The Syndrome of the Sidewalk...

[MJ DeMarco]

Read this article through a Fastlane lens...

Notice any common denominators?

Sidewalk... Spend everything you earn. Lifestyle improvement. Keeping up with the Joneses. Boats, cars, oh my!

Silicon Valley Homeless Feel The Grip Of Recession's Long Reach

Together, they brought home more than $100,000 a year, she says.

They owned a speedboat, three cars and a 3,200-square-foot home on a quarter-acre lot. Tall, slim and outgoing, she was a Girl Scout leader. She and her husband both coached softball. They took their three children on annual vacations to Disneyworld.

"We lived pretty much the American dream," she says.

Her explanation of what happened ... "Life Happened"

Uhh... no... how about you spent everything you earned??? And then more!

She specialized in marketing customer relations software, used by businesses to track interactions with customers. During much of the 1990s, she was bringing home $150,000 a year. One year, she earned $300,000. This was how she was able to buy a house in Menlo Park and put the BMW in the driveway.

She was spending with abandon, going out to eat for nearly every meal and often taking her colleagues along. She favored swanky Italian restaurants and high-end seafood places, where the tab for six or seven people could reach $1,000.

She got used to relying on her expense account. She was clueless when it came to managing her own funds, she says, and overwhelmed by the imperative to succeed -- sleeping little, drinking much, working virtually around the clock.

"There's a lot of stress," she says. "You have to be better, produce more. The pressure is just immense."

Once again the Sidewalk proves that financial discipline is blind to income.

If you're earning $300K/year and your spending $400K/year, guess what? Yea, you'll end up at a homeless shelter eventually.

Fastlaners would be saving 50% of it so they could retire decades early. Sidewalkers? Nope ... lets buy another car and upgrade the house. :shruggie:

 

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[kwerner]

I can't help but think that this post was inspired by the guy that asked if he should buy a Gallardo on a < $100k income. =)

 

[cliqflip]

Lol, sure does sound like fun though :

 

[ashj1893]

Shit, I can only imagine how these people might feel after having a bit of money and then losing it all......similar to my situation, except I've never had anything before....

 

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[TheDolphin]

She specialized in marketing customer relations software, used by businesses to track interactions with customers. During much of the 1990s, she was bringing home $150,000 a year. One year, she earned $300,000. This was how she was able to buy a house in Menlo Park and put the BMW in the driveway.

She was spending with abandon, going out to eat for nearly every meal and often taking her colleagues along. She favored swanky Italian restaurants and high-end seafood places, where the tab for six or seven people could reach $1,000.

She got used to relying on her expense account. She was clueless when it came to managing her own funds, she says, and overwhelmed by the imperative to succeed -- sleeping little, drinking much, working virtually around the clock.

"There's a lot of stress," she says. "You have to be better, produce more. The pressure is just immense

Yep,

Classic wants overpowering needs scenario, technically, we can all live on rice and beans if we had to, over half the world pretty much does. The American spend on credit and spend what you make mindset has been the fuel for our economy for decades. Our own government does'nt even check it's spending and prints money like a drunk sailor drinks beer. The only thing keeping us from economic meltdown is our status as global currency, which will one day end. However, I'm off track, the couple you mentioned would have done well to realize everything ends, good jobs, great businesses, great demands, etc. and spend like they were making 50G's while investing their returns in a business that would replace their incomes and provide income passively and in larger portions. Great lesson!

 

[BeingChewsie]

I read this story yesterday and thought the same thing. What it also proves is that money won't help you, if you won't help yourself. If you won't take action, than it doesn't matter if you only have $1.00 today or $1 million dollars (as one guy in the article did!, He still landed in a homeless shelter).

 

[DavLung]

this is so depressing... i hope they find the strength to put the past behind them and keep going. These people were at the top of their game.... "degree in electrical engineering from Duke University," executives... I mean come on, you were great before, you can be great again. But that's easy for me to say, I couldn't imagine what it would be like, the effects psychologically and mentally to have everything turned upside down.

 

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[Simon Ashari]

One wonders whether they have truly learned their lesson or whether they will just do the same thing again.

History has a great way of repeating itself (even if an event only happened 4-5 years ago).

-Simon

 

[BeingChewsie]

99% will do it again. Not doing it again is a constant and ongoing process, most will slip right back into old habits. It is a lot like drug addiction, your chance of relapse, really really high, unless you work at it everyday...for the rest of your life. Being recovering sidewalkers/slowlaners my husband and I have to work really hard to not fall back into the trap, it scares the hell out of me. You can't allow yourself to run on auto-pilot, choices and decisions that were once automatic can no longer be so. Most people simply wouldn't want to go through the work of changing so radically and then continue going through the process of lifelong maintenance. Nope, most people will get a little cash and fall right back in.

 

[hedgehog757]

As MJ said, "if you can't pay cash for it, you can't afford it!" and I have to follow that advice much more now than I ever did before. But the thing we all know about moving from the slowlane into the fastlane is it is not easy. We all have to keep striving for what we want because if it was easy we would all be fastlaners and there would be no real benefit to it as there would be no one else out there to help support the work we do.

 

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