We sent in an offer of $460,000 and one day later got our answer: the sellers accepted.
The better way to think about the injustice of this story is to realize that his Realtor & Co. earned at least $27,600 (Six percent of the $460,000) for less than a day's worth of work.
Bob called back the next morning. “Your credit scores are almost perfect,” he said happily. “Based on your income, you can qualify for a mortgage of about $500,000.”
Translation as to what Bob was really thinking: "Based on your credit score, I can earn about $30,000 today, without blinking."
Realtors are the evil behind the mortgage meltdown. If this article doesn't make it obvious, I don't know what does.
Look, if Google earns x cents on a click from you, does it earn it on "less than a second's work"? It does not, because someone had to take the risk to acquire the necessary skills and contacts/reputation over a long period of time, had to set up an office and legal forms, had to acquire a rolodex, etc etc. There is a lot of risk involved. THe fact that the transaction itself, if sufficiently isolated, takes place in a blink so much as doesn't matter!
In fact, our system works such that people are not paid based on their (highly subjective) work effort but on result. Result in terms of what other people are willing to pay for your services. If you go down the slippery slope of "fairness" in pay based on effort, you will end up in pure, almost literal communism -- everything owned by the community, nothing for yourself, because there is no basis for judging effort from outside. Effort doesn't count, results do.
This is not sound logic. Did you get everybody in your real estate office to sign up for a YCNews account and upvote this comment?
The mortgage problem is resultant, largely, because of lack of information between buyers and sellers. Note that I didn't say lack of information between a homebuyer's Realtor and the seller's broker. In economics, we learn about the concepts of buyer's surplus and seller's surplus. In real estate, there is this third entity (usually colluding brokers, agents, etc.) eating away, often entirely consuming all potential surplus. Why else would this mortgage meltdown have happened?
People make decisions based on information presented to them. Mortgage brokers and their Realtor friends go out of their way to throw up as many brick walls and make the process as overwhelming and confusing as possible. If you're a Realtor, you surely are aware of the antitrust case against the National Association of Realtors:
Home buyers are usually required to sign STACKS of papers during closing. During this process, they rarely notice that one most important to the Realtor & Co which is the one they slip in there that states the "percent" that the Realtors are making and the "percent" that the brokers are making in the deal; this number is NOT mandated by any laws, but Realtors and Co. always give homebuyers the impression that it is; after all, all the other papers they're signing are supposed to be for their "protection". After all who would hire a Realtor who didn't claim to "be working for you"?
They talk dollars when it comes to house prices and percents when it comes to what they're making in the deal. This is evil, deceptive practice and it should be illegal.
I think most rational people would think twice about taking out a loan to pay five or six figures to somebody who calls shuttling around in an SUV and counting their riches "work".
I'm not even remotely "communist" as you seem to be implying; I simply think that this "rolodex" argument you're making is beyond outdated in the 21st Century.
After all, your risk-reward argument only makes sense if there's competition. And if you'll look over the DOJ case I linked to above, you will see that the National Association of Realtors does everything in its power to restrain competition.
As for the rest of your comment, please read my comment again. It says nothing about realtors about whom I know too little to say much. It is concerned with the meme that people seem to earn money "on a day's worth of work". I think it is in the same category as that investors earn money only by "skimming off" other people's "productive work". The transaction is only one moment in a long chain of preparation and risk. Whether it takes place over a second or a month does not matter. To make another outdated reference to the last century, Michael Jordan didn't earn his millions by winning this or that particular game for his team. It was years and years of preparation and taking the risk of ending up like the other 99.99 percent of ballplayers, i.e. with little money to show for his efforts.
The only job I can immediately think of which could fit the description of lots of money for very little work is that of Jamal's contestant in Slumdog Millionaire ;) And even there you can argue it is a long chain and that the money is earned through attracting the attention of many people.
They do provide valid services though: driving you and your family to and from many showings, talking to the owner/owner's Realtor, take care of the legal mumble jumble, provide info on the house's previous owner records, previous sale pries, insight into school districts, commute hours, community by-laws..etc.
House-hunting is certainly NOT less than a day's worth of work. If they end up not buying from him, all this time spent on working their profile earns him exactly $0. The goods that he sells are his time: time that he can't spend with another customer simultaneously.
Bob was an evil realtor; evil [profession] are evil. That's all.
If this bothers you (it does me), you should look at Redfin.com. They do realty for 1% each, rather than 3%, and can afford to because they do much of their work online.
I think the author's first mistake was not in taking out the subprime loan, but in entering a marriage without some kind of mutual understanding of how to manage the household finances.
One of the first things my wife and I did, after getting married (possibly even before), was to set up a budget, including line items for how much money each of us could spend without being questioned by the other.
this brings up an interesting point. Would you make your wife sign a pre-nuptial agreement before getting married?
I often see people who have gotten divorced sign a pre-nup, but people I've spoken with around my age group (20-25) seem to be adamantly opposed to a pre-nup.
Judges routinely invalidate pre-nups, especially if the marriage produced children. In the US, there is a curious legal fiction that child support rights "belong to the child" and thus cannot be signed away.
I don't know about you, but as a young female of the 20-25 group, if my husband made me sign a pre-nup before the wedding, it will pretty well signal the end of the relationship. It will be interpreted as a sign of "if you don't trust me with everything, i can't trust you with anything."
Yeah, I thought that too when I got married at your age.
When I got divorced 5 years later I found out some legal details that made me rethink that position. Specifically, I found that even though my wife was a reasonable person and our split fairly amicable (as much as these things can be) that I wasn't necessarily off the hook for alimony. According to my understanding of California law, the judge can look at my divorce case and if he thinks my ex's income is too low compared to the mine then he can award her alimony even though it was not requested by her.
That opened my eyes and I saw pre-nups in a new light: They are just writing your own personal divorce laws so that you can be sure they are "fair" in your own eyes--They are not a sign of distrust.
It's like signing a confidentiality agreement in business. One party isn't assuming you're going to break the agreement, they're just spelling out the terms so everything is on the table.
> if my husband made me sign a pre-nup before the
> wedding, it will pretty well signal the end of
> the relationship.
You don't seem to understand. The legal system in the USA is currently configured to crush fathers. A pre-nup is not a way to say, "hey, I want to be able to leave you and the kids and not pay a dime!", it's a way to limit the soul-crushing damage the legal system will do to Dad when Mom decides he's not making enough money and wants a divorce, and the kids, and the house, and child support, and alimony.
Sir, of course I understand the crushing realities of divorce. My original point is this : when you're 20, you do not consider divorce; when you're 20, you think marriage is forever.
I'm a guy in the same age group as you, and I totally agree. If I didn't trust my (hypothetical) wife absolutely, I would never marry her. When I decide to marry someone, I am not going to treat her like a security or an asset or some other financial instrument -- she's a human being. I think the concept of a pre-nup is evil and derogatory, even given the state of the current legal system. (I don't agree with the "the guy always gets fucked" BS either; my parents are divorced, and my dad got off just fine. He didn't even have a very good lawyer.)
I think, basically, people make dumb decisions when they should make smart ones. Buying a house, getting married, writing a book, etc. are not things that you can rush because you really want to get them done. They take time. The people that get screwed when doing these things didn't invest enough time.
"Absolute trust" is stupid and arrogant - you are not only saying you trust the other party (which is generally a good thing) but also that you couldn't possibly be mistaken.
I'm not certain I disagree here, but you can make an argument that you're optimistic.
>> When I decide to marry someone, I am not going to treat her like a security or an asset or some other financial instrument -- she's a human being
Historically, what has failed most often? Securities or human beings?
I'd bet on humans.
A friend's friend got problems a decade ago -- wife left him, his company crashed etc. A while later, he was diagnosed with whiplash (I think, could have been mild brain damage) from a traffic accident. He probably can't work hard again, but has managed to build quite a good life.
I can tell you that I had (amongst other effects) something like personality changes when I had a painless tooth infection for quite a while.
Things like that are probably more common than we think.
Even if you could guarantee your emotional state for years to come, I doubt you can plan for changes like that. Usually, we tend to think of people as too static.
Even if you could guarantee your emotional state for years to come, I doubt you can plan for changes like that. Usually, we tend to think of people as too static.
Sure. But is it a good idea to protect yourself from an unlikely event in the future at the expense of hurting your partner right now?
When I decide to marry someone, I am not going to treat her like a security or an asset or some other financial instrument -- she's a human being. I think the concept of a pre-nup is evil and derogatory
Well, what exactly is the "rationale" behind getting upset by a pre-nup?
A pre-nup means two things:
-- You acknowledge the very real possibility that your marriage might come to and end.
-- In case it ends, the guy doesn't want to part with half of everything he owns (and possibly alimony etc).
So, do you get offended because your guy "doesn't think it will last"?
When someone in a job interview asks you "where do you see yourself in 5 years", you probably think it's a silly question.
Do you honestly think you can predict how things will feel 5 years from now, let alone for the rest of your life? As Prince said, electric word, life - it means forever, and that's a mighty long time.
Or, do you get offended because your guy doesn't feel like he'd happily give you half of everything in case you do get divorced, because that obviously means he doesn't really truly love you, right?
As a man, you could turn the whole thing around and declare that any woman who declines a pre-nup is not worth marrying because she only thinks of you as a bag of money - a financial instrument, if you will.
To me, both of these reasons for getting offended by a pre-nup are just nonsense.
I know one who, along with her current husband, is raising her ex-husband's ex-wife's daughter. Mom is 27, dad is 25, kid is 12, and she's not biologically related to either custodial parent.
ouch. Yeah, getting into debt to pay for a day of partying is a stupid idea, especially in your 20s, regardless of if your marriage lasts.
[My will says that my burial/funeral is not to cost more than what i paid for my wedding, which, with rings, is less than a thousand dollars. With inflation, good luck to whoever is stuck with my dead corpse. Most likely by then the only thing $1000 will get you is a straw mat.]
The fact of the matter is that a pre-nup is invalidated simply by you being forced to sign it under any form of duress. You really love the guy, but he want's a pre-nup and you definitely don't, well if you have proof of that (witnesses, etc.) it's a cinch to have the pre-nup invalidated.
Also, to the people who've responded to you and elsewhere that prenuptial's should be forced by the government; well they're already invalid. Forcing someone to sign a legal contract to do something considered a basic human right (it's considered a social right to get married) automatically invalidates a prenuptial that has to legally be entered voluntarily by both parties.
Such ignorance of prenuptial law is probably why a huge amount of prenuptial's are invalidated by judges.
I believe 'we' (20-somethings) should be required to sign pre-nups by the state to receive a marriage license. Or a standard one should be provided upon marriage. It's silly to sign a legal contract with another individual (however in love the two are) without any concern over financial obligation. That's stupid, not selfish/"expecting the worse."
People change by health, hormones, situations, and children. That is a fact.
As someone not familiar with divorce laws and alimony, I was shocked to read that he has to pay $4k every month for child support. That makes a $120K salary almost a $50 - 60K salary after taking into account progressive taxation.
If my understanding is correct, the $4K is paid after taxes and the ex-wife pays no taxes on the money received. That is, he is going to pay $48K per year in child support but has to earn maybe $70K pre tax.
Not correct, the taxes are actually paid by the receiver and not the payer. If the receiver is in a lower tax bracket, then they pay taxes at that rate. This is basically all factored in to the process of setting alimony by the courts, so pretax and post-tax don't really make any sense here unless the tax brackets are different. Note, IANAL or an accountant.
Actually, alimony is taxable to the recipient but child support is taxable to the payer.
That is, if the $4K/month is actually $3K child support and $1K alimony, the father's taxable income will be reduced by the $1K, but he's paying taxes on the rest. The ex-wife will pay taxes on the alimony received but not on the child support received.
This is one of the several reasons why women seek child support rather than alimony in divorce proceedings.
eeeeh, "enjoyment / benefit" is sometimes true but not always.
Sometimes in a relationship both parties agree that it is best if one party (usually the mother) puts aside her career in pursuit of raising the children. This party is at a disadvantage after a divorce, and in some cases it may be reasonable to compensate for it.
Ideally this should be a tiered system when payments wind down over time (but usually isn't).
It could be that her ex-husband made so little that the added money wasn't relevant, and the author chose not to bring him into it. That seems reasonable to me.
The duration of alimony is probably very dependent on the state. One example that I am aware of is that alimony is typically paid for half the duration of the marriage. If his new wife is beyond that period, then she may only be receiving child support.
> "But with her take-home income averaging only about $2,400 a month, we didn’t make enough to cover our bills because my take-home pay was going straight to the mortgage."
What the heck are you buying if $2,400 per month can't cover your expenses after the mortgage payment is taken care of?
Loan payments, most likely. Too much money in car loans, credit cards, and the like are traps that too many people fall into. I personally cannot fathom why anyone would willingly take out a loan to buy a car that was not their first (used cars are not that expensive if you're willing to save for a few years), or why anyone would use a credit card without knowing they have the money to pay it immediately, but I do know that people do this.
They also had two kids. Kids are expensive; they genuinely require new clothing every year, lots of doctor visits, etc. Of course, if you're not too proud for it, you can get a lot of this stuff from friends and family with older children, but it's still expensive.
He said what she refused to cut back on, food, clothes, kids.
My reaction when I had some financial trouble recently was to quickly to cut back on food purchases and evaluate moving to a smaller house. However, fortunately I still have a positive cash flow.
I was surprised when he mentioned paying over $100 for cable/internet with all these money problems. If it were me, that would be the first thing to go and I'd move back to $5/mo dial-up.
Sounds to me like they were able to avoid any big costs (like house repairs), but their brains couldn't really understand the cost of recurring payments on so many small things.
If you're in the hole a thousand a month anyway, what's another hundred more or less? It won't solve your actual problem to get rid of it (unless you can get rid of enough of them to actually solve the problem), but getting rid of it may well affect your life enough to depress you such that you find it that much more difficult to think of solutions, etc.
I've been in that situation many times over the past twenty years (though never nearly to that degree!), and I don't regret spending $x when I was going to be short $(x*10) or more.
you have to think of the 10% cut as a 10% discount on your debt PLUS recurring interests. Heck even 1% matters when it comes to paying down mortgages and debt.
That's really fatal thinking. Actually, it's a well-documented psychological bias. To many people, a dollar earned != a dollar saved (or a dollar less in loss), although they are all conceptually the same.
A dollar earned is actually more like $0.60-0.70 saved after taxes.</pedantic>
Anyway, I know a bunch of people that think the same way. I knew one girl who basically couldn't afford to eat - she'd go hungry for several days at the end of each pay period because there was no money to buy food. (Not too surprisingly, she ended up with an eating disorder.) But she had more "stuff" - big screen TV, DVD-player, IPod, home entertainment system - than I've ever had. Her logic was that a few hundred bucks might by food for a couple weeks, then she'd just be hungry again. Or it could buy a big-screen TV, and she'd be hungry longer, but at least she'd be entertained in the meantime.
When she put it like that, it almost seemed rational. Being able to save and invest for the future is a luxury I have because I've never really had to want for the basic necessities.
I've never fully understood the way that some people go about entertaining themselves. I mean, I can't remember the last time I was bored. I'd almost go as far as to say that if you're ever bored, you're doing life wrong.
I can analytically get my head around why people end up in a mental state where they think that buying a television for entertainment is a higher priority than buying food - it has a lot to do with (IMO) the way the brain develops, and how that relates to culture. In other words, pattern recognition in the mind doing what it does best, over the course of someone's entire life.
The problem is that everything around you is fascinating. I guess it's not to most people, and I should just consider myself lucky that I never feel the need to buy a bunch of entertainment luxuries to keep myself entertained.
When she put it like that, it almost seemed rational.
Yeah, it does seem almost rational. Really, I guess it is rational, assuming one puts a really high value on being entertained constantly via external media.
Ahh, people's mindsets get me in a bad mood sometimes.
I think that's a luxury of coming from a socioeconomic class where your basic needs are taken care, with skills that are both intellectually stimulating and can make a living.
When you live in a suburb of Pittsburgh with a median household income of $23,000, where 20% of the population lives below the poverty line, and your day job consists of saying "Would you like fries with that?", and most of your friends are shooting at each other or getting pregnant, then maybe not everything around you is fascinating.
In my case, I was part of that socioeconomic class from birth to 16, but from 16-20 I was homeless, and from 20-right now I was very poor, far beneath the poverty line in the states.
I kept that sense of fascination, and I've met tons of people who are dirt poor, and have been dirt poor their entire lives, who have that sense of fascination. I've met fewer people with it in the middle and upper classes.
That's not to say that there aren't a whole bunch of very poor people who lack it. If I had to honestly guess, I'd say that it's somewhat related to intelligence, and how many different ideas someone gets exposed to while they're young, and that the percentage of folks who are fascinated by the world is approximately the same throughout classes, and that I just haven't met enough middle to upper class people in my adult life to know yet.
I really, don't think that it's a luxury of class. It may get affected by class, but I don't think that the effect is as big as you suppose.
That's the standard line, I know. But your comment about saving misses the point: I was talking about times and situations when you have no option to build savings; you can only choose to go into debt by amount x or amount x+x/10 (for example). In such a case, you cannot save your way out of debt. What needs to happen is a radical change to either your income or outgo stream; if you don't get that change, you're screwed, and it hardly matters how much, but if you do get it, then it won't matter so much if you went into debt a bit more before that.
A dollar saved is certainly not the same, conceptually, as a dollar earned. In particular, the act of choosing not to buy things can only save me up to my current income (in a given period), no matter how much I choose not to buy. So if I decide not to buy that HDTV, I can save $1500, and if I choose not to buy a new Mac either, I can save another $1500, but if my income was only $2000, it's hard to claim that I saved $3000 this period. Money saved is merely potential money, while money earned is real money.
As for the car loan: low interest rate, upcoming wedding, upcoming house purchase. If the money isn't needed, we can always pay off the loan.
More accurately, I wasn't going to argue with my fiancee over it, and she didn't want me to pay for it before we were married. She was worried about the reliability of her current car (I'd guess mostly needlessly), but since she is a social worker occasionally moving kids around and visiting rough areas, I don't blame her for that part.
That $2400 has to cover two adults and two live-at-home young children: all utilities, food, transport, education, property maintenance, out-of-pocket medical, and entertainment. (They each also have older children who, despite not living at home and the alimony, might need some support.)
I'm sorry to have to be the one to tell you this, but those promises fly out the window as soon as times get tough.
No matter what you think she thinks of you, when the kids come and times get tough, she will look at you and weigh having you around vs. having automatic custody of the kids + child support + alimony.
Aneesh: it's really not that hard. For two adults and three kids that is not much money for food, utilities (particularly heating + ac), internet, two cell phones, transport, clothes, pets and the inevitable accidents life throws at you, eg $35 to go to the doctor plus $50 for medicine for even simple illnesses. Don't mock them until you've tried it, particularly given how expensive groceries are on the E coast. My data point is that when I moved from WI to NYC my grocery bill for purchasing basically identical food rose by 130%.
Actually, this is precisely what they are not teaching in economics: That people are weak, stupid, and make mistakes. Instead it teaches that they are informed, rational decision-makers who carefully weigh their options and choose the one that maximizes "expected utility". Schmoo! This is why we are in this mess!
Wow, this article speaks more about the ruin caused by split marriages than anything else. Definitely motivation to stay in love and on the same page with my wife.
> Yet another smug boomer with an overinflated sense of entitlement...
...who, to be fair, made a very public "mea culpa" about his failures in personal judgment when faced with the possibility of buying a house he couldn't really afford.
I don't necessarily think this article was all that appropriate for HN, but I did think it was a compelling piece, because of the insight it offered into how even otherwise-rational people could make bad decisions about credit.
Exactly. $700 at J Crew when they were already up to their necks in it!? We're all suffering because of people like this. Baby boomers have screwed everything up, at last they're sharing some of the pain.
Ok, but knowledge of sub-prime lending == personal spending discipline, or it should. He writes about sub-prime loans and other "financial innovations", yet he fell for them hook-line-sinker. If you know what's going on in the world, you should know how you fit and how to maneuver within it.
There is a very big difference between knowing something and being able to act on it. By reading this forum, you undoubtedly know a whole a lot about entrepreneurship. Are you rich yet?
I don't write articles on entrepreneurship and technology startups, either, if that is what you are trying to say. I don't purport to be an expert on entrepreneurship through articles from an authoritative sources like the NY Times. It's a matter of credibility when someone who supposedly understands how a system works falls victim to that system by his/her own actions or greed. If PG did a startup tomorrow, attracted funding, and then burned through it by buying Aeron chairs and Nerf toys, how much would you believe in his credibility as a writer then? I would be a bit more cautious.
Would you believe Evan Williams when he writes about startups? He did his "10 rules for webstartups" (http://evhead.com/2005/11/ten-rules-for-web-startups.asp) and then broke all of them with Odeo, which, not surprisingly, failed.
Month after month, he was more aware than most how many people were gambling and (apparently) winning, and he thought that if they could do it, why not him? Turns out that it caught up with all of them, of course, but that must not have seemed immediately inevitable at the time.
Why did it never occur to them to just sell the house? That is what puzzles me most (among other things). It seems that having your own house is so important as a status symbol that all other concerns are minuscule in comparison?
Also, what happens if the bank you borrowed the money from goes bankrupt? Is there a chance they will just get to keep the house, because nobody will ever come round to claim the money? If so, it wouldn't be so bad after all...
When a bank (or other lender) goes bankrupt its creditors seize the assets, which include mortgages. So if you don't pay then the note holder will eventually foreclose. But occasionally the paperwork gets lost or screwed up and that delays the process. I've heard stories of deadbeats going a couple years without paying before finally being evicted.
My guess is by the point that sort of thing would have been a desirable remedy in their minds, property values had declined enough (especially in an area where housing was particularly inflated) that selling wasn't an option without owing money.
I had never seen that before, and honestly thought it was a warning about predatory lending...the person on the phone "you can do this" sounds like a drug dealer "just one hit".
Wow. I live in the Midwest so housing is dirt cheap compared to other places, but half a million dollars for ANY house seems insane to me, let alone this "small" one he's talking about. I don't have any sympathy for him.
I also don't understand how he could have "near perfect" credit score when he had thousands and thousands of dollars of debt with massive interest rates.
Just goes to show that your income doesn't make a whole lot of difference if you can't control your spending. I pay all my bills and save about 10% of my income making $40k a year. And I really do have a near perfect credit score.
The same house and yard that my aunt can't sell in central Illinois for $50,000 would be worth a good 200,000 - 250,000 in the area I'm currently looking in (Philly suburbs) and more then the $400,000 or so that my fiancee's brother paid for his place about an hour South of NYC. The .5 acres of land alone would probably be worth more then $400,000 there.
Credit scores will stay perfect as long as they are paid off. Greater debt with no faults creates better FICO numbers.
Seriously, you do understand the concept of different costs of living, right? Your astonishment at paying $0.5MM for a house is irrelevant; that's the going rate and probably cheaper than renting in that area.
The cost of a home varies a lot more between metro areas than rent does. Similar rentals vary about 4x between the most expensive and least expensive metro areas; home prices vary more than 10x between the most and least expensive metro areas. (Both vary even more between particularly expensive and inexpensive neighborhoods - the numbers are metro area averages).
I live in an area very close to there (still in the DC metro) which has houses which go for 400K and up, and yet I pay just over $1200 in rent. Renting and buying are often out of sync with each other, for whatever reason (in east Alabama a few years ago, it was the other way around; you could easily buy for less than rent).
Just me, but it's easy to find a three bedroom apt for less than $2000 around here.
However, after looking on Zillow, I find things have either changed considerably in the last year or I misremember, since I can see a bunch of places for well under $400K around here, now. So, never mind.
I think this article belongs to HN because it's about a smart expert in his field who failed hard because of irrational decisions he made :
It questions expertise we acquire thanks to our education and experience. Can you be smart enough to avoid stupid decisions other people do despite being an expert and not them ? The answer seems to be that it's not an absolute truth. That's one lesson he underlines.
I can relate to this (and a lot of people here too) because I'm becoming an expert (as in "focused") in web development.
I find it deeper than you describe it, having several approaches possible.
Finally it's very well written and entertaining too ;-)
My answer would be that statistics work for a population but not the individual case. I feel that getting married and having kids would make me happier - I'm sure others feel the same regardless of what statistics say.
My blood pressure went way up when I found out how brutally he is being raped by the alimony system. He'd be better off in a technical field where skills matter more than reputation; he could change his identity.
Assets earned during the marriage are earned by the couple and should be equitably split, but child support should be no more than 1/2 the minimum cost of raising a child (of course, if the father's not a prick, he'll contribute much more; but the govt. should not require him to) and alimony should not exist.
The injustice is when the court strips the father of custody and then forces him to pay child support. Child support should only be required if the father voluntarily renounces custody. Otherwise, custody should be split equally and no child support should be owed by either party.
Also, everyone would be better off if these contingencies were all written into contract before marriage/child birth. It would save everyone a lot pain. Unfortunately, the judicial system has gradually replaced our great tradition of contract law with arbitrary rule by judges, much to the loss of everyone.
I'd actually like to see pre-nups made into law. If you don't make one yourself, you get a pre-nup that says what already happens now when you divorce - but you have to sign it and acknowledge - "yes, I want to be raped in the ass if he/she leaves me". That might remove some of the emotion and distill a bit of clarity.
The thing is pre-nups aren't always enforcible. The major reason is that no one makes provisions for hitting the jackpot (either literally or founding a business that makes you rich), or that if one person does the partner can contest it in court as an unforeseeable circumstance. This usually ends up falling under the 'unconscionable' clause in the law.
Then there has to be full and/or fair disclosure (your spouse needs to know about that $50,000 you have put away). The other (possibly the easiest reason why prenups can fall apart) is that the agreement has to be entered upon voluntarily by both parties, so if your spouse only agreed to the pre-nup because you threatened a break up then the pre-nup is automatically void.
The sad thing is that if pre-nups were made into law then they would never be enforceable, because everyone would have been forced into them under duress. How can you voluntarily sign an agreement when it could prevent you from being legally married.
The other (possibly the easiest reason why prenups can fall apart) is that the agreement has to be entered upon voluntarily by both parties, so if your spouse only agreed to the pre-nup because you threatened a break up then the pre-nup is automatically void.
This is the heart of the matter. The courts have redefined the word "voluntary" in an unbelievably Orwellian way.
Agreed! A legal obligation to do a prenup would be like a law protecting you from the law... Perhaps you can scrap the laws about custody, alimony, etc. in the first place and let people figure it out by themselves.
Or you could just scrape the laws about custody, alimony, etc. and just let people figure it out for themselves. If the child is old enough (say >8 yo) ask them which parent they want to stay with.
Many, almost all?, people go to work for a company thinking that they'll spend a specified amound of time with it. Very few people that I know think that they'll spend their entire life there.
In fact in the financial industry it's a very accepted practice to jump around from company to company.
Even in the tech industry there are many people who graduate with a plan to work for a Google or Microsoft for a few years to get experience and then plan to go out on their own or to join another startup.
Contrast this with marriage were very few people go in thinking that their marrige is only a 4 year commitment and that they'll get divorced and trade up every 5 years.
It turned awkward when people started taking considerations other than business into account, such as "love". I believe Wolfram Alpha has an article on it.
It's usually seen as a matter of trust. I consider the phrase "I trust you absolutely" not only pretty stupid but incredibly arrogant - you are not only saying you trust the other (which is good and reasonable) but you are also saying you could not be mistaken (which is foolish). Trust, but be prepared for being wrong in doing so.
My understanding is that alimony is quite distinct from child support. Rather it is payments made directly to a former spouse and harks back to a time when women had no way to support themselves after a divorce (they could not work and probably had little chance of remarriage). So the idea was that the alimony would continue to support them as if they were still married.
Actually, child support is also payments made directly to a former spouse. While in principle it said to be for support of the children, there is no requirement that it be used for such purpose (let alone an enforcement mechanism).
This is a problem. I'm guessing most dads would give any amount for their kids, if it was guaranteed to go to the kids. There has to be some type of enforceable method to track payments and how they are used for the benefit of the children.
I guess that's allowed so that a certain class of spoiled American female can live the archetypal slut's dream of fucking an alpha male while a beta male provides for her.
I think most states stop alimony when she remarries, though, which is why women who want to play that game will have live-in boyfriends but not remarry.
> how brutally he is being raped by the alimony system
What I don't understand is how we almost never hear of such people packing up and moving to some country which is hostile to US interests, or simply has weak record-keeping and is thus friendly to those who want to leave their past behind. Are all such countries mournful hellholes to live in? Surely not.
Seriously, if I were ever sentenced to the perpetual confiscation of over half of my income, I would run off - doesn't matter much where to. Perhaps the Somalian pirates - or North Korea - are hiring? I also recall once reading that France will not extradite a French citizen - perhaps you can become one? (They might still allow American debt collectors to find you, however. Does anyone know?) Seriously, just about any life is better than being a part-time slave, which is what such extortion amounts to.
A) You're thinking of the Foreign Legion. Go look it up. A few years of military service and you're in.
B) When you get married you're making a very serious promise to share everything and build a life together. The state provided default contract for a marriage is very clear about the separation terms up front. If you don't like them, then negotiate a pre-nup with your spouse.
A) The Foreign Legion has much tighter regulations now, and is no longer suitable for its traditional purpose of providing new identities for those with something to run from.
B) US courts routinely and capriciously invalidate pre-nups.
I would argue that he is a full-time slave. Part of his time goes to pay for his previous marriage, the other part for taxes, and the final part to the banking system.
Funny how the notion of simply paying back your debt becomes "enslavement" by the "banking system" in the minds of people these days. t's as ridiculous as a fat person blaming the food companies to make it easy to overeat. The author of the article is commendable for avoiding these loaded terms and blaming himself rather than circumstances or even other people. It's a trite phrase but still true that responsibility and prudence is the flipside of freedom and risk-taking.
Oh, but if you get a loan at 10% or 15% interest and are late on a different loan you can get a universal default where your rate is doubled to 20 or 30%. Also the credit card companies have successfully lobbied the government to make it harder for consumers to erase these debts with bankruptcy.
That difference is mostly irrelevant. Slavery entered into with consent is still slavery. The key part of slavery is not the path of entry, but the path of exit, in that you don't get to exit.
There is very little functional difference between this guy and a bonded laborer from pre-independence India.
Would the laborer have been transported, on such a long voyage, without the reasonable assurance of payback? If they'd been left behind, stranded far away from the "land of opportunity," would they have been better off? I'd guess no on both. There's a reason immigrants flocked to America, event with a pledge of service.
So quit with this slavery nonsense. Slavery is not slavery when opted for, in full knowledge. Likewise, honest mortgages are no more slavery than education loans.
You are suggesting that available of opportunity and future outcome make slavery ok. I do not believe that. I guess we just have fundamentally different world views.
Honest mortgages and education loans are not slavery. Intentionally ignoring checks to economically subjugate someone... I am not gonna call that slavery but it's really not that far from it or at least thats how I see it.
> If they'd been left behind, stranded far away from the "land of opportunity," would they have been better off?
got to do with consent?
That apart, informed consent cannot nullify a crime. That is a well accepted principle. You cannot give informed consent for murder and such stuff. There is a libertarian school of thought that wants to change that but I don't subscribe to that school of thought. Slavery under consent is just as much a violation of human dignity and just as much a crime as far as my views are concerned.
That apart, informed consent cannot nullify a crime. That is a well accepted principle. You cannot give informed consent for murder and such stuff.
If there's consent, there's no crime, though. You can't give informed consent for murder because if you gave informed consent, it's not murder, but "assisted suicide" or some such. Current law has lots of victimless and presumed-victim crimes, it's true, but I don't subscribe to that school of thought. :)
On the other hand, the Libertarian definition of "consent" is repulsive to me. From their point of view, I "consent" to spend my prime waking hours working on things other than my own (non-monetizable) inventions. Bullshit. It isn't consent unless I have entirely unconstrained choice, and the need to pay for food and shelter is every bit as much of a constraint as the laws of a brutal dictatorship. And I simply don't care if basic goods are expensive because an evil central planner priced them nearly out of my reach, or whether the market had bid them up. The net effect on my life is entirely the same.
Screw Libertarian "consent." Screw their "non-coercion." They are Orwellian concepts: their in-practice meanings in that ideology allow for the exact opposites of what those words mean in everyday language to slide through and flourish.
The need for food and shelter are not things that other people impose on you; you'd have those needs even if you were the only person around. Just sayin'.
> you'd have those needs even if you were the only person around
This is only partially true. Food (and, due to the existence of land ownership, shelter) is more scarce today (in the sense of requiring more effort to obtain) than in the age of hunter-gatherers.
Not to mention, the need for "shelter" in a heavily populated world implies as much the need for protection from other people as for protection from the elements. Thus, in a very real sense, it is a need imposed on me by other people. Even the need for protection from the elements falls into this category. If there were few enough people, everyone could (theoretically) live comfortably in those parts of the world which have a temperate climate year-round.
One solution would be to put an end to usury. Houses, cars, etc. will have to become far more modest, but in the end they will be affordable without debt slavery.
I live in a house without having debt. I could also pay cash for a car.
People should have the choice to borrow money from other people, and the people lending it should be able to make enough money to make up for the risk of the people they lend it to not paying it back. I don't think society needs to change, though.
Guys who seriously consider moving to somalia or north korea to avoid alimony payments usually don't have to worry about getting married in the first place. It's hard to meet a spouse in your parents' basement.
Well, then, I guess the question is whether those two are the only places he could have mentioned (fitting his criteria of not being particularly friendly with the US).
They are the two most absurdly obvious ones. Finding foreign havens which are of practical, rather than rhetorical use requires research: laws change, treaties are signed, armies invade, etc.
I think $4k a month isn't overboard for 3 teenage boys, especially if you factor in school & health care. As for the Alimony, it depends, if the wife had stayed at home for the past 21 years to raise the children and has no skills/experience to fall back on to support them herself, then yeah, he needs to support her as well as pay the full cost of raising his sons.
I think it's a sad state of affairs in divorce courts and that fathers usually get the short end of the stick, too
But I don't understand why cjbos is getting downmodded for making a valid argument that $4k isn't that much money to raise a 4-person family.
IF the author points out that his ex-wife is now re-married, or is working and bringing home more than $4k blah blah blah, then yes, evil witch, bad system. But let's not jump to judgment here, guys, especially when the author himself hasn't vilify this woman.
With all due respect, if she's not working, _why the hell not_? She has custody of her children. That doesn't mean the man in the marriage should be stuck paying her total living expenses.
Yes -- but he should be left with $2777 per month to live on? You basically can't live on that sum of money on the east coast unless you want to live a collegiate existence.
$2777 take home equates to about $47,500 gross per year (adding the taxes paid back in). The per capita income in New York state in 2005 was $40k. I suspect now it's around $43-45k.
I think $4k a month isn't overboard for 3 teenage boys, especially if you factor in school & health care.
Health coverage should really be provided by the government, but that's a separate issue. Also, individual health insurance on teenage boys is going to be cheap: closer to $150 per month than $1000/month.
School is provided by the government, for 12 years. College, on the other hand, is ridiculously expensive, but if the government isn't forcing married couples to pay for it (I know some $100-300k couples who paid nothing) it doesn't have a leg to stand on in forcing divorced parents to pay for it.
I'm afraid so. How often do the courts grant the father custody? If the mother can't support herself and them, then they should go to the father, end of. But for some mysterious reason that almost never happens...
Child support should represent the minimum acceptable contribution of the non-custodial parent (father, in the vast majority of cases) to the child's welfare. Should he contribute a lot more, in cash, gifts, and college support? Absolutely. I would. However, the government shouldn't require him to do so, and the spending should be at his discretion. Right now, that freedom is completely taken away. The custodial parent should not be getting a huge check and the freedom to spend the money however she wants. If I end up having a kid with a wife who divorces me to live it up with an illiterate biker, those CS payments damn better be going to the kid's college, not her beau's lottery-ticket budget.
It's a bizarre inconsistency. Parents can stay married and financially neglect their children. They can make $300k combined per year and still refuse to pay for their kids' college. Yet, if they divorce, the one parent who rarely sees the kids (usually father) is forced not to pay up merely to the minimum level of decency, but far beyond that if he's "rich" like the article's author.
Of course you pay child support if you fathered the kid, regardless if you married the mother or not. It's the whole point of Maury Povich "You Are Not The Father" episodes.
Yes there are time and opportunity costs paid by the custodial parent. However, a custodial parent also gets significant benefits that the non-custodial parent doesn't get. (Otherwise, why fight for custody?) Surely it's fair to take those into account as well.
The counterargument says that a marriage is basically an agreement where the woman agrees to lend her womb to a man in exchange for him supporting her and her children.
That's way too sexist for me (if that's what marriage is, then we should change it,) but I'm still not convinced that a man should be allowed to leave and only provide half the minimum support for his children. It seems like the woman is seriously getting screwed in that situation: she has to raise the kids on her own AND find > 1/2 the money to support them. Nobody gets married with that understanding, and nobody wants to.
I think the standard suggestion amounts to women generally wanting to find a strong/smart fellow to contribute genes, and then a reliable sucker to raise the resulting children. So "bearing children with" and "having a relationship with" might have very different types of men as an ideal.
> If she thinks he might be a shitty father who only contributes the minimum, then she shouldn't marry him or have kids with him.
The law frequently provides protection for people who enter certain contracts, even when they ought to know better. For instance, if I loan money to someone who then goes bankrupt, I am entitled to some of their property. Even if it was a really stupid loan.
In this particular case, women aren't particularly good at determining whether a potential husband will turn out to be a scumbag, so it makes some sense for society to protect them against that possibility. (Actually, men aren't very good at determining whether a potential wife will be a scumbag either, so society should probably protect them, too...)
Or, perhaps, government should simply let them figure it out by themselves. And by the way, loan provisions are not mandated by government but negotiated up front. If you make a non-recourse loan, you won't get access to the borrower's personal assets even if his business goes belly-up.
> And by the way, loan provisions are not mandated by government but negotiated up front. If you make a non-recourse loan, you won't get access to the borrower's personal assets even if his business goes belly-up.
I did not know that. Admittedly, I don't have any examples that work quite as well. Maybe medical malpractice... or is that just a breach of contract?
it just shocks me when normally intelligent people get into some sort of dream state and think they are entitled to something they clearly cannot afford. I make more than $2777 or whatever take-home pay this guy had after his alimony payments, and my wife and I live in a one bedroom condo we bought for $130k, and our mortgage is a little less than the same size apartment in the city we live in would cost. but this guy shot himself in the foot and bought a house that was clearly more than he could afford, and that is just basic math. if he had been honest with himself, and done the math, he wouldn't have gone broke. glad he is doing well with the book though.
The better way to think about the injustice of this story is to realize that his Realtor & Co. earned at least $27,600 (Six percent of the $460,000) for less than a day's worth of work.
Bob called back the next morning. “Your credit scores are almost perfect,” he said happily. “Based on your income, you can qualify for a mortgage of about $500,000.”
Translation as to what Bob was really thinking: "Based on your credit score, I can earn about $30,000 today, without blinking."
Realtors are the evil behind the mortgage meltdown. If this article doesn't make it obvious, I don't know what does.