Saturday, May 06, 2006

My New Favorite Quote

People who are living beyond their means are going to have a harder time making ends meet than ever in history.

This remark was made by Rick Sharga, a vice-president of an online foreclosure marketplace called RealtyTrac Inc., as quoted in an article in today's New York Times headlined "Despite a Sound Economy, Many Feel the Pinch of Daily Costs."
I just had to laugh and see it as a sign of the times. To me, anyway, it would seem that "living beyond their means" and "making ends meet" are mutually exclusive things by definition. Therefore, for people who are living beyond their means, making ends meet is impossible, not just something that may be more or less difficult depending on economic conditions.
I guess you could read the comment differently, as defining "making ends meet" as "getting out of debt" or "ceasing to live beyond one's means," but it just sounded as if the living beyond means was an assumed ongoing condition within which you'd define some criteria that meant you were "making ends meet." And maybe that is how many people think-- as long as they can still make that minimum credit card payment each month, they're getting by just fine.


Dawn said...

" beyond their means are going to have a harder time making ends meet...."

It means if you live beyond your income you won't be able to live paycheck to paycheck.

Adam Nash said...

I wonder if what they meant included various forms of out of pocket "investment", namely mortgages, as part of the "living beyond their means".

Let's say you make $4000 a month. You could be paying $1500/mo. for a mortgage, and $3000 per month in other expenses. You are "negative $500" every month, but if you had enough appreciation on your home (more than $500 per month), it might work out in the long term.

I know that I certainly lived "beyond my means" in college & graduate school, since I required loans to get through. But I'm pretty sure the degrees paid for themselves in the long term.


Adventures In Money Making said...

i think people who make 4k/mo after taxes and spend 1500/mo can live comfortably. they have enough utilities, gas, car payments, food and entertainment also. plus saving for retirement. if they curtail a bit they should be able to live within their income.
if they've bought a home on a 3/1 ARM because they couldn't afford the 30 yr fixed payment[or they just got screwed by their mortgage broker] then when it readjusts upward, they'll have a tough time making the payment.

Anonymous said...

"People who are living beyond their means are going to have a harder time making ends meet than ever in history."

That describes a huge percentage of Manhattanites.