There is a crisis in home ownership today. As each day passes, more and more Americans are waking up to find that their nightmare is actually reality. For the last 10 years, Americans have been signing their names to the 30-year dotted line faster than ever before. We have been purchasing the homes that we are naturally entitled to. Entitled?
We are actually entitled to a hell of a lot less than we think. This isn’t a limiting belief, in fact, I would argue that it is actually a good thing. Entitlement leads to complacency and a lemming-like society filled with figurative cliffs. The concept of the American Dream is one such entitlement trap. At some point in the last 50 years, the American Dream crossbred with a desire for home ownership. While this seemed as though it was a benign confusion that simply would result in more homeownership, it actually led many Americans towards the figurative cliffs that lemmings often find. And this is where we find ourselves. Our nation has become a dried riverbed of misplaced hope in a dream that merely contained a terribly misplaced premise. Now we know, the American Dream is not home ownership. For if it was, the American Dream would actually be a nightmare. This mutt of an American Dream with which we once felt entitled, has proven one thing: entitlement is a sucker’s bet.
I have long believed that the actual American Dream is opportunity. However, opportunity isn’t a one-act play with a predictable ending. Opportunity is the preamble to a life filled with challenges, successes and failures. The unique thing about opportunity is that it can be both given and self-created. Governments, banks, and other citizens can give Americans opportunity, but that doesn’t mean that the opportunity is objectively a pursuable end. In other words, if a bank offers you money to buy a house, that doesn’t mean that you should accept it.
At some point it became classist and inappropriate for me to say that “some people can afford houses and others can’t”. And my guess is that when you read that you thought, “ouch, he is being harsh.” But I’m not. Why is it wrong to say that some people can afford a house and others can’t? Unfortunately for America, math stopped mattering. Home ownership became a social issue, and not a simple math equation. Don’t hate on math. We are all faced with limited economic resources, and it is up to us to manage them, using math.
Home ownership took math, and made it irrelevant for about 15 years. Well, math is back, and it’s pissed. The American Dream has been surgically removed from the wanton desire for home ownership. And in an unfortunate twist of ironic fate, the American Dream has now become the dream of staying in a home that you can’t afford.
Yes, we are swimming through a murky pool of irony. We forsook math and rational thought in order to shoehorn ourselves into mortgages. But when the shiz hit the fan, and we realized the errors of our ways, we decided to re-dream the American Dream. We now dream of holding on to what shouldn’t be ours. As happens in a free market society, the fat has been cut. Middle management, salespeople, and marketing professionals which were once the salt of the middle class American earth have been cast aside like the leftover uneaten filet mignon that used to occupy the trash bins of your average corporate jet. Now we are simply trying to make sure that we can speak the word “income” without feeling that gut-wrenching, tear-inducing feeling that comes over us when we speak that of which we don’t have. But all is not lost. ALL IS NOT LOST. We still have math.
When math gets pissed: Part 2, Part 3, and Part 4
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.
3 thoughts on “When math gets pissed: Part 1”
“entitlement is a sucker’s bet”
Couldn’t have been said better.
The definition of an investment is something that gives you an income, or grows in value. Did your home do that last year? The last 5 years?
I’m glad somebody is saying this. Can’t wait for part 2.