Carol Gould
Had anyone looked at my life at 30 they would have said I was the most prudent young woman around, but the thousands I have paid into endowments, pensions, mortgages, and insurance have gone to make those companies’ executives very rich and investors totally unrewarded. Do I, a right-winger, sound like a Marxist? Maybe. But my capitalist life has brought me nothing but anguish and the shame of begging from friends to pay basic bills.
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Interest-only loan? It must be the fault of capitalism.
It couldn’t possibly be an issue of PERSONAL RESPONSIBILITY.
Cry me a rivah.
keebs on April 26, 2009 at 3:55 PM
Ahh, no. A lack of brain and willpower brought her anguish and shame. She lived beyond her means, thinking since she could get credit, then she could buy unnecessary items, such as two homes in different countries. Gimme a break. She should try not ending all her sentences with “waah”.
Major Nuisance on April 26, 2009 at 3:55 PM
Unfortunately, that is the price we pay when we take risks and things do not go as planned.
I completely agree with you. She has no one to blame but herself.
deidre on April 26, 2009 at 4:01 PM
So she gets an interest only loan and an “insurance” policy to pay off her mortgage. But the “insurance” isn’t insurance at all. It’s an investment in the stock market. The salesguy promised her it would pay out at the end, but investments like that can never guarantee a payment.
So when she gets a little bit of equity in her home, she takes THAT out, and rather than pay down any of her principal, she buys yet another “insurance” policy based on the stock market. Stocks tank, her policy is worth nothing, and she wants to blame everyone else? How about getting a real mortgage that you pay down and own real equity in your home?
I’m no financial wizard, so I could be wrong here. But I don’t see how she was prudent. I see someone who took great risks with her money hoping they would pay off greatly for her. Isn’t that greed? Is she any different than CEOs of financial companies? You take risks and hope they pay off. When they don’t, who do you blame? The entire capitalistic system? I don’t think so.
CookeyD on April 26, 2009 at 4:03 PM
The interest-only mortgage thing was a red flag from the start. Don’t blame capitalism for your problems lady.
HawaiiLwyr on April 26, 2009 at 4:03 PM
This is not a defense of Miss Gould’s spending habits and investment strategies. I just want to point out that when people have their dreams dashed, not matter how fantastical they may be, there is a need to lash out and most often the blame is focused on the innocent.
Now magnify this anger across our society and you will understand why there will be more internal strife and war in the coming years. Some demagogue will come along to exploit this anger, of this I have no doubt.
Bill C on April 26, 2009 at 4:07 PM
If everyone who’s 55 is broke, we’d have a problem. That’s like me having a problem with Firefox on my own computer and then trashing the entire program as garbage.
ddrintn on April 26, 2009 at 4:08 PM
Unlike Obama who “is the only thing between [the CEOs] and the pitchforks.”
aengus on April 26, 2009 at 4:10 PM
How can she say she was “Prudent”. Prudent would’ve been investing in guaranteed rate of return bonds. Prudent would’ve been living in a flat OUTSIDE OF LONDON where she could afford the payments without having to play investment games to beat her mortgage rates.
Did her parents not have a home? What happened to its equity?
There’s having your dreams dashed and then there’s destroying the system because you didn’t get what you wanted. (to paraphrase ddrintn it’d be like throwing away your XBox because you suck at Halo)
Skywise on April 26, 2009 at 4:16 PM
What a load of crap. She was always so terribly prudent but now she’s broke “through no fault of her own”? Because buying two homes when you couldn’t really afford even one was such a prudent decision? Because relying on pie-in-the-sky promises of salesmen who were pushing financial products was such a prudent decision? Please. If you had worked steadily and exercised even a little common sense with your income, you wouldn’t be in the mess you’re in now.
It wasn’t capitalism that failed you, it was you that failed you.
AZCoyote on April 26, 2009 at 4:34 PM
Perhaps she should have 1) gotten all these promises in writing; or 2) asked each salesman “what it the worst that could happen?”
Planning for the worse case scenario would have been more prudent. Pessimisstic, but prudent.
Wethal on April 26, 2009 at 4:39 PM
So her grand solution in 2002 was to borrow yet more money. Wouldn’t a simpler and safer solution been to have sold the flat, pocketed the proceeds, and rented? It doesn’t seem to have occurred to her that she would be in even more trouble today had she gotten the loan that the evil Bank of Scotland denied her.
Realist on April 26, 2009 at 4:43 PM
Yeah right. Typical lib. Capitalism is the problem. It’s through no fault of their own (interest-only loans not withstanding), and seeing others successful makes them sick.
Christian Conservative on April 26, 2009 at 4:47 PM
My sister is 55, and even with a divorce 4 years ago she is financially secure. She has a solid job with benefits, owns her own modest townhome with a prudent 30-year fixed-rate mortgage, drives a car that is paid for, and has over $350,000 in retirement funds. She has vacationed this year in Jamaica. She has always been thrifty, not frugal, and very conservative in her spending and investments.
I think there are a lot of people like her who we will never read about.
rockmom on April 26, 2009 at 4:47 PM
There’s really no need to bash the woman. Be it her own fault or not, it’s a shame when people fall on hard times. At worst she’s misguided.
I will say though, that the ‘tent city’ comments seem odd. She’s 55, that’s not old. Get some gainful employment and a cheap room to rent with roommates.
Dash on April 26, 2009 at 4:52 PM
Interest only mortgages are not prudent.
Here is her article and it seems she is working at several things yet relies on friends to cover basic bills. Something stinks here.
BL@KBIRD on April 26, 2009 at 5:24 PM
Anecdotal misfortunes involved from making personal decisions as opposed to government stripping personal decisions away is still an appeal to tyranny.
anuts on April 26, 2009 at 5:27 PM
I would agree with you, except that she wrote an article about it, where she tries to blame capitalism, which, in fact, clearly illustrates here culpability in creating this mess. She’s trying to justify her own mistakes and giving others who made the similar bad decisions an excuse as well. We are now bailing people in the US out who did exactly the same things. So, yeah, I say bash her.
AUINSC on April 26, 2009 at 5:27 PM
She took a lot of bad advice, but doesn’t seem to have done anything to evaluate its worth. Did she realize that financial companies are selling something? Would she believe everything a car salesman told her, and not check it out? Try Consumer Reports Car Guide or something like that? Comparison shop?
Americans are so financially ignorant, or at least lazy. They don’t read what they sign, or ask questions if they don’t understand. Now they run to the government to bail them out of houses they couldn’t afford and credit card bills they ran up themselves.
Wethal on April 26, 2009 at 5:37 PM
From the start of the article where she imagines people making fun of her based on ethnicity, to blaming the system that did not force her to make good decisions. The above points tell the real story about interest only loans and not understanding her investments. Her arrogance was her undoing. Diversify your portfolio.
koolbrease on April 26, 2009 at 5:49 PM
Yeah, I was trying to figure out whose fault it was if it wasn’t hers. Glad to see I wasn’t the only one.
She’s blaming “capitalism” but it sure seems like she equates “capitalism” with trying to keep up with Donald Trump’s leverage ratio. Not the same thing at all, but there are more people in the world who share her ignorance than who understand what really happened here. She’s literally blaming the system for not helping her stop herself.
jr.ewing.78 on April 26, 2009 at 5:52 PM
It’s not that we’re bashing this woman. She didn’t write an article about how poor choices made her broke at 55. She wrote an article about how capitalism made her broke, how none of her decisions should be held against her, how it’s the evil CEO’s fault. We’re just pointing out that she’s wrong.
Had she written an article that said “You know what? I made some really crappy decisions and now I’m broke. All you 30 somethings out there: learn from my mistakes. Don’t let this be you” then you’d probably see a completely different reaction from the commenters here.
CookeyD on April 26, 2009 at 5:56 PM
The most revealing part of the article was her statement: “In 2002 the Bank of Scotland (BOS) was offering a package in which one could take 5% of the value of one’s home out every year.”
The biggest scam the financial and real estate industries succeeded on pulling on millions of people was the idea that borrowing against the value of your house was “unlocking your equity”, “putting your equity to work”, or similar claptrap. Your house was to be viewed as magic ATM machine, which reliably spit out money at regular intervals; rather than adding to your indebtedness.
I think the fundamental problem was quite simple. She was in the media, rubbing shoulders with wealthy people, and decided early on that she deserved an equivalent lifestyle: owning a flat in a very expensive part of a very expensive city, owning a second house in the US, etc., despite the fact that her income never supported that level of expenditure. Her solution was to borrow, borrow, borrow, leverage herself to the hilt, and hope that things kept going up. I’m sure if you suggested that she should be living in a middle class suburb and generally spend money only in accordance with her income, she would have been very offended.
Realist on April 26, 2009 at 6:04 PM
What perked up my senses was the allusion and insinuation of “tent cities” across the US due to the housing collapse. It went downhill from there, blaming seedy CEO’s and people in power for the fact that she in essence tried to borrow and spend herself into wealth. That, along with the little ethnic pity party she threw herself at the beginning. And of course the real culprit is capitalism. Thus, of course, capitalism must be done away with and more nanny-state protection is needed.
bleh
AZfederalist on April 26, 2009 at 6:33 PM
I only scanned her article after I got to “my interest-only mortgage”.
Are interest only and adjustable rate mortgages still being offered? If they are, why are they?
BowHuntingTexas on April 26, 2009 at 6:38 PM
It’s hard to tell the root cause of her problems. It sounds like she had unrealistic expectations of the type of lifestyle her income could support. I’m not sure what an endowment is over there. It sounds something like a variable annuity. A couple lessons one might glean from her story:
1. She touches on it only briefly, but she took a huge risk in 1991 leaving a well paying job and starting her own business. Free lancing works out well for people who are very talented, self-disciplined, experienced and lucky. You need all four or a financial disaster can strike.
2. She seems to have invested in speculative or at least quite risky instruments that she didn’t really understand. If you need the money in less than 10 years it should be in a mix of cash and investment grade bonds. Bear markets do happen, and often it takes a decade or more to recover.
3. Trust no one. Take responsibility for yourself and your investments. If it’s too complicated for you to understand you shouldn’t own it.
4. Hope for the best but plan for the worst. She seems to have not made any contingency plans as things went bad for her.
This is the type of lifestyle and decision-making that is punished in a system that allows for success and in exchange insists upon personal responsibility. If you want others to take responsibility for you, you end up as a perpetual adolescent mired in a stagnating society, otherwise known as a statist liberalism.
Ted Torgerson on April 26, 2009 at 6:48 PM
Because of capitalism, I started a business at 32. Because of capitalism, I lost everything at 50. Because of capitalism I’m back better than ever at 58.
Would not have it any other way.
(Cue Sinatra singing “My Way”)
Rod on April 26, 2009 at 6:54 PM
Rod on April 26, 2009 at 6:54 PM
We need more people like you and a whole lot less like her
AZfederalist on April 26, 2009 at 7:25 PM
Actually that part is not in her imagination. This is a riveting account of post 9/11 Britain, written by Carol Gould. It’s not just Jews, but Americans who are held in disdain. Here’s an excerpt:
…It is impossible to convey to Americans inside the United States, or to American Jews, the open loathing of both groups that dominates daily life outside the United States today. What is so disturbing to me is that I am no longer accepted at face value in my daily encounters. If the media set out some years ago — even before Bush 43 — to turn the public against America and Israel, they have done a magnificent job. I have stopped counting the number of unfair accusations hurled at both nations in the course of a day on the airwaves or in the print media. Long ago I stopped wearing a flag pin (how wonderful to be able to wear one as I walk down a Philadelphia street without fearing for my life). Just the other day I had a tongue-lashing from an old acquaintance about the ‘appalling flags the Americans put outside their homes, like Nazis all over again.’
Buy Danish on April 26, 2009 at 8:10 PM
How horrible! And she gave to the poor too! It shatters my grip on reality when someone fails at living up to their ethnic stereotyping birthright.
What was that bang?! There it goes again! Oh. It was both balloon mortgages exploding?
ericdijon on April 26, 2009 at 8:22 PM
Heck of a job, Baracky. PS – Where’s that birf certificate?
BHO Jonestown on April 26, 2009 at 9:03 PM
Exactly. I have seen this story repeated numerous times in the US as well. Middle class people trying to maintain a lifestyle more suited to the leisure class.
Good point about equity as well. When I bought my house the seller tried to get me to close the deal at his price by saying that if I invested only 15K in house upgrades I was going to gain 50K in equity. Wonderful, in reality it was only more debt capacity, possibly temporary, I laughed. Then I bargained him down.
Lately, some people never seem to realize that prices fluctuate up….and down, but fixed debt never does.
I did find interesting her description of a quite despicable and backward form of racism that apparently existed in the Netherlands as recently as the late 1990’s! At a media company, no less! Very nasty. And the Europeans like to lecture us?
Dreadnought on April 26, 2009 at 10:25 PM
Adjustable rate mortgages are certainly still being offered, and actually aren’t a bad deal for some people, especially people who don’t plan to keep their house long-if they are willing to plan for the worst.
I believe interest-only mortgages are probably still being offered also, though I can’t imagine why anyone would want one, given the return on investments lately. Always a bit of a fool’s game anyway, in my humble opinion (and as recent events have proven, I believe).
Dreadnought on April 26, 2009 at 10:38 PM