40-year-old homeowner says economy doesn’t add up: ‘I’m making the most money I’ve ever made, and I’m still living paycheck to paycheck’
40-year-old homeowner says economy doesn’t add up: ‘I’m making the most money I’ve ever made, and I’m still living paycheck to paycheck’
“There’s this wild disconnect between what people are experiencing and what economists are experiencing.”
Based Nikki reminding us economists aren't people
i am on board for the overall thesis of the article, because US consumer spending floats on easy credit and when there's a credit crunch it compounds the effects of the inflation it was supposed to combat. people here buy money to buy everything and when buying money gets more expensive, everything goes haywire. some people cut back hard and some people borrow like it's 2019 and then default. but this bit...
For Denise and Paul Nierzwicki, credit cards are the only way to make ends meet. The couple, ages 69 and 72, respectively, have about $20,000 in debt spread across multiple cards, all with interest rates above 20%.
The trouble started during the pandemic, when Denise lost her job and a business deal for a bar that they owned in their hometown of Lexington, Kentucky, went bad.
They applied for Social Security, which helped, and Denise now works 50 hours a week at a restaurant. Still, they’re barely scraping together the minimum payments for their credit card debt.
it goes on to say that they blame biden for this and are voting for trump because their credit card debt was only $10,000 when trump was in office. also, they think immigration is causing their problems. so basically, we're dealing with a real brain trust.
there has got to be more to this story under the part about the "business deal went bad". looking the guy up, he seems to be a realtor who bought a piano bar right after the global financial crisis (vulture!) and prior to had 10+ holding LLCs (a liability and tax dodging landlord move) which were dissolved in bad standing in 2008-2012. seems like a pattern with this guy. reads like they were trying to cash out of a big toxic asset (the bar) for a massive payday and, in standard realtor fashion, counted their chickens before they hatched and indeed borrowed in anticipation.
but anyway, working 50 hours a week to make minimums on $20k @ >20% is bankruptcy territory imo, but at least some kind of consolidation program if not a secured local bank loan against an asset or a balance transfer switcheroo. otherwise, that's like $333/mo disappearing into a void, just to prevent the debt from growing and letting interest recapitalize. just thinking about that makes my stomach hurt.
my thinking, the story behind the story is that they are avoiding bankruptcy because they don't want to sell their bar at whatever the current [lower] offer is and are trying to float their unstructured, high interest debts by forcing the elderly wife to wait tables 50 hours a week in the hopes that Daddy Deals can find a bigger idiot to buy his failed piano bar so they can ride off into their sunset years on a pile of money. that would explain not being able to consolidate or get a secured loan, because Mr. Real Estate Wizard leveraged the shit out of everything during the free money days. major small business tyrant sits on own balls vibes.
See this is why I don’t own a credit card because I don’t know what the fuck anything you said means. Im kidding kinda.
It's fine so long as you make sure to
Having gotten one relatively recently it's not as complex as you'd think... but then that just begs the question of what these people do to owe literally THOUSANDS, like I just pay my card off and don't go into debt, it's really that simple.
They are 69 and 72. They have social security income. If they are smart, they've transferred all their assets out of their names, and now they are cashing in on their credit. If you don't leave the world with an estate worth nothing and 7 figures of unrecoverable debt, then what are you even doing with your life?
They're bad at business and they're bad at personal management, and now they've lost it all and they're blaming the president for the whole econony.
Rich people had more money when Trump was president, go figure.
This is just wrong.
White family wealth gained a bit but remained stagnated under Trump. It shot up exponentially under Biden at the expense of all other races.
S&P500 is already 50% higher than its peak under Trump’s, and that’s just 3 years under Biden. Average housing asset value went up 36% from 2019 to 2022. That’s a huge amount of wealth increase in just 3 years.
Biden’s policies, especially its 5% interest rate hike, have been very specific about making certain demographics richer at the expense of the others.
There is no way that rich people had more money under Trump.
Even if the situation these people are is entierly pf their own making, usury is still a big problem.
certainly. 100% agree. i believe interest on loans is unethical. probably under an even slightly less absurd rent-seeking, predatory system than our own, the situation i believe they have created for themselves would not even be possible or would certainly be passively discouraged. the ideological frame of the petite bourgeoisie is not to do socially valuable work, but instead leverage one's future to "invest" in scarce resources and corner some market. real estate in a densely populated area being a favorite. they internalize the idea that their capacity for risk is their capacity for success and the path into "success" which is entrance into the haute bourgeoisie.
of course, the haute bourgeoisie already has all the markets cornered and can wait out any deal while the petite bourgeoisie fatted sheep is sheared and slaughtered by their capitalist allies in the banks, pushing them to sell their position lower than they'd like. and this particular sheep, being devoured by the wolves, is crying out that problem is foreign sheep and how the wolves don't have enough power.
I've got a friend who works for a real estate thing, think like "cash for ur shitty house" type company. He told me this story about a guy who was sitting on a house worth over 1.4M, then "a business deal went bad", meaning he wasn't paid out for his part of a business that was sold off. He ended up in 400k in debt, had tax liens on his house, the whole shebang. Now my friend's company came in offering him 600k for the property to avoid foreclosure. it would have paid off the outstanding debt and tax liens but the guy wanted upwards of 800k. Now the lien has been sold at a tax auction and the dude is shit out of luck and will most likely have to declare bankruptcy. This seems to be a pattern of people who are so used to leveraging debt not being able to grasp the risk involved and think they can just wait it out and get the amount they want.
What also doesn’t add up is, at ages 69 and 72, they are just now applying for Social Security. You can take SS as early as 62 and the longer you wait the higher your payment is, but this stops at 70 and the advice given most normal people is to start taking SS between 62 and 65. Only people I have seen wait to 70 are high net worth people.
no doubt. I plan to start "retirement" at 62 for sure, but my only uncertainty is healthcare between 62 and 65, which is when Medicare starts.
elsewise, my goal is quit as early as possible and figure out how to get by on whatever I get. I feel like people who want to retire with big bucks are nuts. what a gamble!
What is the tax advantage of the holding LLCs? Is it some state tax thing? For US federal income tax purposes, assuming these were wholly owned, they would be disregarded entities.
My wife likes to watch these financial youtubers and she found a guy that interviews Americans and they end up with like 30 - 100k in credit card debt, which promptly puts them in "paycheck to paycheck" status. I really appreciated Hell of Presidents looking at the two paths American presidents offered the American people. Carter with "adopt a prayerful and spartan lifestyle" and Reagan "Accumulate debt and pretend everything is okay".
It gets so tiring having to explain to older people that in their words "assets increasing in value" is a BAD thing.
Um, stupid commie, have you actually even considered that number go up? Checkmate.
My parents are planning to retire soon, and part of their retirement plan is selling their house to downsize into a space that's better suited for their old age. Unfortunately none of their kids can afford to buy the house for market price, but they won't be able to retire if they wanted to sell it at a discount to any of us. We've had a lot of difficult conversations lately where I encourage them to stick to their retirement plans while explaining to them that us kids likely won't ever be able to afford our own places, ever
Between you and me, I'm just half-considering what it would be like to leave the US entirely. I know many other countries have a slew of problems, but its obvious that the US is an ancap shithole. The wealthy are the only "real" people, and we're just cattle that they always foot the bill to for everything all the damn time, and we're told that we're 'entitled' for not liking it.
30-something renter (me) says economy doesn't add up: "I'm making the most money I've ever made, and I still can't qualify to buy a house"
why aren't I allowed to get a mortgage that is lower than the average monthly rent I have to pay anyway!?
Does she purchase soy lattes and avocado toast by any chance?
I ordered an avocado and toast in 2008 and still haven’t financially recovered.
my girlfriend and I are both making more money than either of us have ever made, but there is a 0% chance we'll own a house
this is how California rolls
Same here, I’m likely moving with my wife and kid to another state this year in the hope of us being able to not have to live in a 1 bed apartment, but….my employer has stated they’ll cut my wages by 30% if I do
we considered it too for a while but would suffer the same penalties.. we both would have lost 30% at least and then I ended up leaving my job anyway and now i have to work at least 3 days onsite so here we remain for now
that's right baby i'm making more money than i've ever made as a renter but can't afford a studio or 1br apartment anywhere
I'm making 60% more than I was in 2022 and yet I'm only barely saving more. It all gets eaten up at the fucking grocery store
'Pour calmer tes envies d'holduper la caissiere...'
Origin of quote below
