Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (18160)	3/5/2004 10:42:37 AM
From: GraceZ	Read Replies (1) \| Respond to of 306849

I think the official CPI is representative, my experience and your experience represent either extreme of the distribution. My point is that price inflation is something of a local phenomenon. It tends to be worse where people have the most money to throw around and lower in areas where incomes and wealth lags. I think the PA county where I shop is very cheap in comparison to Northern Baltimore County where I live but my sister who lives in an extremely affluent area of PA thinks prices are completely out of control and a quick look at what she pays for things shows she's correct. She thinks my life is "quaint", I think she's hostage to all her stuff and her high rent lifestyle. No one needs to spend $6000 on fabric for one sofa. Only someone with way too much easy money would consider that a prudent purchase. I'd also wager a guess that you could be discounting the cost of starting out. If I compare the envelope of receipts from 2003 with that of 1988, when I first started keeping it, the one from 1988 is paper thin while 2003 is breaking the sides of the over sized envelope, same with the envelope with the bills paid. The number of things I buy and services I pay for has increased exponentially from that first starting out level. I have four huge binders just to hold the warranties and manuals for all the crap we own when back then we had one phone, a TV, a stereo, a VCR, a washer, dryer and refrigerator. No three computers, no TiVo, no snow blower, weed whacker, hedgehog, chain saw, table saw, reciprocal saw, lawn tractor, Palm Pilot, printers, network hubs, DVD player and we didn't have cable, Internet service, Netflix, cell phone service, pool service, chimney sweep, termite service, septic service and vet bills. We had a very simple life back when we first started out. Now I routinely run out of electrical outlets. I'll take just starting out any day over all the crap I've accumulated. I'm constantly trying to get back to that level of simplicity. I must admit it did seem very difficult to me to buy that first house. It seemed like quite a stretch at the time although I laugh at the amount I needed to get there now. My old assistant just bought a house a month or so ago that was a little less in price than my first house in 1987 (they are exactly the same square footage). Less than the one room addition my neighbor is putting on their house. I was shocked when he told me he found one that was in a fairly decent neighborhood and in good condition at that price. His mortgage payment is 2/3s what mine was which is largely the difference in rates. He's a frugal guy, he looked for over a year. When he worked for me he worked 3 days a week making about 25k a year (he makes about 35k now) and he saved about 6k a year on that amount, bought his cars for cash, and has always had roommates to help pay the rent. Of course during that time he lived in a house that I used to rent for my business and the landlord hasn't raised the rent in over 25 years. He had a hard time getting a mortgage because the only debt he ever had was a student loan and he paid that off the first year he was out of school. I made the decision to hire him when he told me this (that and the fact that he graduated with a perfect grade point average from the same college I attended). OTOH my husband's niece who is the same age constantly borrows from her mother to pay living expenses and took on a fall down drunk as a roommate to help pay her oversized mortgage. The difference is she insists on living in an expensive neighborhood, buying a new car every three years, spending piles on clothes and restaurants. She makes more money than I do and is constantly in trouble with money. She's a material girl who loves plastic. If that's what you mean about starting out, she's definitely starting out going down the same route as most Americans. Making more than ever and racketing up the expenses just ahead of that income. She'd consider Chris's life to be unduly harsh even though he probably sees as many movies as she does and goes to the same trendy bars and takes a long vacation somewhere exotic every year. He'd look at her lifestyle and run in the other direction even though she is a total babe and they're both single. He's be thinking "high maintenance" and he'd be right. The key to living well in this world is to avoid the high maintenance trap, it's a hell hole.