What can we learn from these people? (Financial disaster edition)
My local paper, the Charlotte Observer, recently wrote about an area house for sale.
It cost $22 million to build, and took six years to complete, finished in 2009. The couple lived there for less than a year; at the same time, the furniture company they ran filed for bankruptcy.
The house is now bank-owned, and on the market for $8 million.
Wow.
O.K.
So this is where we indulge ourselves in a brief moment of (your choice): (A) Schadenfreude, (B) “If I had that much money I’d never be so stupid,” or (C) “If I had that much money, I wouldn’t build such a boring, weirdly fake looking house … and in suburban Charlotte, come on.” (That last one is mine).
But now let’s figure out what we can learn from these people, beyond greed = stupid/bad.
The part I can’t get past is that no matter what kind of crazy, money-for-all!!-mid-2000′s loans/mortgages they got, they must have had at least — I’m just making a rough estimate here — $2M+ on hand to qualify for them. For $2 million, they could have built a palace in these parts and owned it debt free. Heck, they could have built a palace for $1 million, owned it debt-free, and had a remaining $1 million fund set aside exclusively for years and years’ worth of home ownership costs like repairs, property taxes and insurance. Obviously, those options — still million-dollar mansion options — weren’t as appealing. Why?
This is where I see their mistakes as a reminder to scrutinize my own choices. At age 32, if I’d used my savings differently, I could be the proud debt-free owner of … I don’t know, a primitive cabin or a trailer or one of those houses in Detroit selling for 7 cents or something. But I don’t want to live that way. I want something more, something nicer.
Sure, in my price range, I don’t think it was crazy to pass up debt-free in exchange for things like running water and relative safety. But once those needs are met, it all comes back to:
How much is enough?
Why do we always want one level better than we have?
Where do we draw the line between debt and material desire? How much debt is “worth it”?
We criticize these people for not living within their means. Boy, did they make it really easy! But are we setting ourselves up to make the same mistakes, albeit on a much, much smaller scale?
Feel free to share your thoughts below. I don’t know the answers to any of these things.
I wonder if it is, on some level, the idea that this is the only life we’ve got and so it has to be super special, super optimized to the max, super perfect.
And so that extends. A wedding can’t be simple because it must be perfect, it’s your ONE chance to have a wedding (or that’s the plan). A house isn’t simply a place to live, it has to be uber special, specialer than all the rest.
I looked at the photos of the house. Very gilded age. Very grand. Everyone’s trying to matter and how we define what it means to matter is what choices are made of.
Heck, you could argue that they were trying to live life to the fullest, thinking, “You can’t take it with you, may as well have the golden gilded staircase NOW.”
Increasingly, I’m starting to realize that the most precious commodity we’ve got is not money or space, but time. And so that’s where the choices break down: Yes, you could have more house, more space, more ornate wall paper. But had they spent less, and saved a million to live on, they would’ve bought themselves time.
Reminds me of your Mexican fisherman story in the Jimmy John’s.
And the thing is, I CAN see this point:
‘Heck, you could argue that they were trying to live life to the fullest, thinking, “You can’t take it with you, may as well have the golden gilded staircase NOW.”’
Hi AJ!
So, I watched this little TED talk (after mocking TED talks, of course) about a dude who builds from discarded materials. Something he said really struck me–we’ve inverted Maslow’s hierarchy by shoving vanity into our basic needs. It’s not just shelter. No, it’s gotta be Ego In House Form. And we must have bigger and better and shinier than the dude next door or we’re not quite good enough. Well, hmmm. So true!
I also think this (and all freakish manifestations of greed and excess) is about a fundamental disconnection–from the body, from humanity, from the past, from the future. Deep, deep, deeeeeep disconnection. Taking far more than you need–and I don’t think there’s any grey area with a $22million home in freakin’ NC for the love–yanks you away from the body and the rest of humanity. No human needs that kind of space, and you clearly aren’t paying attention to the rest of the human family if you can live in that kind of excess when so many are suffering. The Depression and other historical tales of excess gone bad–irrelevant; the future possibility of life not being one blissed out financial gravy train–unimportant, because you’re not connected to anything. This one, blazing moment of greed, wrapped in sunshine and grand foyers, is all that matters. Me thinks that can only happen when you’re completely untethered to your body, to humanity and to time.
I love this comment. Thanks CF. Your fans want you to write more!
yes! yes!
That $22mil price tag for the house is so ridiculous it seems meaningless. There’s definitely a disconnect. I wonder if their contractor has built a $3mil house around the corner hee hee.
I’ve been reading the book Radical Homemakers and the current chapter is dealing with wealth and poverty. The author and her sources are defining wealth as TIME, not money or possessions. By this measure, many of us are quite poor, shackled as we are to our jobs and our things with not enough time to have relationships with our loved ones.
ok, slow down Margo. But this bad economy has made me very focused on GETTING MONEY and I’m not a poster-child consumer who would borrow beyond my means to get more stuff. Money and consumerism is just a seductive cycle, isn’t it?
Btw, about debt: my father in law who is an excellent money manager, has always called a mortgage “good debt.” I don’t stress at all about our mortgage, but I do work hard to pay down our school loans and home renovation loan.
I soooo wish I had learned TIME was the true priceless possession.Better late than never! I just want my freedom, lucky enough to have a small house paid for.
That is awesome about the house, congrats!
On another note, HAPPY BIRTHDAY!!!!!
Also? BLOG MORE. I mean, I know yer pregnant and living your life and all, but seriously, man. You have an audience and we will riot at some point.
Emily, I am missing your blog too! And happy belated birthday! Hope you have a wonderful Thanksgiving with your family and friends.
Thanks guys! My attention span has been shit lately. Lame hormonal excuse. La la la la la