Real Estate Bubs

I ran across a video that matches a roller coaster to the last 120 years or so of home values adjusted for inflation. Notice the last 20 years or so just goes straight up.

The link below is where you go if the embedded video doesn't work:

http://video.google.com/videoplay?docid=-2757699799528285056




I have started reading a book called "The two income trap". So far it has been quite interesting. The authors debunk the myth that people today go bankrupt because of overconsumption. That is what the creditors want us to believe. In almost every aspect of life, average people today spend less on just about everything. The one thing they spend more on... way more... is a home.

The reason for this is the unintended consequence of women entering the workforce in huge numbers. That has given families more money to bid up housing. Housing is the one thing that has gone up, because families want thier children to be safe and go to good schools. In most areas, when adjusted for inflation, housing is three times more than it was a generation ago. In 1975, the government forced mortgage companies to count a womens income. Sounds like a good thing, but that gave families more money to bid up desireable housing. Now, even though families earn more, adjusted for inflation, they actually have less after the house is taken care of.

This is the reason most women have to work, and when disaster strikes, since both incomes were being used to buy and maintain a house, there is no safety net. That is the reason we see more bankrupt families.

We are trying to get ourselves down to one income, and it has been awful. We don't have unnecesarry things, and we just can't seem to make ends meet. More than half of my paycheck goes to pay the mortgage, and this is with a house that we only had to pay half price for. You would think that someone who has a master's degree (almost) would easily make money for his household, but it isn't true, especially if that person goes into teaching. This is the main reason that I see myself going into administration, because it is my job to earn enough for my family, so my wife can stay home and raise some good kids, and so we can save enough to not rely on government programs (social security) when I'm too old to work.

My wife is a very skilled person, and can earn our family alot of money if she needs to, but we have decided that it is better for her to stay home, because she wants to be with the kids, and we know it is the right thing to do.

I don't want to come off as bitter, because I wouldn't trade my life, my wife, or my kid(s) for anything. I feel like I put off kids too long because of money, and I'm glad that we decided to just take the plunge, even though we knew it was going to be rough. I'm also glad I went into teaching, because that is what I like to do, and it is much easier to deal with 14 and 15 year olds when it is something that you like to do, and you are good at it. If only they'd get my jokes, they'd realize how funny I am.

It's just nice to know what the problem is, so we at least know what we're dealing with. We've made a goal to start a Roth IRA by December, and I think all young couples out there should make the same goal, because short of Lincoln playing a professional sport, I don't see anyone taking care of me when I'm older.

Thank you Democrats for shooting down social security reform, even though you claim to look out for the working class. It is quite obvious that you only care about foiling George W. Bush, and getting God out of our society. Keep up the "good" work. Not that I think the government should take care of me, but right now, I give social security 7.5% of my paycheck, and my employer matches that amount instead of giving it to me. Since I am paying all this money into the broken system, it would be nice to see a payoff. I'd rather just get the 15% and fend for myself.

By the way, the number one predictor of going bankrupt now is if you have children. I think that is a sad commentary on where our society has placed it's priorities.