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What is Surviving the American Dream?

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Somewhere along the line the admirable ambition of owning your own home has increasingly become something destructive and the time has come for our implicit faith in the ideal of home ownership to be reevaluated. What was once the cornerstone of a family's personal and financial well being has become a participant in a declining American standard of living. We are conditioned to have faith that owning our own homes is the path to happiness and prosperity. While that may have been the case a generation back, today's reality is most of us are working longer hours, have less disposable income and save far too little to fund our ever growing retirement years.

The sensationalized image of owning your 'Dream Home' is right at the center of the modern tradition of spending as much as we can borrow to buy the nicest home we can find. This has had the effect of driving home prices to the very edge of affordability... and drawing the attention of institutional investors who are very good at studying, and profiting from the very predictable behavior of the home buying (and borrowing) public.

I believe the happiness and long term satisfaction we get from a home has been grossly oversold over the years. Yes, beautiful homes are a pleasure to enjoy...but they come at a high cost.

Surviving The American Dream is my attempt to encourage a more cautious and modest approach to home buying. Forget the Dream Home and think 'Dream Life'. Family, health, community, finances, leisure, retirement, time. A house is a small component of the life well lived...but the decisions we make when buying a home permeate every aspect of our lives from that point forward... largely because of the under-appreciated financial obligation you are making and the surprising ways home choice impacts nearly every aspect of your life.

It’s Time for a More Meaningful Dream

It’s Time for a More Meaningful Dream

I am not sure how it got started, but the idea of a ‘Dream Home’ has come to mean the biggest most beautiful home you can afford. As it turns out, this isn’t the path to happiness. A ‘Dream Home’ should be the home most compatible with the life you dream of living. When I was a boy, I shared a room with my brother. Of course, our sister got her own room. It was a small home in a modest but pleasant neighborhood. It may not have been the most ideal arrangement but we did fine. I don’t remember ever feeling cheated. In time, my parents were able to move us into a bigger home. My best guess is that the new house was around 1600 square feet. Although that is small by today’s standards, it all[...]

Featured Articles

Low interest rates don't make housing more affordable.

Low interest rates don't make housing more affordable.

Supply and demand are the biggest determining factors in housing values.  While getting a lower interest rate loan will reduce a payment in a specific house purchase, the long term effect of low interest rates is simply housing inflation.  From a macro/market perspective, interest rates have a supplemental and often artificial impact on values. Rate cuts in recent years were not about making housing affordable to the public.  The lowering of interest rates was intended to stimulate buying and inflate housing(more...)
Sacrificing for the Life You Want: An Interview with Christian Dy

Sacrificing for the Life You Want: An Interview with Christian Dy

Christian Dy is a financial planner; but he prefers the term “financial educator.” In addition to guiding his clients on issues around financial planning, investment, and insurance, Christian also gives workshops to educate the public on how to make better financial decisions. He works in Vancouver, BC where the cost of housing is prohibitively high, creating a real challenge for young people and families who want to buy a home. I asked Christian what advice he gives to those who want(more...)
“Truing up” Your Personal Values On A Home Purchase: An Interview with Divorce Coach Laura Bonarrigo

“Truing up” Your Personal Values On A Home Purchase: An Interview with Divorce Coach Laura Bonarrigo

As a certified divorce coach, Laura Bonarrigo specializes in helping people during times of transition in their lives.  Her focus is to aid them in considering the ramifications of those changes and to hold them accountable to becoming the best possible versions of their true selves, living a life based on their values. I talked with Laura about the impact that homebuying decisions can have on marriage.  She provided a wealth of perspectives on post-divorce healing, communication, and values. First I asked(more...)
Is the real estate industry to blame for the mortgage/housing meltdown?

Is the real estate industry to blame for the mortgage/housing meltdown?

In the comments section of a reputable housing blog, someone complained that the 'real estate industry' was to blame for the collapse in housing (2005-2010).   Along with some general complaints about agents costing too much and doing too little, one of this commenters main points was that sometimes buyers should not buy a house and agents and lenders only get paid when they do buy a house creating an inherent conflict that could legitimately undermine the advice offered to(more...)
Finances and Intentionality in a Home Purchase: An Interview with Michael Palazzolo

Finances and Intentionality in a Home Purchase: An Interview with Michael Palazzolo

Michael Palazzolo has a varied background. After his first career as a software engineer, he worked for a national credit housing counselling agency. In this role, he counselled clients in both the pre-purchase phase as well as others who were trying to keep their homes during the housing meltdown ten years ago. He is now a registered investment advisor who has started his own fee-only financial planning firm. I sat down to talk with Michael about some of the insights he(more...)
Living Below Your Means: Interview with Matthew Miglin

Living Below Your Means: Interview with Matthew Miglin

Common financial wisdom tells us to live “within our means.” But is that really good enough or is that cutting it a little too close? What if we chose instead to live “below” our means? I spoke with Matthew Miglin (a business owner, financial advisor, and Licensed Clinical Pastoral Counselor (LCPC)) about this topic as it pertains to the decision to buy a home. Based on his experiences, Matthew believes that most people take this life-changing decision more lightly than they should.(more...)
Personal financial fitness, Choice and Intentionality in Home Buying.  Surviving The American Dream: Stacey Powell of www.TheFinanceGym.com

Personal financial fitness, Choice and Intentionality in Home Buying. Surviving The American Dream: Stacey Powell of www.TheFinanceGym.com

Stacey Powell is a former financial auditor and founder of The Financial Gym, a small business which helps people get out of the cycle of living paycheck to paycheck. She believes that simply by spending more time focusing on finances, it’s possible to break free of this cycle. She confesses that the idea for the project was born out of her own “financial disaster” when she found herself stuck in the debris of a financially devastating divorce. Although she had always(more...)
There's more to life than being stuck in a house payment.  Becky Wolfe On Paying Down Debt, Income Properties & Financial Freedom

There's more to life than being stuck in a house payment. Becky Wolfe On Paying Down Debt, Income Properties & Financial Freedom

BECKY WOLFE ON FINANCIAL FREEDOM I recently sat down to talk with Becky Wolfe, a physician’s assistant, blogger, and mom from Ohio. Besides her experiences as a home buyer, she is also the author of Simply Intentional Life a blog about achieving a debt-free lifestyle. In addition, I talked with her about her experience of building wealth with real estate. Becky began by describing her experience of buying her first home, which she did “without much thought” even before she and her husband(more...)
How much is that house really worth? Appraisals in the Home Purchase Process

How much is that house really worth? Appraisals in the Home Purchase Process

So it’s time for the appraisal.  An appraiser is someone that is hired by the buyer but essentially works for the lender to investigate the property.  Most importantly, an appraiser determines the value of the property as security for the loan that you (the buyer) are going to get on the property. Why is the Appraisal Important? If a bank is going to lend several hundred thousand dollars, they want to make sure that if things go badly and you decide not(more...)
Budgets, Accountability & Values: Interview with Life Coach Elizabeth Farrell

Budgets, Accountability & Values: Interview with Life Coach Elizabeth Farrell

As a real estate broker, I’ve witnessed a lot of pain and suffering as a result of poor choices about home ownership. I often wonder how to help families take more control of their financial future to avoid that. I sat down with Elizabeth Farrell to discuss this question. Elizabeth gracefully balances many responsibilities as a co-active life coach, yoga teacher, and a mom. She took some time out from these worthy endeavors to share a few valuable life lessons about(more...)
Financial planning for a home purchase: An interview with Denise Downey at FinancialTrex.com

Financial planning for a home purchase: An interview with Denise Downey at FinancialTrex.com

The lure of the ‘dream home’ is powerful and seductive. Every couple or family yearns to have a beautiful home in the perfect neighborhood. A source of personal satisfaction, comfort and pride. Those who work in real estate or mortgage financing, are aware of this seductive pull. While most agents and lenders want to make their clients happy, very few are encouraging buyers to borrow less, buy less and settle for less. That just sounds bad. I had a conversation about this(more...)
Happily Ever After: Finding the right home at the right price

Happily Ever After: Finding the right home at the right price

Once the idea to buy a home takes root and you have a budget (usually from a lender(which is a bad idea-more on this later)) most home shoppers generally begin the process of comparison shopping. Much as we would approach buying a car or a television, we start learning about what is available, the features and amenities we want and how much we can get for our money. Essentially, finding the very best house we can find for the money(more...)
You Can't Buy the Life You Dream Of

You Can't Buy the Life You Dream Of

I remember years ago watching a documentary on the last months of a terminally ill Warren Zevon. I knew his music and liked it well enough, but wouldn’t have considered myself a fan. Having recently lost my own mother to a slow, painful death by cancer (and equally toxic cures) it was essentially an early ‘reality TV’ show letting you see the life of a man facing his own mortality. Aside from a powerful reminder that we are all fortunate(more...)
Homebuyer Priorities: Focus on the Things You Can’t Change

Homebuyer Priorities: Focus on the Things You Can’t Change

As a home buyer, you will have many things on your list of wants and needs - big rooms, chef’s kitchen, big yard, and granite. Often, these things consume our minds when making choices for our home purchase. However, I am here to tell you to think bigger than that. When you are searching for a home, you will be making choices, trade offs and compromises. Be sure to be mindful of the bigger picture. One thing to be aware of(more...)
May 2016 Elk Grove Housing is Roughly 83% of 2005 Prices

May 2016 Elk Grove Housing is Roughly 83% of 2005 Prices

An April 2016 article by Hudson Sangree on the Sacramento Bee website  shows Sacramento Area median home prices are back to 2004 levels. According to housing research firm Corelogic Analyst Andrew LePage “We’re roughly back to where we were before the sharpest part of the run-up”. I'm not sure 2004 is particularly noteworthy as it falls as some point during the runup, but neither the beginning nor the end of a tumultuous market swing. But how far has the recovery come?(more...)
Making Our Homes a ‘Nest Egg’ Again

Making Our Homes a ‘Nest Egg’ Again

Research shows most people do not have enough money saved to retire comfortably or safely. In fact, the reality is Americans don't save enough for retirement. To get a better picture of what we’re dealing with, let’s look at some numbers: 40% of Americans age 55-64 have no money set aside for retirement Of those in that age that do have retirement accounts - the median balance is $120K according to the Federal Reserve Overall, the median retirement account balance for all working-age households in(more...)
Real Estate Is Not Recovering...

Real Estate Is Not Recovering...

We have seen many years of financial destruction to millions of homeowners with wave after wave of foreclosures immediately followed by wave after wave of short sales - which was sadly a dramatic improvement. Now, we are hearing and seeing evidence that the housing market is recovering. Over the past couple of years, single-family home sales activity had skyrocketed and prices have risen dramatically. Millions of formerly underwater homeowners are back in the black with home equity once again. And for(more...)
The Correlation Between Home Values, Price Appreciation And Income

The Correlation Between Home Values, Price Appreciation And Income

There is a connection between personal income and housing prices.  If housing prices increase at a faster pace than income for any extended period of time, housing will become overpriced compared to the local markets’ ability to afford it and it will inevitably return to equilibrium.  This means price declines... at least relative to incomes.  Essentially, we can't expect our homes to appreciate faster than the local markets ability to afford it. The underlying premise is that we will spend the limit(more...)
Have Low Interest Rates Been Good For Real Estate?

Have Low Interest Rates Been Good For Real Estate?

The general belief is that the extremely low interest rates we've seen over the past 10 to 12 years or so have been good for the affordability of housing. While in the short-term this may be true, by driving down a monthly payment for a given price on a home, the longer-term effect has been driving prices higher and higher and potentially creating a disastrous long-term impact on the affordability of homes. Low interest rates and liberal lending standards have made(more...)
Home: An Appreciating Asset Filled With Depreciating Stuff

Home: An Appreciating Asset Filled With Depreciating Stuff

I believe I could make the argument that home ownership, in its current form, is making us poorer because of the depreciating consumer goods we choose to fill it with. While at its very heart, a home is a magnificent kernel of responsible living and financial well-being, over the years it has become something more…and certainly more destructive. We have come to believe it is obviously the wise financial choice for anyone in a position to buy a home to simply(more...)
Home Improvements Are Not Investments

Home Improvements Are Not Investments

We've deluded ourselves into believing that our homes are good places to spend our money as a continued investment. We relate to it much like tucking money away in a high yielding CD for long-term growth believing we have just made a meaningful contribution to our net worth. So a new kitchen, bath, pool, landscaping is like money in the bank; plus we get to enjoy it too! It sounds great – but there is a not-so-great side to home(more...)
Buying a home is not like buying other stuff

Buying a home is not like buying other stuff

You're a smart shopper.  You set a budget, make a list of the features you want and set out comparison shopping to get as much as you can for your money. I suppose that’s how all savvy consumers shop.  The difference is a home purchase is life changing.  You’re adding a near permanent financial component to your life plan and all subsequent decisions are subject to that influence. In fact, buying a home is more like having a baby than buying a TV. When(more...)
Want to build wealth?  Don't Move So Much.

Want to build wealth? Don't Move So Much.

It has become the American way of life… we want to upgrade everything in our lives. It has become a frantic cycle of wanting more, doing more and having more. We may think we are moving up or getting ahead, but often the drive for more is costing us elsewhere in our lives. Perhaps it’s time to slow down and re-evaluate our position before making life choices, like buying a new home and moving. Calm reflection will help you stick(more...)
Dream Home? It’s Time for a More Meaningful Dream

Dream Home? It’s Time for a More Meaningful Dream

I am not sure how it got started, but the idea of a ‘Dream Home’ has come to mean the biggest most beautiful home you can afford. As it turns out, this isn’t the path to happiness. A ‘Dream Home’ should be the home most compatible with the life you dream of living. When I was a boy, I shared a room with my brother. Of course, our sister got her own room. It was a small home in a modest(more...)
A New Threat to Housing- Good Intentions Are Not Enough

A New Threat to Housing- Good Intentions Are Not Enough

Former Rep. Barney Frank (D., Mass.) and principal designer of the 2010 Dodd-Frank law is speaking up regarding the resistance to an upcoming provision of the law.  While the law intends to provide protection from the kind of system failures we have seen over the past decade, it seems to leave a little to much responsibility in the area of responsible lending and borrowing with the retail lender and the consumer.  A controversial provision that could begin in January of(more...)
The door remains open for financial scandal according to LA Times

The door remains open for financial scandal according to LA Times

While I believe that regulation and reform are required to protect us from fraud and abuse of large corporations, it seems that hard work, money and influence can slowly dismantle any regulations designed to prevent corporate bad behavior.   According to the LA Times, the power of the Volcker rule has slowly been diluted by the efforts of large financial institutions determined to keep the options to profit wide open...despite the risks to the rest of us. Although, I think we(more...)
After many years there are still no significant prosecutions on those responsible for the mortgage meltdown

After many years there are still no significant prosecutions on those responsible for the mortgage meltdown

Neil Barofsky a former federal prosecutor and inspector general over TARP shares comments at NPR about his thoughts on why there have been so few prosecutions and convictions. First he suggests these crimes would be difficult to prosecute because of their complexity and the difficulty in explaining the crime to a jury in order to get a conviction.  Further, the delicate position of the economy and the importance of the large financial institutions made pursuing them for criminal charges while relying(more...)
Is America's Wealthy 1% to Blame?

Is America's Wealthy 1% to Blame?

There are a lot of financial pressures these days. Many are concerned about home values. Job security is harder to come by. Inflation adjusted incomes seem to be dropping.  Doubts about the long term stability and cost of Social Security and Medicare. Financial stress seems to be in the air these days, and more people want to know what’s causing the problem. Some wonder how wealthy Wall St. executives can be receiving multi-million dollar bonuses after having brought a world’s economy(more...)
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