Low Profile

I was wondering about the idea of living on a fixed income. I hear this all the time on the news...and always in reference to the elderly. They always show a 4 second sound bite from some old lady who says she can't afford the increase in pork shoulder because she lives on a fixed income.

Well...the last time I checked, my paycheck from two weeks ago was the exact same as the paycheck from four weeks ago...and six weeks ago...it sure seems to me that I am living on a fixed income, and I'm but 38 years old. I do not want to trivialize the impact of higher food prices on certain elderly Americans, but at the same time I don't understand fixed incomes. You must live within your means regardless.

I am not terribly worried about my future financials. I am confident that I can make ends meet under all but the worst scenarios. Recall I'm a doomer. I have always thought that I could work with my hands as a carpenter/woodworker if the occasion called for it, sorta my backup plan. But also by maintaining a career in an essential field, I've more or less self-insured myself against future financial calamities. Farming would most likely be the most essential skill, but then, I can't grow shit. I've tried, but I'm not any good at it.

Today I could take a 60 month hit...I could lose my job and make ends meet for 5 years before I would have to start tapping into the retirement fund or the home. I'm not saying it would be pleasant, but I've worked and saved my ass off to provide for such a reserve. I did so by living on a $15,000 salary when I made $25,000. And $40,000 when I made $50,000..and so on. That is, I always lived within my means and I maintained a positive savings rate. How is it that since 2006 Americans have a negative savings rate? I am suspicious of this statement, although I can't say I don't believe it, as I look out my front door.

I cite two observations: My neighbors across the way and next door. In 2005 Bob and Joan bought an Infinity QX56 and sold their house to buy up; to a larger house here in Elk Grove. He told me his 'QX56 was paid for,' but indeed, she later disclosed that they used the proceeds from the sale to pay it off. So they had that much less down for their next house...about $25,000...now financed for 30 years. Indeed, they traded the Infinity in for a Nissan Armada just last year. He's a cop and she's a school teacher. Average wage earners, but combined prolly above median.

Next door, our other neighbors, in 2004, bought their new Yukon Denali and spent another $6k for low profile tires and rims. These are used only during the spring and summer months. Each fall and winter, the original rims and tires that are stored in the garage go back on because you shouldn't drive the really good ones in the icky, icky wintertime muck that Elk Grove is so notorious for. She also now drives a late model Lexus. From our real estate friend down the street, we discovered that their house was refinanced twice between 2001 and 2005 from $190k to $310k. As far as I know, they are average wage earners as well.

I'm sure I sound like Gladys Kravitz...spying on my neighbors, digging into their financial lives, sorting through their trash for SSNs and account numbers, installing remote cameras in their floorboards and crown moldings...that sorta thing.

From just two local examples, there's no need to wonder why Elk Grovians have been particularly hard hit by this latest economic recession slowdown.