This guys an idiot

Adam Personal Finance 5 Comments

I was recently reading an article in The Atlantic titled The Secret Shame of Middle-Class Americans. I’ve got to be honest, I was feeling pretty disgusted by the time I was done.

How many times are these stupid, upper class yuppies going to complain about where the economy is but take little responsibility for their own actions? Does he take some level of responsibility? Sure, a bit. But for the most part he put the blame on the economy, though he has spent the bulk of his career in one of the greatest economic boom times of all time and judging based on their job titles, these were highly paid people.

He describes himself here, “made a solid middle- or even, at times, upper-middle-class income, which is about all a writer can expect, even a writer who also teaches and lectures and writes television scripts, as I do” and his wife is a film executive!

Most of all what bothers me is that he seems to see himself as one of the middle class. Let me be clear my friend, you are no more middle class than I am. You and your wife’s combined income must have easily exceeded $200k (I assume and I apologize if I’m corrected on the issue), putting yourself in the top 10% in the US. There are people making a fraction of what you do, making smart decisions, and managing to do everything from retire early to simple live a good life, stay out of debt, and appropriately manage their finances.

What Not to Do

So let’s use this article as an example of what NOT to do with your personal finances. How did our author get himself into this mess? Our author made the following decisions:

  1. He complains about being an author as a problem, but if you observe the blogosphere there are a ton of great ways to build a diversified and steady income and that’s by people without a 1/10 of his access. He’s been on tv. His wife is a film exec. SCORSESE bought the rights to a book he wrote. This is not a struggling writer.
  2. Live in NYC – That’s fine, but you need to be willing to deal with the consequences and if you aren’t paid highly enough, probably time to relocate by the time you have kids.
  3. Build up a credit card balance – Nothing even worth saying about this if you read my blog.
  4. Bought a home they couldn’t afford – Duh. Don’t do it if you can’t afford it. He tries to make these seem less bad by calling it a “small co-op” even though the cost caused them to “scrape by” while before they had the unicorn of NYC living, a rent controlled apartment.
  5. Child-care – sucks but necessary. I’d be curious what level of childcare we’re talking. For this guy I’m betting an expensive nanny.
  6. Private School You can’t afford. Live somewhere with a public school find acceptable. No one made you live near shit schools. There’s also magnet schools, charter schools, and lots of other options. Plus, I know how expensive Houston private schools are so I can only imagine NYC costs are OUTRAGEOUS.
  7. Wife quit her job – At this point their kids are in school. This is not the formative years that also require childcare costs where it sometimes makes sense to not work vs. pay childcare. Why is his wife quitting her job in this time period when they’re still in dire financial straits?
  8. House in the Hamptons – No opinion here because I don’t know it costs. I’m told it wouldn’t have been cheap.
  9. Carried 2 Mortgages! – Apparently they bought a 2nd place before they could sell the first and paid for an NYC co-op for extra years before selling at a lost. My jaw is on the floor at this point.
  10. Wife chose not to re-enter the workforce – Ok, so she couldn’t be a film exec anymore. So take a lower paying job. Get some new skills. People do it everyday. How many people went back to school to be a nurse after their kids left for college? She probably would have if you had TOLD HER you were broke. That should be its own line item. Oh wait…
  11. He DID NOT tell his wife they were BROKE!
  12. Drained his parents savings to pay for his kids expensive, private college degrees
  13. Paid taxes late with penalties. LOTS of penalties (by choice)
  14. Drained his 401k to pay for a Wedding (WTF!)

The Rant

These are only the things he lists and he made these decisions can you imagine what’s not in here? I’ve spent time in NYC. You can spend thousands per month going out for drinks and food. Barely anybody cooks. What type of vacations? Clothes? I can only imagine the frivolous stuff this guy racked up.

Let me reiterate, he apparently had affluent enough parents to cover his kids going to Stanford  and Harvard Med and the other to Emory and UT for a graduate degree. That’s multiple hundreds of thousands they covered for them, but now there’s no inheritance. Let’s hope his parents still have enough to cover their retirement. Unbelievable. YOU ARE A 1 PERCENTER! Shame on you for pretending you are in the middle class with the rest of the responsible $30-80k earners.

At some point he decides to get it together. They used a lona-modification program and drive an old car (which MMM would say you should anyway). They don’t eat out much. Minimal spending. Boohoo is all I can really say to this. They’re finally living how huge chunks of America live until they’re in a comforable enough place in their financial life to loosen the rains. A lot of people stay in these zones anyway, just because they like the minimalism. Many of my millionaire blogger friends live this way though they could easily buy high priced cars and drop mad cash on vacations and dinners.

Now maybe you think I’m being an asshole. Maybe. He does spend a paragraph taking some responsibility for his screwups. I’m glad he’s owned up to that and figured it out. But my god, why then spend the bulk of the article talking about the middle class plight, stagnating wages, the economy, and putting yourself in their as a victim?

It’s pretty simple. Don’t do anything on the 14 point list above. Rent or buy beneath your means. Don’t spend on expensive private schools. Don’t have expensive weddings. Don’t rack up credit card debt. PAY YOU TAXES! To my financially oriented mind this isn’t a tough list, but apparently I’m in the minority.

What He Got Right

Only 47% say they can cover a $400 emergency and only 38% could cover $1,000! He then proves how ridiculous this is when showing that households all the way into the 6 figure income level still can’t come up with a couple thousand for a problem. 47% of the country should be taking the MMM approach that this is a financial emergency equivalent of a heart attack. You need immediate savings and it should be coming before anything else. Run, don’t walk.

Please everybody. Take this as a lesson. Don’t live your life this way. Live within your means. Save. Be strategic in your decision making. Nobody owes your a 1% life.

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Comments 5

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  1. Nate

    The article is just one long face palm.

    “It was, according to that Fed survey and other surveys, happening to middle-class professionals and even to those in the upper class. It was happening to the soon-to-retire as well as the soon-to-begin. It was happening to college grads as well as high-school dropouts.”

    This is probably one of the least egregious parts of the article but the mindset is fascinating – he describes living paycheck-to-paycheck like its an unavoidable affliction. Its just somehow “happening to” well-off professionals and the upper class.

    “We all make those sorts of choices, and they obviously affect, even determine, our bottom line. But, without getting too metaphysical about it, these are the choices that define who we are. We don’t make them with our financial well-being in mind, though maybe we should. We make them with our lives in mind. The alternative is to be another person.”

    The cognitive dissonance is really fascinating. He knows exactly what the answer is and dances around it, but can’t fully accept it. So “living within your means” becomes “being another person”. Amazing.

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  2. JayCeezy

    Neal Gabler’s money-shot: “I am a financial illiterate, or worse—an ignoramus. I don’t offer that as an excuse, just as a fact. I made choices without thinking through the financial implications—in part because I didn’t know about those implications, and in part because I assumed I would always overcome any adversity, should it arrive.” Gabler is a writer, through and through, his story is Shakespearean in its tragedy…Macbeth, Julius Caesar, Hamlet, Gabler.

    Seriously, I’m actually familiar with Gabler’s work, read one of his books, and seen his name for years. Very surprised he would admit this, am unsure much of this is true (he can defer paying his taxes, owns a home, racks up credit card debt, and yet can’t figure out $400 to solve an immediate problem?) and mostly, can’t figure out what I am supposed to learn from this sob story. (Adam Chudy, you are definitely not being an @$$hole!)

    The closest I come to any kind of takeaway is this: Don’t have kids, if you want to give them things you can’t pay for, endure the humiliation of a grown man asking his parents for money, and then lamenting that the unrequited entitlement of an inheritance that will never come. *Soup N@zi voice: “no inheritance for you!”* For shame, Neal Gabler, for shame.

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