
How Debt Can Destroy a Budding Relationship - georgecmu
http://www.nytimes.com/2010/09/04/your-money/04money.html
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chime
I don't think debt by itself can destroy a relationship. Lack of proper
communication can. I had under $50k debt from my undergrad (international
student, double the cost of tuition) and my wife had none. My masters was
being paid by my employer while she would be taking about $80k in loans to pay
for her medical masters. We were upfront to each other about our obligations
and plans of repayment.

I've paid off almost all of my debt and she will take care of hers once she
graduates. Even if we both had 100k+ in debt, it wouldn't make a huge
difference to our standard of living. We'd simply be paying off debt instead
of adding to our savings.

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sliverstorm
What if you find yourself essentially wedding your way into a mountain of
debt? By legally binding yourself to that person, don't you become jointly
responsible (and culpable) for their finances, including past debts?

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jbellis
No. this is discussed in TFA.

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sliverstorm
At least from what I read, TFA only discussed how the debts relate to divorce.

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philwelch
If you carry $170,000 of debt without even realizing how much the total amount
is, that says something about you, something that may in fact make some people
less willing to marry you.

 _Having_ hundreds of thousands of dollars of debt is fine. It's a curse of
the middle class, at one point or another--a mortgage if not student loans.
You're supposed to realize what you're doing when you borrow that kind of
money, though. Running up hundreds of thousands of dollars of debt without
fully recognizing what you're doing seems irresponsible. You're mentally
evading your responsibilities to others.

I can't even comprehend the mindset involved in that. How can you spend years
paying for anything (even a car!) without even once trying to keep track of
where you stand in terms of paying it off?

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mortenjorck
I wonder if it's due in part to an acclimation to residential rent and car
leases. I consider myself very financially disciplined, and would never lose
sight of the outstanding principal and interest rate of a loan, but I have no
idea how much I've paid the landlords of my current rental apartment over the
past few years. Like the woman in the article, I don't really fancy thinking
about it.

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philwelch
That's past expenditure, though. It's not helpful to think about past
expenditures too much, because as sunk costs they fundamentally don't matter
anymore. It's not useful to cry over spilt milk. OTOH, it's positively
uplifting to contemplate the state of having saved thousands of dollars, or
having paid down your debts by thousands.

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patio11
$170k for a bachelor's in _photography_?!?

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DannoHung
This is why I argue against liberal arts degrees. There are so, SO few people
who will ever be able to bring the sort of value required by a degree in the
liberal arts _based_ on the skills such a degree would provide that it is
completely economically irresponsible, especially now that _just_ having a
Bachelor's degree says about as much as having a High School diploma did about
30 years ago.

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patio11
So one of the projects paying the rent this summer was working for a client
which markets college degrees. They asked me to crunch some government data
and figure out what degrees are worth on a per-major basis. While I'm mostly
done and paid (yay), the project isn't live yet, or I'd show it off.

I think they'll be OK with me saying this much: the data do not agree with
your conclusion, for any sensible value of "liberal arts."

Now photography, that is another story. My research methodology totally missed
it as a major choice, because the obvious occupation (photographer) _doesn't
require a degree_. Looking at the BLS source data though, egads, $170k to
become a photographer is a bad call economically. The median annual salary
(note: for photographers at all stages of their career) is $19k. The
overwhelming majority are part time only. If you give generous assumptions as
to future income growth, the NPV of being a photographer is $410k.

That compares disfavorably with _every_ degree I actually have in the data
set. (Including, most relevantly to her situation, the associate's degree you
need to become an X-ray technician, which you can get for less than $5,000.
Spend another $10,000 on camera lenses, bam, you're an X-ray technician doing
something she loves _as a hobby_.)

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plnewman
She's in San Francisco. If she can get regular work at weddings she'll be able
to pull down $2000-3000 per gig, and probably more over time. I talked to
people who wanted $5-6k -- when I stopped laughing they told me that there are
people who will pay it. Weddings are an absurd profit machine.

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rbritton
The pricing for a weddings-only photographer is largely based on the number of
bookings they will do in a year and their demand. All else being equal, the
$6k one is likely in more demand than the $3k one. That demand is almost
entirely based on word-of-mouth referrals, which take time to build, so it
ends up like any brand -- it's worth more when more known.

The deliverables are drastically different between different photographers as
well. The wholesale cost difference between our upper-end album and the lower-
end one is about 600%.

I don't remember the article to reference it here, but the current cost of
weddings was started largely by the introduction of gift registries. It
snowballed from there.

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plnewman
It's obviously demand-based, but when I went through this a few years ago, the
least experienced people we talked to were asking in the $2k range (this is in
SF). Book 30 of those a year and you're grossing $60k. You have to work
weekends and there are consultations and other stuff, but it still strikes me
as a lucrative job if you can pull it off.

The wedding photographers have some clever ways to sell you more stuff too.
Most of them want to retain the rights to the photos that you pay them to
take, so they can sell prints to your guests or license them as stock art and
stuff. I actually got into a shouting match with one photographer over that --
I insisted on treating the photos as works for hire under US copyright law.
One guy had "his and her iPods" that he would load up with wedding pics at the
end of the reception. The cost? $1000. Yeah, no thanks.

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rbritton
$60k would be great if that were all income, but the majority of it isn't.
After everything is accounted for (product cost, equipment depreciation,
studio space, updated samples, advertising, etc), the profit amounts to 20-30%
of it We spend about $1500/mo here just on studio rent and utilities.

I won't go into your second paragraph, though, because that mostly boils down
to a difference of opinion.

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bricestacey
It seems counterintuitive to simply list cost of rent and utilities when
discussing photographers as if no other business suffers the same. It'd be
more interesting to list expenses specific to the industry.

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DougBTX
Yes, obvious standards costs of business, but the post above does the
calculation: 2k x 30 = 60k salary. If you're arguing with someone who doesn't
have the basics down, that's the place to start.

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plnewman
I did say "gross $60k", and I meant something more like "revenue" than
"salary".

Obviously there are expenses that come out of the basic fees, but when I was
doing this, the people I talked to at the lower end of the cost spectrum
seemed to operate without some of the expenses that came up (ie, home studio,
little/no advertising).

The point I was trying to make was, wedding photography is competitive but
potentially lucrative if you can establish yourself, particularly in markets
like SF.

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nhashem
I wonder if engineers are more susceptible to this situation, often because
our occupation doesn't require us to frontload with student debt and it's easy
for your salary to escalate within a couple years. In other words, it's very
easy to be a programmer in your mid-20s with absolutely no debt. Dating
someone whose debt situation is very different than yours seems likely.

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hnal943
Unless you're dating a doctor or a lawyer, I can't think of another profession
that requires you to borrow anymore than for an engineering degree (i.e. a
four year college education).

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cperciva
The article asks the question of when individuals entering a relationship
should bring up debts. Being a bit more optimistic, and hopefully more
relevant to the world of startups, I'd like to ask the opposite question: If
you're entering a relationship, when is the right time to mention that you're
rich?

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philwelch
After you're sure she likes you for reasons other than you're rich?

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cperciva
That makes sense to me, but many people advertise their income on online
dating profiles, so it doesn't seem to be a universal opinion.

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dman
Before opening the article I was expecting an article about US-China
relations.

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ww520
Most marriages are economically based, explicitly or implicitly. It's in the
evolution instinct of married people to have the best environment to bring up
kids, which means financial stability. Having huge debt would make you less
attractive since you will make the union's financial situation worse. The
other side being significantly well-off often mitigates the problem, so just
look for rich people to marry if one is deep in the hole.

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waldorfsalad
Okay, simple: how the f*ck do you run up $150k+ in debt and NOT KNOW THE
BALANCE? Continually amazed with people.

Makes a good point about the potential pointlessness (and lack of financial
feasibility) of higher education. Makes me question getting an MBA.

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sr3d
Answer? simple. $150K/4 = $37.5K/year, an average tuition of a liberal arts
collect. I went to Lake Forest College, 1hr north of Chicago, and this was
their tuition 5 years ago. Did I pay the full-price? No. I got a half-off
scholarship for getting a SAT score above 1,200. Simple. I only paid ~
16K/year (room & board included) for 4 years. But there were people paying the
full price. I hope they make good money to pay all that debts.

4 years went by really fast, and before you know it, you're in great debt. I
don't think that people are totally irresponsible. Here in the US you were
taught to at a very young age to "follow your dream" and the rest would come.
For a 18 year old girl or guy, being so young and naive but having no clues
about finance and the real cost of money (your life!), of course she/he would
make a decision of following their dream. However, undergrad debts are
understandable. If you make a wrong decision and can't get a job with a high
enough salary to pay back the debt, at least it's early in your life so you
can recover. But if you're 25 and want to further defer the real hard life by
getting a master degree of something you want (but probably don't need to),
and along the way get in tons of debt, then you're financially irresponsible.

Higher education should not be this big of a financial burden for students,
but it's pretty profitable and the US education system is still the best in
the world, so there's a huge premium to go study here. From my own experience,
foreign students make really good and conscious choice about where to go and
how to get a scholarship. A lot of my international student friends got full
scholarship to top schools, but this may not be the case for every one. But
they and their parents really come prepared to pay every dime for a good
education that can help hem make the most out of their professional life after
graduation. I was too an international student.

My point of view in life is: time is money, debt is negative money, thus
you're subtracting time from you life to pay for debts. And that's the real
cost of debt.

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TGJ
It doesn't matter what's going on outside the relationship, if you're not
communicating, it's not working. It really is as simple as that.

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kingkawn
US medical schools are now going around $70k/year including the costs of
living. sigh/lol.

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known
Is it applicable at national level? America's debt is 53% of its GDP.

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TheAmazingIdiot
To me, this is foreign. If you love somebody, and I mean _truly love_, it
doesnt matter how much money you owe, or what judgments are against you.

Those who I have been with (counting 2 now) I would have moved the world for.
I only left the first one because I didn't think she even cared I was there
(and her actions didnt show it).

If their marriage was a convenient way to get tax benefits and other marriage
related tax burden reductions, so be it. Enter as a business arrangement,
which is what he seemed to have done without understanding liabilities.

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rikthevik
Love is a very important part of a relationship, but it's not the whole story.
Many times we end up relationships with people who make our hearts flutter,
but who ultimately are bad for us. Marrying someone who is so deep in the red
is a really big deal. Some people are comfortable assuming a great deal of
debt - I'm not, and I could never be with someone who had that much hanging
over their head.

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mkramlich
On a related note, one of my projects is an effort to help ensure that more
people can acquire the benefits of a college degree but without having to
incur a large amount of cash debt or time debt. I'm sure I'll have more
details to announce here if/when it's further along.

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9oliYQjP
Why did you get downvoted to 0 with this comment? This place is getting
ridiculous with the down voting now.

