Monday, February 22, 2010


Sometimes I wish people thought like me.

Not everybody.

But some people.

Peep this conversation that I had at work with a co-worker.

Her : Kyle, look at this guy's information (as she points to her computer screen). This guy makes $12,500 per month but he's buying this house that only costs $180,000.

Me : Only?

Her : Yeah. That's 150k a year. Look at his credit. He doesn't have much credit. He could afford a more expensive house.

Me : Yeah, he could. Maybe he doesn't want to overextend himself financially? He's keeping his debt to a minimum. I understand it.

Her : Not me. That's just stupid. I would get a bigger, more expensive house. He can afford it.

Me : You know what...that might have been the dumbest thing I've heard all day. Just because he can afford it doesn't mean that he should buy it. People have to get past that mentality. Look at his profile. He's an executive at GM. You never know what may happen with that company or any company. I'm sure his severance would be nice but he's being smart. He's making a good business decision. You never know what his situation is. Why jump into a ton of debt if you don't have to? We're in a recession. You have to be smart about what you spend your money on. And if he found a cheaper house, why not get it?

We're both mortgage underwriters. We have more than 10 yrs of experience. Right now, we're looking at corporate purchase relocations. These are loans where people who work for corporations and are being relocated by their companies. For example, Jon works for Glaxosmith Kline in Durham, NC. He gets a promotion and they want him to move to Reno, NV. It will be up to him to find a home in Reno and he'd have to qualify. The loan file would come to me and I'd approve it.

My point to my co-worker is this...we all have to be smart about how we spend our money. The dude who's credit profile that we were talking about only had one small credit card. No car payment. No loans. So, he is able to invest/save almost all of his money. As we emerge from this recession, I think it's important to be mindful about what we spend our money on. I'm not saying that we shouldn't want the finer things in life. Who doesn't? Foreclosures and unemployment is at an all time high. Companies are going under. Financially, the country is at rock bottom. It'll be some time before we dig ourselves out of this hole. That being said, be smart about the debt that you assume. Be mindful about what you spend your money on.

Don't go all out...just because you can afford to.


Smarty P. Jones said...

Too many people are obsessed with flash and foolishness. Dude could have other things he's responsible for that ya'll don't see.
And who is to say that house isn't awesome? Right now, people are running up on great deals due to foreclosures and whatnot.
That crazy bull- is why people who would be responsible with it will never get a whole lot of money.
I am in the wrong business. I need to be somebody's executive doing something. Sheeeit, I'll take half of what that guy is making.

Lady K said...

Just tell me if the co-worker is white or black... Yes, it matters.

Just confrused! People live beyond their means. I know because my sister is the same way! they feel like because you have the dough then it should be spent. Just dumb!

I can't do nothing but SMDH!

Chelita said...

I completely agree with everything you said, but I'd take it one step further. Let's say he's guaranteed his salary for life, doesn't have any unseen financial obligations, isn't worried about the future: Maybe he STILL doesn't want a bigger house! If this is what he wants, why get something bigger/more expensive just because he can?

Our problem in this society is always taking more than we need. We have to change that mentality.

12kyle said...

@ Smarty
You're right. You never know someone's financial burdens. There's always more than what you see on a credit report

@ Lady K
She's black

@ Chelita
Many of us have to change this mentality. If we don't it's gonna kill us financially.

Beautifully.Conjured.Up said...

I concur.

Like someone once said, if you live under your means, you will live above your options.

Reina said...

You know, your blog is proving that there may actually be dumber coworkers in the universe than mine.

Money is not guaranteed. Ever. We have to make smart decisions in case that eventuality ever becomes reality.

Kingsmomma said...

And she probably overextended herself with the weave she's wearing and that gucci purse she carrying. This is why some people are never wealthy. This mentality right here. That's exactly why we happened into this recesssion in the first place. Credit. My momma always said one bird in the hand is worth two in the trees...or somthing like that.

Ricardo said...

Yeah, that is pretty dumb.. I need to live this advice more. I've never been a good saver and am now with a single income and expenses growing monthly trying to keep it together from paycheck to paycheck. I look back and wish some of my debt now I'd just gone without or not financed stuff. Hindsight is 20/20.

Now I just need a nice annual bonus, or a small 5 figure lottery win to set me back on track.. *sigh*.. In the meantime, it'll be a slow road to digging out - a road rife with distractions and other things begging for my money, but I need to focus on my destination - debt free living... All so I can.. wait for it...... get a house and go massively into debt.. YAY!! for the American effing dream.. Bah.

Particularly living in the NYC area. I'd kill to buy a decent house for $180k. Around here $500k is the magic number if you want a decent livable house with a nice yard for the kids.

Ricardo said...

A good blog on some of the topics of personal finance is from one of my boys from college..

BrokN_RecorD said...

I agree with you 1000%. People need to do better...not just "our" people. And frankly, it depends on where dude lives. If he was in say central FL, or SC 180k house is 3-4 bedrooms easy. I'm just saying...

No said...

WHAT you mean you don't have to go out and spend a dollar fifty for every dollar you earn?... what is this language you speak....called.. saving???

I jest... You've met a kindred soul. I for one have always been fugal (and criticized heavily for) not having the desire to "ball till you fall" I don't get the mentality and it really frustrates me when people in my own circle spend recklessly. (i'm venting at this stage in my comment) If anything this recession should teach people to live within their means... it's a harsh way to learn it but we have to get our foundations right and like dieting or anything else it's a discipline that needs to be built.



Mizrepresent said...

That's a very smart man. During these times it is best to save as much as you can and invest less in material things. When i bought my house i made sure i bought something that i could afford alone and w/my salary (with no guarantees of promotion or salary raise),i wanted to live below my means so that i always had a viable savings in place for rainy days and such. In the last couple of years i managed to cut out alot of unnecessary expenses. You give great advice. The reason so many people are having hardships today is because they overextended themselves with big houses, cars and such. We have got to do better or go under.

12kyle said...

@ Beautifully Conjured Up
Wow! I couldn't have said it betta myself!

@ Reina
Trust me...I think I've got you beat on dumb co-workers. LoL. I agree with you, tho. Dead on point

@ Kingsmomma
The one thing that I've observed by viewing these loans is that most of these people live very modest. If you're making 100k a year and you have 800k in savings, you're doing the right things. I'm not saying that we shouldn't slurge on ourselves...(especially on shoes, right? Lol). I think this recession should have taught us to plan for tomorrow

@ Ricardo
You aint neva lied about the property in New York. I tip my hat to you. It's a beast up there

@ Broken_Record
Gimme a 180k house in Florence, SC and I'm ballllllllllin! LoL

@ No
Yes! Frugal is my middle name! Some would say cheap but frugal sounds so much betta, doesn't it? LoL. Excellent points

@ Miz
Smart moves, Miz. That's what it takes. If we THINK before reacting, we'll be better off!

Tha L said...

yeah, Kyle, your coworker is a dumb ass. just like so many other dumb asses who are overextended and end up losing everything. SMH.

Keith said...

You are absolutely right Kyle...Your co-worker is stupid..
He might be able to afford the house, but then can he afford the utilities and furnishing and unexpected repairs Etc. You have to factor all of that in when you buy a house..Most people don't, which is partially why we are in the economic mess we are in right now.

Super Dave Van Buren said...

Preach bruh... I know a couple people who jumped out there and got burned by the market.

Live and learn I guess.

The F$%K it List said...

I agree people are always looking to outdo someone else and their own pockets. Her way of thinking is EXACTLY why we are where we are right now as a country financially!

P.S. Ugh you're an underwriter I despise underwriters. Too bad I already love you like a bro or I'd tell you about your career choice

LadyLee said...

Yep... keeping up with the joneses. That's what your coworker is thinking about.

I am glad the man has the fortitude to buy a smaller home. And who knows, in this market, the house may be worth half a million and selling low.

I would think a mortgage underwriter of all people could appreciate such. Really!

Don said...

I agree, I also wish I had 1/2 the amount of sense that you display. Yeah, one of those if only I had listened stories.

Anyways I am like yourself: Only $180,000?! LOL! Ish, that is enough. What else is needed? A couple more rooms of furniture that you don't need anyways?

Reggie said...

I think her attitude is the very reason that so many people are in the credit crunches that they find themselves in; and probably the very reason why our country went from sugar to shit in less than eight years.

I paid a quarter of a million dollars (approx) for my house 5 years ago, it's probably not worth that now. I keep hearing that we should hold onto them and the prices will come back up; but what happens if my financial situation changes and I'm unable to pay for the house?!?

It is what it is.

Excellent post!!!

Anonymous said...

I think the guy is why, the smaller the loan the less interest and not only that the small loans means he can renovate and basically build what he wants out of his pocket.

Make the home his!

...And who knows maybe he's buying it for one his children.

We need to live in a place we are comfortable!

Cdn Gurl

12kyle said...

@ L
I wouldn't lump everybody into that category b/c I know that there were a ton of people who got "scammed" into these loans. Predatory lending ran rampant. But I agree, there are a ton of folks whose mindset led to this crumble.

And yes...she is a dumb ass! LoL

@ Keith
You know how it goes. When you buy a house (even a new one) you've gotta set aside loot for when things go wrong with the house. Because things WILL go wrong. LoL

@ Super Dave
Yessur! If you play with fire, it's gonna happen

@ The F$%k it List
LoL! You know I'ma defend underwriters. This wasn't the career choice (and still isn't) but pays the bills. But you know ole 12kyle got bigger plans!

@ LadyLee
You make a great point. You would think that somebody who understands the system wouldn't say something so dumb. But you know ignorance is running rampant

@ Don
I feel you, fam. I've had those thoughts too! I was able to learn early but that's apart of life. It's more important to be willing to learn than to walk around like you don't have a clue

@ Reggie
Dead on point, bruh. Property values won't ever be the same. If you sold the crib tomorrow, you'd get a profit but not nearly as much as what you SHOULD get. It's sad. But that's where we are right now. And we're all in the same boat.

@ Cdn Girl
Good points. He made a sound business decision. We all have to do that more often.

Jazz Kat said...

your co-worker is exactly why so many people are overextended on their credit...exactly why so many people are in debt with homes they CAN NOT afford...exactly why the housing market is in the toilet now too.

CurvyGurl ♥ said...

This is the very mentality that got the country in the financial ish it's in right now. Then we all end up paying for it. Tell her to hush and mind her business.

Tyrone said...

I'm glad we made that same decision. We knew our situation would change so there was no reason to go spend out of control.

Redbonegirl97 said...

This is the exact reason why we had so many foreclosures in America. People are so quick to buy expensive houses and expensive cars just because they they may be able to afford the payments. Affording it may mean you are only making a house payment and nothing else, which isn't realistic. We need to invest and save our money and get what we need so that when we are 65 and ready to retire you won'r be forced out of a home that you can no longer afford.