Personal finance tip No. 1: Stay married
Laura Rowley has put together a handy list of the personal-finance lessons to be learned from NYT writer Edmund Andrews' harrowing saga of mortgage disaster—told in his new book, Busted: Life Inside the Great Mortgage Meltdown, and in an NYT mag article last Sunday. They're all good lessons: Budget for the worst-case scenario, Know what you can afford, Call your bank and ask them to cut you off in the event you attempt a debit or ATM transaction and the account has insufficient funds. You know, stuff like that.
But I read a few large chunks of Andrews' book a month or so (I had a galley), and the main personal finance lesson I drew from it was, Don't ever get divorced.
This was partly a result of the way I read the book. For some reason I started somewhere in the middle. Andrews was describing his and his wife's difficulties in making ends meet, with details on exactly how big the bills were that they were having trouble paying. I did a little calculating in my head, and thought, Wow, I had no idea the pay was so low at the NYT. As I read on I finally figured it out. His salary at the NYT was fine: $120,000 a year. But he was paying out $4,000 a month in alimony and child support. That knocked him from affluent to what for Silver Spring, Md., where he and his new wife chose to buy a house, counted as downright poor.
Because their house hunt happened to transpire in 2004, the Andrews-Barreiros were able to borrow $414,000 anyway, and it is this crazy loan that creates much of the personal-finance drama in the book. But the proximate cause of Andrews' fall from affluence was divorce.
As for his book, I haven't read from beginning to end so I can't give a full review, but the parts I read were compelling, charming, and seemingly very honest. And the part where Andrews is interviewing Alan Greenspan about mortgage lending and lets slip that he has a subprime loan is pretty funny.
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1
Tip 0: one simply cannot take NYT (or any other paper for that matter) seriously.
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Lesson 0: low pay is the root cause of the newspaper industry decline - they are simply unable to attract sufficiently bright people, Mr.Andrews is a star reporter in a specialized field and he is making way less than average dentist.
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Regardless what particular moves the newspaper industry is making to avoid collapse it will all fail unless they will figure out way to drastically increase amount of money that could be made by good journalists. -
2
@qqi239: I'll gladly sign your pay-journalists-more petition. But becoming a journalist—even a star reporter in a specialized field like Andrews—requires a significantly smaller educational investment than becoming a dentist does, and is usually more entertaining work.
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I also don't buy that low pay is the root cause of the newspaper industry decline. During newspapers' heyday in the first half of the 20th century, journalists were paid a lot less (relative to other white collar jobs) than they are now. They generally didn't have college educations, either. -
3
@Justin - it was not a petition just a prudent observation. Say becoming a star journalist also includes lot of random factors like luck, being in the right place at the right time etc. What is the pay for a non-star journalist? So, there is no surprise anybody who is able to be an average dentist/doctor/engineer/lawyer etc would never go to the journalism, it is that simple.
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For me the heyday of journalism was in 1960-80s it was a pretty glamorous profession at that times - stars were making millions (e.g. Bill Moyers)
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And now we have people who were unable to figure out middle school algebra teaching us from NYT pages how to run the world.
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4
There is apparently a bit more to the Andrews story than has been divulged in the book.
http://business.theatlantic.com/2009/05/the_road_to_bankruptcy.php -
5
@qq and Justin: Speaking from direct knowledge, an editorial director in a specialized publisher outside of NYC - about $100K. But I get to work mostly from home. And new starting salaries are falling faster than housing prices (trying right now to help an experienced but out of work EIC take a job for what I made around 1988). And people pretty much do this because, well, that's what they want to do.
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I agree with Justin, it's not the quality of the content (although that has declined over the last decade). The changes in society are far beyond that. -
6
Isn't the real lesson "Don't Ever Get Married?"
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7
@pneogy: Your link led me to a blog with this comment about the whole affair:
Reminds me of that accident report in the Onion -
"See, usually, the vehicle's sudden-braking skid marks don't start a mere six feet from the concrete pillar," Mills said. "Usually, the vehicle doesn't have a gas tank held to its frame by a bungee cord and two leather belts. And, in almost all cases, the driver isn't halfway through the windshield with a half-bottle of Everclear grain alcohol in one hand and an electric nose-hair trimmer in the other."
Posted by: gcochran | May 24, 2009 2:56 PM -
8
@sisternumber1: That's funny, and a little sad.
- foxjust About to walk to LA Public Library for this http://bit.ly/7LgRu6 Am told only a nobody walks in LA - 1 day ago
- foxjust just took first ride on LA metro. Totally disorienting not to have car to park here - 2 days ago
- foxjust Thanks to Bama fans for reminding us we needed to buy TP! (Turns out we're fine on detergent). Oh, and nice game #ironbowl - 1 week ago
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