unfortunates....constant poor decision making or bad luck?

[Silver Bullet]

What I've observed in my own extended family is those without high school degrees seem to have permanent "bad luck."

[telewinz]

Although I am probably more anti-religion than pro-religion, I do feel that the Christian faith that's practiced in this country does provide a person with "winning" values.  As always the spirit MAY be willing but the flesh is weak.  I think heaven may be just a relief (death) from a person's self-made hell here on Earth

[Werewolf]

I think heaven may be just a relief (death) from a person's self-made hell here on Earth

MAN! That is one depressing thought.

[Brad Johnson]

As a real estate agent I see it every day. People will try to buy a house, proclaiming that they have had a little bad luck. BS. Their problem is that they make terrible financial or social choices. Most of it has to do with either a "living in the here and now" mentality, the simple selfishness of living beyond your means, or egoistic social risk-taking.

When you see a couple of cell phone charges, a vehicle repossession, a years worth of late pays on their electric, water, and gas bills, that's not bad luck. That's crappy decision making. Bad luck is a car wreck and the associated high medical bills. Bad luck is losing your job because the plant you worked at burned down. Bad luck is facing a crisis beyond your control. Buying a truck you can't afford, charging up $500 on your cell phone text messaging your friends, or just not paying your bills on time is nothing but oblivious stupidity. Being thrown in jail because you knowingly walked into something that was illegal, unethical, or both, is, well... it's just dumb.

And then people gripe to high heaven when you tell them "No". Well, sorry. Why do you expect preferred treatment when you have a verified history of being irresponsible, unethical, or criminal? Get over it. And start paying your bills and taking a little personal responsibility. Prioritize and be proactive. And think!!

Brad

[Matthew Carberry]

Once again the sleazy real estate agent beats the shyster mortgage banker to the punch.  People come to me and are upset that they have to pay off their collection accounts before I can even consider setting them up with financing.  Heck, a co-worker had a guy who had to do a cash-out refi to pay off some bills, which included an earlier second mortgage he stopped paying because "I thought the payments were too high".  I'm not sure if you technically should need a high school diploma to realize that debts you accept you actually have to pay back, especially when your HOME is on the line. :/

I'd add that in the one area of life I do know about, property ownership, there is definitely a mindset issue at work.

I used to work construction with a buddy of mine and we have spent over a year trying to convince one of our framers to buy a home.  This guy has been building houses for years, he has the skill set to do almost all the construction and maintenance himself, and what he can't do we and our subs can.  He has a pile of cash from fishing, makes good money building and we were going to owner-finance him the dirt and materials at more-or-less cost.

He would almost bite time and time again, we would lay out the numbers and explain the benefits of home ownership or other investments, but in the end, the idea of owning, which no one in his family had ever done, scared him to death.  So his fishing money keeps going into his race car, not into a home or other investment and he keeps living paycheck to paycheck with nothing for the future.

He's getting older and he knows it, he knows he won't be able to earn a living on the strength of his back forever, he even admits he needs to get something set up for the future.

But he won't make the step.

That's the mindset that ends with people depending on their SS and public assistance to survive their old age, and leads to them voting for things that cripple our economy and the future for young people.

[Brad Johnson]

Once again the sleazy real estate agent beats the shyster mortgage banker to the punch.

I'm not sleazy. At least not until after I've had my coffee...

Brad

[The Rabbi]

As a real estate agent I see it every day. People will try to buy a house, proclaiming that they have had a little bad luck. BS. Their problem is that they make terrible financial or social choices. Most of it has to do with either a "living in the here and now" mentality, the simple selfishness of living beyond your means, or egoistic social risk-taking.

 That's crappy decision making. Bad luck is a car wreck and the associated high medical bills. Bad luck is losing your job because the plant you worked at burned down. Bad luck is facing a crisis beyond your control.
Brad

Sorry, Brad, I have to disagree.  People are in car accidents and lose their jobs all the time and they don't file for bankruptcy because they have contigency plans.  They have money in savings, they have a line of credit they can draw, they have insurance to cover losses, etc etc.  So the cirucmstance was bad luck, but the disasterous effect on the person is his own making.

One time in the mortgage biz I had a client,a couple, who had gotten their downpayment money as a gift.  OK.  The wife got laid off so the deal was on hold.  She found a job about 6 weeks later and when she told me I said, great let's go ahead with it.  THey didnt have the downpayment money.  They had spent it because she was laid off.  The husband had a decent job as a truck driver.  They made plenty and didnt have that many debts.  But the idea of cutting back on their lifestyle wasnt in the cards.

[Guest]

Making notes..

Ok, I am:

Lazy
Making bad social decisions
Irresponsible
Stupid
Watch too much television
Have 4" fingernails and a Lexus

Okedoke.

Well, I have to go make a meal out of over salted processed food and then have my nails done.

[thebaldguy]

There is such thing as bad luck, but bad decisions are far more common. The people who have more money in tattoos and body piercings than in retirement plans. The people who outspend their earnings on toys. The people who buy more car and house than they can afford. They feel that someone else will have to take care of their financial needs as they get old.

These are the people who will be screaming for help from the government (our tax dollars) when they get old. Why do I have to take care of these stupid people? House them in barracks on old military bases and feed them MREs. One of these stupid people claimed that was cruel treatment. I pointed out that that's how I lived while I was in the army, and I didn't hear her complaining about my treatment then. If that's good enought for our soldiers, it's good enough for financially irresponsible and stupid people.

[Guest]

Ok, I'm lying. I'm writing letters to counties and townships to make them stop charging illegal fees and imposing illegal waiting periods for purchase permits. And we're having left over 6 bean soup.

[Guest]

Aha!

I have both a navel ring *and* a shot gun!

[grampster]

Any ham in the bean soup?

[Guest]

I don't eat pork. I made it out of stock I made from the leftover Christmas turkey.

I mean, I bought it at McDonalds.

[Brad Johnson]

So the cirucmstance was bad luck, but the disasterous effect on the person is his own making.

Rabbi..  That was actually what I was trying to say, I just didn't do a very good job of saying it.

Brad

[Felonious Monk/Fignozzle]

Hey, this is no indictment on you, Barbara.  I was declined to purchase a home recently, because my credit rating unexpainably (at least, none of the big 3 agencies nor 2 other 'credit repair companies' could tell me why) dropped over 100 points AFTER I sold my home in TN and paid off all consumer debt, while incurring NO additional debt.

Since I'm now in a legal battle with the employer that I moved to Alobammo to work for, it's a blessing in disguise that we did NOT buy a house here, since we may wind up relocating again.

Just re-read that.  It's been a hell of a year.

Nevertheless, we're still at a loss as to how we lost 120 points on the rating by eliminating all consumer debt.
Everything is not ALWAYS direct cause & effect.

[Guest]

I don't really feel like it is. I live my life the way I think is best. I'm also not going to pretend life is all sunshine if you work hard and don't take trips to Cancun.

Realistically, though, I'm about one serious illness or job loss from real trouble and figure it'll be like that for the forseeable future.

[grampster]

Fig:  Credit scores are a puzzle to me too.  I have worked for many years.  Borrowed more money than I care to think about and paid it all back either absulutely always on time or early.  Over the last 5 years I have worked to get out of debt and only owe a small amount on my home mortgage and a little bit to my credit union for a boat my kid bought and then he lost his job.  (sigh)  I use a credit card and pay off the balance each month.
SWMBO has not not had a paying job in about 40 years.  The money she has to do her thing with comes from my paycheck.  Her credit score is 50 points higher than mine and mine dropped 20 points from last year.  Go figger.

[Brad Johnson]

I was declined to purchase a home recently, because my credit rating unexpainably (at least, none of the big 3 agencies nor 2 other 'credit repair companies' could tell me why) dropped over 100 points AFTER I sold my home in TN and paid off all consumer debt, while incurring NO additional debt.

A big chunk of the "why" was that you suddenly had no home and paid off a bunch of debt. As silly as it sounds, this will key a sudden drop in your credit score because this tactic is common with people who are in immediate financial trouble (i.e. - long term problems are just around the corner). The computer sees the action and responds with an immediate drop in your score. Keep your nose clean for 3-6 months and your score should increase markedly.

Also, you will score lower with NO debt than you will if you carry a small balance on something. Pick a credit card (or even two) and carry a $75-100 balance monthly. I know, sounds stupid. But I don't make the rules, I just gripe about 'em.

Brad

[Lee]

"The older I get and the more I observe disadvantaged (poor?) Americans, the more I come to believe that the healthy, mentally fit poor Americans are nothing more than victims of their own loose grasp on reality."

I think that's true overall...but reality is relative.  I believe that success requires at least one od two things: 1) A good family (or mentor) that gives you a postive head start or 2) an exceptional personality that includes a desire to always learn and improve.  Someone who is on the right track financially at the age of 21 will nearly ALWAYS fare better than those who aren't.  Kids who are "raised" by adults with poor life skills will likely suffer the same condition unless they are bright enough and motivated enough to overcome their poor beginnings.  Poor decision making is very often involved, but sometimes those decisions are forced by economics.  Nearly everyone needs a car to get a job, and most people can afford a junker car.  That doesn't mean they can afford $200 a month for insurance.  the choice to drive that uninsured car is not a smart one, but can be the only one for some folks.  
Savings are still the key to escape poverty, always has been and always will be.  You put back that money before you get it, and you pretend it isn't there.

[Lee]

Not to stray from the topic...but has anyone seem the PBS documentary "Country Boys"?  It's an interesting show about two teenage boys growing up poor in Kentucky.  It's a very interesting show, that  is both heart wrenching and uplifting.  It made me think A LOT about this very subject, and made me appreciate what I have, and the people who helped me get here.

[Felonious Monk/Fignozzle]

...people start life at different places on the track.  Some graduate from college having had mom or grandpa or someone pay for it all; some wind up a hundred g's in debt for their education.  Some are given a home or a downpayment when they marry; others are in their 30's or beyond before owning a home becomes an option.

[telewinz]

One "explanation" I have often heard is "my parents did it that way" or "it's how he/she was raised".  Neither "reason" has card blanc justification.  I am amazed at how much my brother and sister (and myself) constantly do things differently than my parents.  They were church going, now only my sister attends church my brother and I stopped going when we became 18 and moved out).  They were not risk (career moves) takers, my brother and I are.  All 3 of us are fiercely independent, we RELY on no-one!  I think it all revolves around a person's mental health and intelligence.  The best thing to happen to central West Virginia and other poverty areas in this country is satellite TV.  At least the children are EXPOSED to what a successful life is like for the majority of Americans and maybe can opt to leave home when the time comes.

[The Rabbi]

I was declined to purchase a home recently, because my credit rating unexpainably (at least, none of the big 3 agencies nor 2 other 'credit repair companies' could tell me why) dropped over 100 points AFTER I sold my home in TN and paid off all consumer debt, while incurring NO additional debt.

Felonious, you have given the reason yourself.  You sold a home in TN and moved.  The credit agencies understand that a person would have to be seriously judgement-impaired to do that and so a worse credit risk.  If you had sold the home in AL and moved here, your score would go up by 100 points.  If you sold the home in NY and moved here it would be 200 points.  And if you sold it in CA and moved here, you'd win the trifecta with oak leaf clusters.

[brimic]

...people start life at different places on the track.  Some graduate from college having had mom or grandpa or someone pay for it all; some wind up a hundred g's in debt for their education.  Some are given a home or a downpayment when they marry; others are in their 30's or beyond before owning a home becomes an option.

And some people are dealt a winning hand and still lose out of sheer incompetance. A college girlfriend of mine had her tuition and room and board paid for by her parents along with a pretty fair monthly check from them for spending money. Right out of college she was hired as a technical writer for $30K a year (not real bad pay 10 years ago) with the money she made she still maxed out 3 credit cards and could barely make the monthly payments on them because she spent most of her money on video gambling machines at the tavern across the street from her apartment. From what I've heard from people that I know that know her, she's still in the same situation 10 years later.

[Matthew Carberry]

Yep, cedit scoring is wacky.

One of the worst things people can do is pay off all their cards and then close the accounts.  No active credit means no good credit means bad scores.  They should leave them open, even with no balance.  Old credit is better than new credit.

Parents,

If you are trying to instill fiscal discipline in your children, recommending they not take out any credit and only pay cash is counter-productive to their future financial well being (and home buying ability).  The optimum mix seems to be 3-4 lines of credit with the holy grail being a home loan, a car loan and a couple low balance, revolving credit cards.

Of course, all accounts need to be paid on time, which means no 30 day or greater lates.  Even if you pay on time, don't carry balances over 25% of the limit.  I've seen folks who pay everything with a mileage card then pay it off every month actually get dinged because at the moment I ran their report they had the balance up.

Barbara,

I hate to sound cold but in general, in my experience, in my own life and the financial lives of my clients, bad decision making and an unwillingness to take advantage of available resources to learn the right choices to make has everything to do with a lack of financial security, if not success.  I started out making bad choices and have been digging out ever since.  My unwillingness to save led to me becoming overextended when things beyond my control did actually occur.  My unwillingness to live more simply than I do has slowed my recovery.

It ain't nobodies fault but mine.