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October 18, 2007

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So. . . if I hang out with you and nickel, will I write a good blog? What does it say about me if I hang out with the Hustler?

The 10 people theory is probably correct, but flowed, because like peers tend to collect together.

What it doesn't say is how to be attractive to the groups above your peer group.

Peers tend to be able to communicate about similar experiences. If you are a grill cook and don't travel worldwide, play golf or tennis, execute deals, go to the symphony, sit or boards and do the things executives do, chances are you won't attract executives as your peer group. You will tend to attract.....grill cooks or those in similar life experiences and occupations.

I guess you could incrementally do it, but it could be a long trip.

correction to the above. flowed should be flawed.

your friends and neighbors also determine your physical health too which corresponds to financial health. If you have fat friends your are nearly certain to be fat too.

This is a real hoot. Most of my friends are well-paid IT professionals. My best friend is a very well-paid elected county clerk in a mid/large county . I earn probably around one-fifth their average income. What is the basis for this claim? Any empirical evidence or just anecdotal?

Another thing - as an educated white male (in the rental housing market, I think this is a very valuable asset) with an affordable housing obsession and an aversion to underclass behavior, I have been quite successful in finding and keeping low-cost rental housing in desirable neighborhoods. It has been only in the four years I have lived here that this hasn't worked out so well, and that's because my current neighborhood has gone dramatically downhill during the time I've lived here due to an influx of underclass displaced from other neighborhoods.

Maybe it's just that I'm still relatively fresh from college, but my friends span quite a range of incomes, with a few high-earners and lots of entry-level incomes ($30-40k/year). I'm sure I make more than average.

However, the thing the vast majority of us have in common are crippling student loans. Except for a lucky few, most of us put 25-40% of our take-home pay towards loan payments (also, most are paying more than the minimums). So, no matter what our income, we're all at the same level of wealth - negative.

FMF:

I was just wondering, if someone drives a high-end SUV, own antique cars, a bigger house, compared to others, does it mean these people don't know what is important to them or does it mean these people don't know anything about finances. I am just wondering what makes you to come to such conclusions about others.

RV --

It means what I said it means -- what they do doesn't influence what we do (much).

I made no comment on whether they don't know what's important to them, whether they don't know finances, or anything related, did I?

It's a chicken-and-the-egg situation. It's really hard, when you have a food budget of $20/week, to maintain social ties with people who expect you to go out to bars and restaurants, bring a nice bottle of wine to share, go to professional sports events, etc. It's also really hard, when you have just enough to get by, to maintain social ties with people who are on the edge of homelessness (the constant urge to bail them out when you know you can't, and not being able to do things you want to do that are relatively inexpensive, like go to the dollar theater, because they can't pay and "won't take charity").

Stock prices, like housing prices, are being artificially propped up. Look at the action from Wednesday, October 24. Stocks are down 200 points all day (and of course, there are the artifical "trading curbs" put on to ensure stock losses won't be severe), then a rumor is started that the FED is going to cut before their October 31 meeting and almost instantly the stock deficit is wiped out. Stocks are clearly dependent on cheap money to advance. Very dangerous when the money (5.25% FFR) was never that expensive to begin with.

Plus, with Washington in a housing bailout mood, many companies are going to lose money since they will be "forced" to restructure loans for deadbeat consumers who spent home equity to finance the boom of the past several years. Look at the beating the US $ is taking; the US stock market so far this year is one of the worst performing in the world, especially considering the USD's decline.

The equity/housing bust isn't going to be pretty. And likely won't end before 2011 or 2012.

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