d need to pull in a minimum salary of $70,240.
This is a sizable income, significantly above the median household income for the state, which is $58,915. Although average rent and average income don’t match up, it doesn’t in any way rule out how Idaho living can work for you. The best way to really understand what you can and can’t afford, and how realistic it would be to find an apartment within your budget, is to use our rent calculator.
Living in Idaho
Natural beauty combined with friendly residents, a growing economy and a reasonable cost of living make Idaho a great place to consider calling home. You can enjoy the amenities of city living during the week and experience nature at its best on the weekends. It’s a winning combination, but to get to Idaho, you first have to make sure it fits into your budget. Comparing what you can afford against the average costs around the state can really help figure this out, so grab a pencil, paper and a calculator.
The Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of August 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.
Although it costs more money upfront to build net-zero homes than it does with ones that aren’t so energy-efficiency, homeowners in the long term can enjoy substantial savings.
Those savings are so huge in fact, that eventually they’ll pay for the home itself, and it doesn’t matter where you live either, according to a new study.
Net-zero energy homes are those that generate enough energy through environmentally friendly means as they use. They usually comes with features such as solar panels on the roof, energy-efficient appliances and insulation, triple pane windows, LED lights and smart thermostats. Other important things such as natural lighting are also taken into account. This could mean positioning windows or overhangs more strategically so as to provide more solar heating or shade, depending on the climate.
Now, a new study from the Rocky Mountain Institute, which is a research nonprofit group that’s focused on clean energy, shows just how long it takes for a typical net-zero energy home’s savings to pay off its cost. The following graphic shows how long it takes in 30 U.S. cities.
As the graphic illustrates, the cost of building a zero-energy home varies an awful lot depending on where it is. More savings tend to be had in areas with higher electricity rates and older building codes, the study found.
“Zero-energy homes are actually affordable,” Jacob Corvidae, principal at the Rocky Mountain Institute, told InsideClimate News. He said this is important to stress, as many consumers, and also some builders and policymakers, have a perception that zero-energy homes aren’t affordable.
The upfront costs may be more, but in a place such as Detroit, which is known for its fairly cold and miserable climate, it’s possible to save enough to pay off a zero-energy home in full in under ten years.
According to Rocky Mountain, a 2,200 sq. ft. zero-energy home in Detroit costs around $20,000 more to build than one that doesn’t have any standard efficiency or solar power. However that home would also save $2,500 in energy bills within the first 12 months, and each year thereafter. That means it would take just 9 years for those savings to cover the cost of building the home.
The study authors hope that more awareness of the potential savings a zero-energy home can provide will boost their popularity. And the trend seems to be accelerating anyhow. Well known home builders such as Meritage Homes PulteGroup are already beginning to offer more zero-energy to their customers. Another builder, Pearl Homes, is building a zero-energy community in Cortez, Florida, that comes with electric vehicle chargers and energy storage facilities.
“We’re starting to see the tip of that iceberg, and when it really hits, it’s going to be huge,” said Ann Edminster, a consultant and architect who works with the Net-Zero Energy Coalition.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
Just down the street from my family’s Venice home, workers are smoothing plaster inside a 6,000-square-foot new house whose owners, a young couple from the Bay Area, will soon have a property worth $7 million.
Across from that mansion-to-be is an 11-unit apartment building whose cracked stucco could use a new coat of its mustard-colored paint. The families that live there come mostly from Oaxaca, Mexico, and many of the adults work as employees at restaurants in Venice and Marina del Rey.
Los Angeles is a city historically segregated by race and class. But in our slice of the city, multimillionaires in newly built villas live side by side with the affordable apartments of the people who clean their pools, watch their children and cook their El Pollo Loco orders.
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My family’s neighborhood may be an outlier — or moving inexorably toward full gentrification — but at least for the last three decades, it has also served as vibrant proof that the notion that affordable housing lowers property values is overblown, if not flat-out wrong.
That enduring belief has contributed to widespread not-in-my-backyard opposition that makes building affordable housing in higher-income areas so difficult.
“It is total NIMBYism,” said Adlai Wertman of USC’s Marshall School of Business. “It’s ‘I want to help poor people, just not in my neighborhood.’”
Our neighborhood provides plenty of anecdotal evidence that mixing housing and income levels doesn’t sink property values. In a four-block area, low- and moderate-income apartment buildings and multifamily units are sprinkled among six mega-mansions and older, middle-class single-family homes like ours, which was built in 1924. The lower-income units are not government-subsidized.
In the mustard-colored building, Marin Ceja, a self-employed pool technician, pays $2,000 per month for his two-bedroom apartment, more than $3,000 less than the average for a two-bedroom rental in Venice. Assuming Ceja’s across-the-street new neighbors financed their home with 20% down, they’ll be paying $20,000 per month.
The presence of lower-cost multiunit buildings hasn’t driven down the resale value of homes. The average sale price of homes in Venice has increased by a million dollars in the last 10 years. In the last year, while home prices have declined by 7% countywide, in our neighborhood they rose over 4%.
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Numerous studies show our corner of Venice, east of Lincoln Boulevard and north of Venice Boulevard, is not unique. Low-income housing has a positive impact, or no impact, on neighborhood house values, according to a majority of studies reviewed by A-Mark Foundation, the research and policy nonprofit I lead. Two studies concluded that low-income housing had negative effects on property values in some specific cases.
One 10-year study that looked at property values in the least affordable housing markets in the U.S. — 45% of which were in California — found that newly built low-income housing had no effect on state property values.
That’s been the experience of affordable housing builders too. Loren Bloch, who spent decades developing affordable housing in Southern California, told me that when he insisted on building 22 low-income housing units along with 37 market-rate units in Oxnard in 2001, other developers thought he was crazy.
“But people sucked them up,” he said, “and they lived side by side together.”
Oxnard real estate prices around Bloch’s development have risen by double digits since then.
Tom Safran spent four decades convincing wary, lawyered-up residents that mixed neighborhoods work for everyone, so long as the building quality is high.
After finally winning city approval for 154 affordable units in Del Rey on Culver Boulevard, Safran faced off against a handful of neighbors whose lawsuits delayed construction two and a half years, before they settled on 124 units — which more than 1,800 people applied for in 2013.
His company faced similar opposition to his Thatcher Yard development in Venice, despite bringing in Steve Giannetti, who designed Lady Gaga’s Malibu spread, as architect. Residents fought to scale back the project from 160 units to 98, overruling Safran’s contention that as long as valuable Venice land was available, it should house the most diverse kinds of units, and the largest number of them, that was reasonable.
“Communities work best when they have a range of incomes,” Safran told me. “When people who teach school or do policing or work behind the counter in the dry cleaners don’t have to drive an hour and a half, it creates a more successful society.”
In Los Angeles County, home prices have risen twice as much as wages in the last decade, and the lack of affordable housing drives homelessness, poverty, population loss and glaring income inequality. That’s why Gov. Gavin Newsom and L.A. Mayor Karen Bass have both called for every neighborhood, rich, poor or in-between, to accept affordable housing.
But the more upscale the neighborhood, the more resistance there is. Upper-income residents who stand in opposition wield a variety of excuses — increased traffic (Manhattan Beach), overcrowding (Redondo Beach), or potential harm to migrating mountain lions (Woodside, really?).
“We’ll never get affordable housing in the Palisades,” Wertman said of the upscale Democratic-voting neighborhood. “The world will end first.”
Former President Trump, as he often does, said the quiet part out loud in 2020 when he blocked an Obama-era rule intended to reduce racial segregation in communities. “I am happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood,” Trump tweeted at the time.
But even studies looking specifically at “more affluent” neighborhoods have found the fears of affordable housing tanking housing prices and increasing crime are unfounded. A 2022 UC Irvine study found that on average in such areas in Orange County, home values increased following the opening of affordable housing.
“Overall, the data on actual home sales do not support the claim that affordable housing depresses local home values,” the authors concluded.
A 2019 Stanford University study showed that housing built using low-income housing tax credits led to a decrease in crime in lower-income neighborhoods and “does not increase crime in high-income areas.”
The Stanford study, unlike several others, did find that low-income housing built in higher-income neighborhoods decreased property values by 2.5%. That could be a result of increased housing supply, said Gary Painter, professor of social innovation at USC, or of residents preferring not to live near multifamily buildings. No studies have disentangled the impact of these two possibilities, he said.
Back to my neighborhood, where below-market rents mix with high-dollar mortgages and taqueros live beside techies. The diversity is not the product of planning so much as timing and evolution. It would be hard to replicate now, not least because land costs combined with beachside NIMBYism have made Venice a notoriously difficult place to build new housing of any kind. (The total number of housing units permitted now in Venice is half the number permitted in the late 1950s, according to an analysis by Dario Alvarez, president of community planning firm Pacific Urbanism.)
When I described the neighborhood to Painter, he said there’s a term for the older multiunit buildings around single-family homes like mine: naturally occurring affordable housing. As a building reaches the end of its useful life, it has fewer amenities and is less valued in the marketplace and therefore is more affordable.
But the result, at least for as long as we’ve been living here, is a vision of what L.A. neighborhoods could and should be: economically and racially mixed.
Painter said that to get that ideal citywide, “we need to build units in all areas of the city.” And not just more affordable housing, but more housing of all kinds.
“The reason that’s fair is that if we have more units, they are a lot easier to be made affordable. We need housing everywhere,” he said.
The more we build in every neighborhood, the more we’ll open up opportunities for people of all incomes to live together. Contrary to popular belief, if we do that, the world won’t end — your property values won’t even go down.
Rob Eshman is chief executive of the A-Mark Foundation.
You’ve just won $250 million, and it’s been deposited in your bank account. So what are you going to do today? After polling the internet, here are the top-voted responses.
1. Check My Balance About 100 Times
“Check my balance about 100 times,” confessed one. A second admitted, “I’m not going to lie; I’d be checking my account every three minutes.” “With that kind of money, you could hire someone to check your balance as often as you need to feel comfortable,” a third user joked.
2. Disappear
“Disappear. I’d travel the world for a bit and consider the options,” shared one. “It’s the only logical choice. Travel around a bit and let the dust settle. But still, don’t ever go home,” replied another. “That place is hostile territory as soon as you say ‘No’ to any request for money, of which there will be many.”
3. Retain the Services of a Top Lawyer, Accountant, and Financial Advisor
“Retain the services of a top lawyer, accountant, and financial advisor,” said one. “Then hire another top lawyer, accountant, and financial adviser to keep tabs on the first three firms,” a second added. “Hire two accountants you trust but hate each other,” a third tacked on.
4. Tell No One
“Tell no one. Once you have that much money and people know about it, you will be asked constantly for money or favors. You will start to get dirty looks when you go out to dinner because, after all, why wouldn’t the man with millions of dollars pay for the whole thing?”
Your family will tear itself apart. You will be blamed for other people’s lack of money. There’s always a slight undertone of ‘Well – if you could help me out,” and some of your family and friends may be bold enough to say it outright.”
“Anyone you give money to now sees you as a money printer. People who previously looked at you as a human with your own issues now see you as a bank with money they theoretically have access to,” said one.
“There is a reason that winning the big jackpot in the lottery has a such high mortality, drug addiction, and feuds. People with wealth aren’t friends with only other people who have wealth just because it’s fun. It’s their lifestyle. They’re the only people who won’t ask them for money.”
“They’re the only people they can interact with that do not look like puppies begging for scraps. And you’d be surprised just how selfish you will become, given access to the ability to be ahead of everyone else around you. We’re human, after all,” they concluded.
5. Sleep
“Sleep. I would sleep so long and so peacefully. Then I’d tackle business,” one replied. “This was my first thought; having no care in the world, generational wealth, and nothing forced me to wake up. I would sleep well,” agreed another.
6. Text Family and Ask Them for Money
One user suggested, “Do a mass family group text asking them to borrow money. It will buy me valuable time before anyone catches the wind and comes running for cash.” “It would also be a good test of who deserves a gift from Daddy Warbucks,” added another.
However, a third argued, “Not a group text, text them all individually. You’ll get more of an honest answer to how people would act. If somebody walks into a room full of people and asks someone to give them money, I’m not taking them very seriously. If they walk up to me and tell me privately, they need something. I’m much more inclined to help.”
7. Make Timely Acts of Kindness to My Friends and Family
“Tell no one and act normal, but eat a lot better. Pay off my debts quietly and make timely acts of kindness to my friends and family,” shared one. “I like this one a lot. I’d probably add simple acts of kindness to strangers and charity, too,” claimed another.
“Having this much money and people knowing, I feel I’d never be able to trust the sincerity of connections I make. But this is a way to have it and still offer timely help and kindness to others around you! Yes.”
8. Pay off Debts
One person expressed, “I’d Moonwalk out of my job and spend the entire day making sure every cent of any possible debt I have is paid off. Also, letting my dad know all his debt is gone, too, and we’re taking an extended vacation next summer, so start planning.”
A second person agreed, “Same here, pay off my debts first. Then any home repairs I have been putting off, and then discreetly pay off mortgages for specific family members and friends.”
Someone said, “Pay student loans off. Before another joked, “With the $5 leftover, you can probably get some Taco Bell or something.” Finally, the OP responded, “I can get TWO things off the dollar menu at McDonald’s and save the extra dollar for retirement.”
9. Mutual Funds Held in a Trust With a 1% Payout
“After getting a lawyer, accountant, or financial advisor, I’d probably end up putting it all into mutual funds held in a trust that pays me out 1% per year so the principal can grow over time while still giving me more than enough to live on very comfortably,” confessed another.
10. Hire a Team of Professionals To Get Healthy
“Hire a doctor, physical therapist, physical trainer, physiotherapist, nutritionist, masseuse – have them on a weekly home visit schedule for six months until I’m in much better shape and health,” one replied.
“Get a personal chef too. You can pay them $100k a year to do all your shopping (on your dime) and cooking, and I bet you could get a legit chef for that much,” a final user said.
Source: Reddit.
Who is one actress you can never stand watching, no matter their role? After polling the internet, these were the top-voted actresses that people couldn’t stand watching.
10 Actresses People Despise Watching Regardless of Their Role
These 7 Celebrities are Genuinely Good People
We’ve all heard the famous adage that “no publicity is bad publicity,” and while it tends to be accurate, there are certainly exceptions. But what about those few stars who stay out of the limelight and get along without a hint of trouble?
These 7 Celebrities are Genuinely Good People
Have you ever known someone and thought you liked them—until you learned about their hobbies? Then you get to know them and then you’re like, “Wow, red flag.” Well, you’re not alone.
These 10 Activities Are an Immediate Red Flag
Some celebrities definitely seem to enjoy the limelight and keep working to stay in the public eye. While others quickly move out of the spotlight. Many of these actors and actresses stepped out of the spotlight to live a more private life without constant media pressures.
10 Celebrities That Made the Big Times Then Disappeared Off The Face of the Earth
We’ve all been there – sitting through a movie that we can’t help but cringe at, but somehow it still manages to hold a special place in our hearts.
These 10 Terrible Movies Are Still People’s Favorites
Do you ever wish you knew the secrets to attract wealth because your 9 to 5 isn’t paying the bills very well? You’re not alone! Today, we’ll talk about the 11 secret life hacks that rich people are doing to make gaining wealth easier.
We’ve compiled the best answers from Reddit, so you don’t have to do it yourself. Read this blog and shift your mindset with these lessons from the wealthy.
1. Organize Everything
If you’re familiar with Marie Kondo, she specifically emphasizes that organizing and decluttering will have a huge impact our lives. It turns out that’s one of the life hacks of truly rich people.
One person said, “Allow me to ramble passionately about a hack of small consequence. Something I noticed about all the rich people’s houses is they have storage containers everywhere. The pantry isn’t piles of groceries shoved inside, it’s all in tidy bins, often matching, sometimes labeled. Their closets have shelves and drawers, not a single pole to hang items. Under their sinks are multiple bins and containers, sometimes on a pullout shelf/drawer. Their spices are ALL on racks, not just the few that fit in a singular rack with the rest piled on top or haphazardly in an adjacent cabinet.
“Their jewelry is organized like a utensil drawer and not shoved in a single box. There are trays or giant bowls by every entry door to toss your mail and keys instead of cluttering every flat surface. Imagine how much calmer your brain would be if you didn’t have to hunt through what feels like a disorganized garage sale everywhere you turn. You don’t have to bend over to rife through objects, you can bring a bin to you.
“I’m just a povvo, but I started ramping up my organizational game and it’s made a subtle but impactful difference in my daily life. Started with matching-sized Amazon boxes in the pantry and Dollar Tree fabric collapsible boxes for toiletries under the sinks and the closet floors, and built up from there. I’ve been slowly converting all my bathroom and kitchen shelves to pull-out drawers (this one is expensive).”
2. Buying in Bulk
This life hack may not be applicable to every body because, in order to save a lot of money on purchases, particularly groceries, you must have the money to shell out first.
One user shared, “Rich people can afford to save money on purchases if they want. I guess if you are rich and don’t care about saving $ it doesn’t apply to you, but it’s definitely a big benefit if you’re a frugal rich person. If that makes sense. A small tiny example. Most would categorize me as wealthy. I buy high-end groceries but aim to do it for as cheap as possible. When our Whole Foods has a sale on our favorite frozen pizzas, normally $12.99 and on sale for $7.99, I buy 10 of them and load up my deep freezer. The fact that I was able to save $50 is only possible because 1) I have enough money to shell out $80 for the upfront cost on the pizzas, and 2) I have a deep freezer to store it in. Neither of those things would be possible without money.”
3. Semi-Permanent Cosmetics
Beauty, in whatever form, is expensive—and only the rich don’t think twice about spending such a huge amount on beautifying themselves or their surroundings.
“…I think a lot of beauty at that level is faked, just like the lawns are faked. Spray tans, teeth caps, really expensive hair extensions and plugs, professional makeup, tailoring, even surgery, etc. etc. I was shocked when I learned about caps for teeth. I didn’t even know that was a thing. Feels like a total cheat code. Can even avoid the expense and discomfort of braces. There are a lot of beauty ‘hacks’ that are not accessible unless you have $$$,” someone shared.
4. Hacking Expensive Purchases
One person commented, “I’ve worked for a rich family and learned a couple hacks. Everyone else is correct. They just hire things out. If you’re genuinely curious, then I’ll share two things I learned in my job that are specific to the wealthy lifestyle. First, moths love real cashmere so you have to keep cedar in your closets to keep them away from eating your sweaters. Second, if you are flying private and only medium-wealthy not truly a fan of throwing money down the drain unnecessarily, it is actually more affordable to ship your luggage via UPS than pay for the additional fuel it will take to carry it in the plane with you.”
Another one shared, “I knew a lady who was, let’s just say she was in a different tax bracket. She and her late husband never took a road trip. They flew everywhere. He was a pilot, and they owned their own plane. They would fly somewhere, and if she ran out of clean clothes, she would just buy more. She’d ship her dirty clothes back home, and the maid would have everything dry-cleaned by the time the lady got back. I can’t imagine how many clothes this lady had. Or maybe she donated them on a regular basis?”
5. Networking
We’re familiar with networking, but it really is one of the life hacks that truly rich people are doing. They leverage the people they know who are also rich and powerful, and that’s what makes them too.
One person shared, “Networking. Powerful people have a large network of connections to get what they want. If you aren’t going out of your way to build ties with people who have things you want like wealth or power, the alternative is working very hard and hoping you get noticed—which doesn’t work most of the time because, unfortunately, the meritocracy is a lie. Learn to meet people and maintain professional connections, not just friendships. And no modesty, that’s a killer.”
The second person replied, “The best network—Politicians, Thieves, Police, Money Laundering—Mafia. Exist all around.”
6. Know What’s Worth Your Time
“When you are good at what you do to make money, you hire pros to do things that you need and get them properly done. That’s classic economics of the division of labor. You focus on what you do well and make more money. That’s the opposite of downward spiral. The concrete example is that I unblock my toilets and fix leaks. I also change my engine oil. Because it’s cheaper for me to do it. If my pay rate is higher than the pros, if course I’ll hire someone. That saves me money,” one person said.
“Sure… but I kind of hate how many people try to apply this to a typical salary worker. No one is gonna pay me to work overtime on a Saturday at my hourly rate (and I don’t want to), and it’s easier to work on a house project for a few hours than find a 2nd job. Many people point to your example, but they either don’t have time for projects cause they work 60 hours a week or prefer to use their disposable income and do something else with their free time. They are not financial wizards, they just make other choices based on circumstances, and that is fine,” argued another commenter.
Another user added, “Yeah, not every minute of my day is monetize-able. Someone once said Bill Gates is so rich that he loses money if he stops to pick up a penny in the street. No, he doesn’t. He didn’t cease to earn money for doing it. Rich people hire others to change their oil because it gives them back time for leisure.”
7. Buy Quality the First Time
One person said, “I was taught to always buy the best of anything I can the first time so I don’t waste my time, money, or efforts on junk. That bled over into everything. Relationships. Experiences. It becomes a mindset and lifestyle. I think that’s what you’re seeing when you look at that neighborhood.”
Another one replied, “This right here. If you want to buy a new piece of furniture, TV, car, etc… Buy nice things and buy quality. It’ll last for years and years. Also, pay cash. Don’t bother financing it. That’s just more wasted money.”
Another user quipped, “Buy once, cry once.”
8. Weigh your Options
“Not really a hack but spending dollars so they count. If there’s a gym that’s $50 a month but is 20 mins away and they’ll only go once a week, and there’s one 2 mins away that’s $200 but they’ll go every day, spend the extra money. The $50 option is a waste. This can be applied in many circumstances,” one person shared.
9. Elegant Appearance
One person shared their experience while working with truly rich people, “A few things I’ve noticed when working for wealthy people. They look rich even in casual clothes because they get everything tailored, even simple white shirts and jeans so they look expensive even when they aren’t.
“A lot of accessories like shoes, bags and jewelry are custom made which can be a better option if you’re going to spend a lot on designer brands anyway, and they will be unique. They don’t just go to the gym, they have a personal trainer who focuses on that toned without being too muscular look, so they look naturally hot without trying.
“Getting blow dry right before an event makes you look polished. I worked for a woman who never washed her own hair, and she always looked amazing. I saw people spend a lot of money on wardrobe staples like jackets and classics, but they would only buy high street seasonal pieces to keep them in style.
“They sell designer pieces to concession stores after wearing them a few times and basically get 50-80% of the cost back depending on the designer. Having lunch at a Michelin-star restaraunt can be slightly more affordable than dinner but you still get the experience. Having drinks at the restaurant bar so you can be ‘seen’ and mingle but don’t have to buy dinner. Going to clubs and events on weekdays means you are more likely to get in, get a table/ticket and it can be less expensive.”
10. Excellent “Talkers”
One person shared, “When I was doing my first startup I saw ‘new money’ people. In school I saw ‘old money’ people. There are all types of rich people and these types have their own ways. They do live in the same areas though. They recognize each other by their watch, type of clothes and behavior. And you can see if they are new rich, old rich, dem or rep by these things too. Their kids go to an endless amount of extracurricular activities. Here it is hockey and tennis, sometimes baseball. The parents do it so their kids build their network (I mean 5year olds).
“Rich people have some skills, but the main skill is talking. They are great at talking. It used to put me off. So and so became the director of yadayada. Why? The only thing he can do is talk. And that is precisely the point. They don’t get so stressed. They just talk for a living. Everything comes from their network. People like listening to their stories. But they cannot do anything of value other than talking. They hire people for that. Duh. Don’t be apologetic. Don’t do stuff worth 10$ an hour if you can make more. Do lots of self-care. And be a professional talker. Listen to people, look at their behavior and clothing, and copy that in your own way.”
Someone added, “I agree with this comment but will extend it further. You call it ‘just talking’ to anyone that will listen, but what they really are doing is ‘selling.’ They are selling their latest ideas, pitches, schemes, problems, solutions, whatever, etc. And their audience (other rich people) love to talk too, so the audience then adds on to those ideas, sometimes with money or introductions to other people with money. And it snowballs because of the network effect.”
11. Etiquette and Mannerisms
“You have a lot of time for personal maintenance and improvement if you don’t have to worry about cooking dinner or doing laundry. Some things, like good etiquette, are made very important from a very young age (hence the napkin folding, knowing what course to use which fork, how to properly address folks in a formal setting, etc) it’s a social code that helps identify who is and who isn’t,” one person stated.
Another one added in agreement, “Exactly. It’s very subtle and says a great deal.”
Source: Reddit.
Who is one actress you can never stand watching, no matter their role? After polling the internet, these were the top-voted actresses that people couldn’t stand watching.
10 Actresses People Despise Watching Regardless of Their Role
These 7 Celebrities are Genuinely Good People
We’ve all heard the famous adage that “no publicity is bad publicity,” and while it tends to be accurate, there are certainly exceptions. But what about those few stars who stay out of the limelight and get along without a hint of trouble?
These 7 Celebrities are Genuinely Good People
Have you ever known someone and thought you liked them—until you learned about their hobbies? Then you get to know them and then you’re like, “Wow, red flag.” Well, you’re not alone.
These 10 Activities Are an Immediate Red Flag
Some celebrities definitely seem to enjoy the limelight and keep working to stay in the public eye. While others quickly move out of the spotlight. Many of these actors and actresses stepped out of the spotlight to live a more private life without constant media pressures.
10 Celebrities That Made the Big Times Then Disappeared Off The Face of the Earth
We’ve all been there – sitting through a movie that we can’t help but cringe at, but somehow it still manages to hold a special place in our hearts.
These 10 Terrible Movies Are Still People’s Favorites
Robert Kiyosaki, Robert Allen, and Loral Langemeier would have you believe that in order to get rich all you need to do is throw your money into real estate, sit back, and let the profits come. It’s not that simple. There’s risk involved. You have to know what you’re doing.
Jon forwarded a link to what he calls “a personal finance trainwreck”. He writes: “If this guy is for real (and there appears to be some suspicion about that) then, wow. Unbelievable.” Casey at iamfacingforeclosure.com thought he could make a killing at real estate. He wanted to reach Financial Independence quickly.
I’m a 24-year-old aspiring real estate investor from Sacramento, California. After going to few seminars I bought eight houses in eight months across four states with no money down. I fixed and sold two and then ran out of cash. I am now facing foreclosure on six five houses. I’m learning my lessons, finding solutions and blogging about it.
Casey’s story is fascinating. Here’s a young man who read Kiyosaki and Allen, and who is trying to find riches by following their advice. He’s trying to make money quickly, and is struggling, but is willing to share the gory details. In one entry, Casey writes that he and his wife are running out of money. They’ve been living on credit cards, which are now maxed out. He’s afraid he might have to get a job.
I can’t just do a job. I do not want to give up my dream of financial independence. If I get a full-time job, I will continue doing my business and investing on the side. Finding time to do both will be hard (tried it before many times). If I must do that, I will. But it will probably take much longer to reach my goals.
An hourly job has limited earnings potential. Getting a 3% raise every year is not my idea of upwardly mobile. Making $25/hour writing code seems like a waste of time when I can sell a real estate contract for $5,000 after doing 5 hours of work = that’s $1000/hour!
So if I can work really hard for one month and find just 2 deals, I can make $10,000. That’s much better return on my time.
Casey received many responses (the comments are the best part of the site), some helpful, some angry, some flabbergasted. Some are all of these at once.
You’ve just nailed the difference between fantasy and reality. […] You are in the process of learning the difference between GAMBLING and INVESTING. Everything you’ve done so far has been gambling. Investing requires that one balance the risk with the rewards, diversify, and be dedicated. Some investments will fail, but a wise investor won’t have too much tied up in any single thing (like real estate purchased on a guru-drunken binge). Investments are made with money that one could stand to lose. Investing is not done by leveraging oneself up to the eyeballs and beyond, hoping for a miracle.
You can see television interviews with Casey (choose “House Flipper Part One” or “House Flipper Part Two” from the menu in the middle of the page). His story is also featured in two articles from the San Francisco Chronicle:
Langemeier, Kiyosaki, and Allen are inspirational. Some of their ideas may even be useful. (Prlinkbiz — who I’m sure will have something to say about this entry — is a huge Kiyosaki fan, and seems to be making his principles work for her.) But these folks preach that their methods are sure-fire ways to wealth and success. They overpromise in an attempt to sell books and seminars. Langemeier says she’s created 200 millionaires, and that she can make one out of anybody. Yet I can find no independent evidence that this has occurred. I’m not saying that it hasn’t happened, but I’m skeptical.
The only sure-fire way to wealth and success is to spend less than you earn, to save the difference, and to invest that savings for growth.
Follow-Up on Casey Serin, the Man Who Would Be Rich
Casey stopped by Get Rich Slowly yesterday and had this to say:
I don’t see why a person CANNOT get rich quick… but still do it in an honest and safe way. Whenever you hear “Get Rich Quick” you think somethhing bad.
And yes, if you read my story, it DOES sound like i’m just a big screw-up. AND YES.. I did do some stuff that I am NOT proud of (liar loans). However, I am learning my lessons and hoping to make a comeback.
I am determined to find a way to make an honest buck in real estate in a down market. My mentor “Rich Dad” did it. It took him only about 10 years. Now he has 20K+/mo in PASSIVE income from REAL ESTATE.
Is 10 years too quick? What about 5 years?
That’s an interesting question. How quick is too quick?
It’s not impossible to get rich quickly — the day before I wrote about Casey, I shared advice on how to handle sudden wealth — but it’s dangerous to focus on quick wealth as a goal. I’m convinced that people get rich quickly by chance, not by intention. If get rich quick schemes worked, more people would do them. You’d read and hear documented tales of success. But they don’t work. They’re mostly scams designed to transfer money from saps like Casey into the hands of others.
My advice for Casey is this:
If you have a burning passion to make these sorts of plans succeed, then pursue them with only a portion of your finances. Follow tried and true personal finance wisdom with most of your money. Take 90% of what you earn, and do the boring stuff with it: pay off debt, start an emergency fund, invest for retirement. You are so young right now, that if you would invest just $5000 each year until you’re 50, you could retire then as a millionaire. (Assuming 10% returns.) This is with almost no risk. Why try to get rich all at once? Why not ride it out?
If you’re dead-set on trying to get rich quickly, then don’t use all of your capital to do so. Do the safe stuff with 90% of your money. Save the remaining 10% to make real estate purchases. If you strike it rich, great. But if you don’t, then at least you haven’t mortgaged your future. This isn’t ideal for most people, but you have the drive and desire, so it gives you something to play with. But this means that you’ll have to work in order to meet your goals.
I don’t want to kick Casey’s dreams. Dreams are good, and I think people should pursue them with gusto. Too many people make a practice of telling others why their plans won’t work instead of lending support. But when your dreams are at odds with reality, you need to re-evaluate.
$2 Million in Debt in Two Years
Casey Serin of I Am Facing Foreclosure held a two-hour conference call to take questions from readers and to explain his situation. I didn’t hear the call, but I did read the entire transcript (part one, part two).
For those of you unfamiliar with him, Casey Serin is the Napoleon Dynamite of real estate investing. He took real estate seminars from Russ Whitney and read books by Carleton Sheets. He bought into the “get rich quick” mentality. In October, the San Francisco Gate wrote:
After spending a year and upward of $15,000 (borrowed on credit cards) going to real estate seminars and buying home education courses from everyone from Russ Whitney to Bruce Norris and, of course, the aforementioned Robert “Rich Dad, Poor Dad” Kiyosaki, Serin embarked on his brilliant career as a real estate flopper, er, flipper. “I wanted to move toward financial independence,” he told me by phone from his home in Sacramento, referring to “passive income,” a key tenet of the “Rich Dad, Poor Dad” scriptures (“Don’t work for money, allow money to work for you”).
Most people take these seminars and read these books but never do anything. Serin heeded the advice of these gurus. In his own words, he “bought 8 houses in 8 months in 4 states with no money down looking to fix ‘n flip.” He bought these houses between October 2005 and May 2006, after the U.S. real estate market had already begun to decline. He ended up $2.2 million in debt, and he’s been blogging about it ever since.
Serin’s story bugs a lot of people. He made many mistakes. He lied on his loan applications (and continues to rationalize this by saying it’s “industry standard policy”). He exhibits no regret. He continues to live a normal (even lavish) lifestyle despite being deep in debt. He refuses to pay anything on his debt because he doesn’t think it’ll make any difference. He refuses to take a job. He doesn’t take any action to improve his situation. He seems to be a publicity whore. Despite his failures, he believes that he can still get rich quick in real estate if he only finds some sweet deals.
I don’t get angry at Serin. I just think he’s dumb. He continues to pursue a way of life that is just not tenable. He’s trying to bypass the “hard work” portion of the American Dream. I consider his story a stark counterpoint to my message of “get rich slowly”. (Trivia: Casey went to high school with Ramit of I Will Teach You to Be Rich. The former tried to get rich quickly and failed. The latter teaches sensible entrepreneurship and personal finance advice, and has succeeded.)
As I said, I read the entire transcript of Serin’s two-hour conference call. It’s an amazing glimpse into the mind of a young man who wants wealth now. Since I know most people don’t have the time to wade through the entire thing, I’ve culled the best parts to share here.
The first thing that strikes you when reading Serin’s stuff is that he doesn’t seem to have learned his lesson. He’s two million dollars in debt, but he’s still convinced that there’s a quick fix for this mess.
Besides real estate, I’m also looking at other opportunities. With this exposure I’ve had, I’ve made a lot of interesting contacts in different industries, not just real estate. I’m talking with a gentleman in Southern California who’s a silver broker, for example. The silver and gold and precious metal market right now is on the rise, and whenever there’s turbulence, or any kind of a war, or anything crazy with the economy, that’s a good place to put your money. I’m definitely looking at that. I’m looking at stocks, but individual stocks, not mutual funds — the performers, the companies that are about to take off, that you’re able to make some money; for example, with penny stocks.
I want to mail Serin a box of personal finance books. I want to send him Dave Ramsey, Your Money or Your Life, the words of John Bogle. I want him to read real personal finance advice that works. But I’m afraid the books would go unread. (Does anyone have his address or know how to get it? Maybe I really will send him some personal finance books.)
At times Serin seems to have learned something. Regarding “no money down” deals, he says:
If I was putting my own cash down, I would have been a lot more careful. That’s what happens when you have a real down payment. Anybody out there who’s looking to do a no money down deal, I say, you have to be careful. Don’t treat the no money down as just a free deal for you.
But other times it seems he hasn’t learned a thing:
I love those no doc loans, they’re the best because you’re never stating anything so no one can ever go back and say you were lying on your application.
One caller tried to explain the concept of “buy low, sell high” to Serin, but he didn’t want to hear it.
CS: Well, you know, if you’re going to do flipping in a down market, here’s the biggest thing. Buying is going to be easy. There’s tons of people giving houses away, including myself. You come to me; I’ll give you my houses away. Just take them over, or whatever; save me from foreclosure. So, buying is not going to be the hard part. Selling is the tough part. You have to get really good at selling your properties, and in a down market, you probably don’t want to buy anything that’s not a first-time-buyer home. […] SC2K2: I just can’t handle how brainwashed you’ve been by all those seminars. CS: Oh, yeah? SC2K2: The way you make money in a down market, is you wait for the prices to bottom; you buy in paying very little; and then you sell when they’ve gone way up. Yeah, your Rich Dad probably — CS: That’s the long-term strategy. Are you saying you can’t do quick flips on the way down? SC2K2: You know, Casey, there’s no way you would be able to handle quick flips.
Serin isn’t interested in a long-term strategy. He wants his money now. He doesn’t see that this is precisely where he’s going wrong. While he’s focused on quick riches, he’s neglecting basic personal finance. For example:
I thought at the beginning it would be such an awesome story, a comeback story and show so much success to be able to pay everything back, but at the same time I think I had a bit of a wishful thinking going on, because I didn’t realize when I first started what kind of a hole I was in. The hole’s so big that at this point, I’m really out of options.
Yeah, but here’s what’s going to happen. I pay a credit card — even fifty bucks — that doesn’t do anything to the collection process. Here’s what happens: it’s going to go and get discharged, and then they’re going to try to sue me and try to get that money. So that fifty bucks could have been used better in something where I can actually make money, perhaps doing another deal —
And:
GDS: What’s your FICO now? CS: I actually don’t know because I haven’t logged into Washington Mutual in a while and I probably should have done that before this call, but last time I checked it was in the high 400’s, 490 I believe or something along those lines. It might be lower now because I’m going to have two official foreclosures showing up on my record any time. GDS: Well, it doesn’t go below 450, so it doesn’t get much — CS: It might be interesting to see if I might be a person that actually gets a 450 FICO score. I might be one of the few amongst some of my friends. I’m hoping other people don’t do the same thing I did.
The end of the conference call is the best part. A caller named Nacho tries to push Serin to think about his situation, about the things he’s done.
CS: Not everyone’s going to be successful and self-employed. But don’t you know self-employed doctors or lawyers or successful realtors or anybody who doesn’t have a W-2 but still makes money? It’s not like W-2’s the only… NACHO: But you haven’t been successful! So isn’t it time to try something else? Supplement your side jobs with a real job. CS: Well, you know, I never said I’m not going to get one. I’m definitely considering that, and since I do still have money coming in through some of those other sources, it allows me to stay flexible so I can still kind of be in real estate a little bit, and other opportunities. NACHO: Do you understand that the real estate market is tanking? Do you have a grasp of that? CS: Oh, yeah. That’s why I’m looking at other investing opportunities, not just real estate. NACHO: And do you understand that you bought in at the worst possible time? You do understand that, right? CS: It’s not like you can’t make money in a down market. My local Rich Dad, he made his fortune in the last downturn in California. But of course he had a lot more experience. NACHO: Did he have decent credit? Was he able to secure loans? CS: Well, he could secure loans. He had money partners. He had mentors. See, I kind of started off without any mentors guiding me, and that’s kind of one of my problems. And I didn’t have any construction experience. NACHO: You know what, Casey? I don’t think mentors is your problem. I think you’ve got enough with these guru mentors. I think that that’s the last thing you need. What you need is a swift kick in the ass, from somebody who’s going to tell you the truth. Seriously. Someone who’s going to tell you the truth. CS: I appreciate you being upfront and giving me a little dose of reality, as you said. NACHO: Well, that’s how I roll. I’m always trying to keep it real. I’m just trying to let you know, man, that you need to start looking at things differently. You’ve been going a certain way and it’s not working out for you, and you really need to change the way you’re viewing life. CS: Well, I appreciate it. NACHO: Because everybody that you owe money to is going to get shafted, and then, in turn, taxpayers are going to have to pay — you know, foot the bill. NACHO: Are you worried about going to jail? CS: I’ve already kind of addressed it, but the thing is, if I live my life in fear, what good is that going to do? NACHO: And you don’t think that you deserve to go? You don’t think that what you did was basic thievery? CS: Well, the thing is I wasn’t out to rob banks, I was out to make a business, and I screwed up. NACHO: But Casey, you got everything fraudulently. Come on, you knew in your heart that that was the wrong thing to do. CS: Part of me was thinking that maybe I shouldn’t be doing stated income loans, because even though everyone seems to be OKAY with it, I had a little bit of a gut instinct. I should have listened to it; you’re right. NACHO: And you understand that when you do things wrong like that, sometimes you have to pay the piper? CS: Oh, yeah. And do you think I’m paying the piper? NACHO: No, not yet. Not by any means, no. CS: You don’t think that all the financial stress and the issues I’m going through is not enough? NACHO: Absolutely not, Casey. I think you should be out there working your ass off — two jobs if necessary — paying five bucks a month on every single bill if that’s what it takes to pay this stuff down. I think you should be calling your creditors and making some sort of payment arrangement for you to — CS: You know what? Check this out; put yourself in my shoes. Even if I get three or five or ten jobs right now I’m not going to be able to catch all my loans up, so they’re going to go to collections, and they’re going to start suing me. So if the only good thing I can really do right now is bankruptcy protection or refinance all those loans. NACHO: If you pay five dollars a month on any bill, they can’t send it to collection, Casey, do you understand that? CS: Sure, they can. NACHO: No, they can’t. CS: If I don’t pay the full monthly payment — I can’t just keep letting them go… That means I can just pay a dollar on all my loans and they’ll just keeping indefinitely. They’re not going to do that. NACHO: I’m not talking about the foreclosure loans, I’m talking about the credit card bills. CS: Even the credit cards. NACHO: Casey, you have to do something to try and right this wrong. Who’s the guy who has the blog – I am [$334,442 in unsecured debt. I am 23. Will I make it ?] dollars, whatever the hell it is, in debt. CS: Yeah, the guy eating Ramen and stuff. Yeah, he’s eating Top Ramen; he’s doing all this other stuff. NACHO: He’s doing the right things. If you would do those things, people would be behind you. People would be giving you suggestions and telling you what to do. Do you understand that? CS: Well, you might have a good point there. But I wonder if that guy’s really for real, though. Do you think a person can survive on Top Ramen for six months? NACHO: Oh, yeah. Sure. CS: Do you think he can eat that crap and still be healthy and still be safe? NACHO: Yeah, throw some vegetables in there. Casey, the last thing you need to worry about right now, seriously, is eating your vegan — your mildly vegan — seriously, you throw some vegetables and a little bit of whatever, some chicken in the Top Ramen, and it’s fine. Have some beans and rice; that’s fine. Buy a big-ass bag of beans and a big-ass bag of rice and cook it up. Have oatmeal for breakfast —
Casey Serin may or may not be a good guy. I can’t tell. He seems likeable enough. But he has succumbed to the idea that the best way to make money is through tricks and games. I’m not saying that you have to be a wage slave all your life in order to get money to save for retirement. But there are clear, safe paths to wealth and happiness. They take time. They take effort. My goal is explore these paths with you. It’s too bad Casey’s not along for the journey.
Many of you wrote last week to say that I was too harsh on my friend Gillian, the woman with the “I can’t” attitude. Perhaps you’re right — I may have given up too early. I used to live like she does, and if I can turn it around, anyone can.
For a decade I was a deficit spender. I spent more than I earned. I used credit cards to fund a lifestyle that was beyond my means. Eventually I wised up — I destroyed my credit cards and cancelled my accounts, but my worries weren’t over yet. I wasn’t digging any deeper, but I was still stuck at the bottom of a hole: I was living paycheck-to-paycheck.
Twice a month I would deposit my paycheck, pay my bills, and then look to see how much was left. Whether the surplus was $20 or $200, I made plans for it: comic books, video games, clothes, whatever. I used to joke that I was an expert at spending every penny I had. Except that it was no joke. Late at night, when I couldn’t sleep, I would wonder why I could never get ahead.
I lived like this for years. You can maintain a paycheck-to-paycheck lifestyle for a long time if you’re not taking on new debt (and if disaster doesn’t strike). Here’s another way to look at it:
If you spend more than you earn, you are acquiring debt.
If you spend about what you earn, you are living paycheck-to-paycheck.
If you spend less than you earn, you are acquiring wealth.
I don’t know about you, but my goal is the latter. Escaping the paycheck-to-paycheck lifestyle means building positive cash flow, getting ahead of your expenses. Instead of spending exactly what you earn, you need to save something every month; even $25 or $50 can make a difference. Once you start, this amount has a tendency to snowball. For me, a $25 surplus grew into a $100 surplus, which grew into $300 per month and more!
But how do you start generating this surplus? How do you escape from the paycheck-to-paycheck pit? Here are some ideas that worked for me — one or more of them may work for Gillian. Or for you.
Start a savings account. For years I resisted the idea of opening a savings account. “Why should I?” I said. “I don’t have money to save. I barely have anything in my checking account!” But when I finally did open a savings account three years ago, a funny thing happened. I started finding money to stash there. It wasn’t much at first — $20 here, $75 there — but in time, it made a difference. Before long I had developed the savings habit.
Pay yourself first. The best way to begin your escape is to save first, before you do anything else with your paycheck. I know this can be difficult. You worry that you won’t have enough for your bills, for gas, for food. But the danger is that if you don’t set the money aside first, you’ll just spend it. Have a small amount — $25? $50? — automatically deducted from your paycheck and placed into savings. Chances are you won’t even miss the money.
Spend with purpose. You may want to consider a budget. Budgets aren’t scary, and they’re not difficult. Some people find them liberating. There are a variety of computer budgeting tools available, including:
A budget can be handy, but even if you can’t bring yourself to use one, you should know where your money needs to go.
Draft a spending plan. I don’t keep a budget, but I do create a financial plan every few months. It’s nothing more than a quick financial snapshot showing my income and expenses. I also list upcoming major outlays. This helps me keep my financial goals in mind as I go about my daily life. It’s easier for me to decide not to buy the latest Spider-Man comic when I remember that I’m saving for a trip to Europe.
Attack your debt. These methods are great, but if you really want to free up cash, pay off a debt. I recommend using a debt snowball to tackle your obligations one after the other. But if your goal is to ease financial pressure ASAP, you may want to try a slightly different approach. Pay off your debt with the smallest balance, but instead of rolling the freed cash flow into the next debt, use it to establish a savings buffer.
Cut costs. This one’s obvious, but can be difficult. My friend Gillian views cutting costs as deprivation. If you’re willing to look behind the immediate sacrifices to the long-term gains, cutting costs is an excellent, quick way to free up cash. There are a million little things you can do to save money now.
Boost your income. Many people have suggestions for how to cut costs, but few remember there’s a second side to the wealth equation. Earning extra money helps just as much as practicing frugality, and sometimes hurts less. But how do you get extra cash? Find a part-time job for a few months. Sell some of the stuff you’ve acquired over the years. Ask your boss for a raise. Find a way to make money from your hobbies.
Avoid lifestyle inflation. A final way to escape the paycheck-to-paycheck purgatory is to opt out of lifestyle inflation. When you get a raise, don’t adjust your standard of living to match. Use part of this new money to pay off debt, and another part to accelerate your savings. When your friends show you their new iPhones, ooh and aah, but resist the urge to get one yourself. Learn to love what you already have.
When I became serious about my finances, I realized that living paycheck-to-paycheck was dangerous. I was always one disaster away from returning to the credit bandwagon. I made a resolution to stop living on the edge and to start saving. It was difficult at first. Old habits die hard. But with time and persistence — and with the habits above — I made the switch. Now, a couple years further on, I’m just beginning to profit from my hard work. I have a monthly cash surplus. I have escaped from the paycheck-to-paycheck lifestyle.