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June 12, 2009


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First, I do agree that the mortgage (while well within the NYC market of the past decade--i.e., he didn't go out and buy a palace) was too much relative to his income. 5x yearly income (if his wife wasn't working at all) is too high, clearly. And obviously I don't know what his other household expenses were.

But, second, I really wish that if people *must* go through this kind of analysis that they would do a little background research first, so that their analysis might be better-informed:

(a) The job this guy did simply *does not exist* outside of major metropolitan areas, and only a few of them, at that. There is no equivalent job in Boise. There just isn't. He can't say "Well, I'll just move to Kansas, take the Kansas version of my job, and lead the Kansas lifestyle on its Kansas salary." He would basically have to start his career all over again, doing something else entirely. (Maybe he'll have to--but I doubt anyone would disagree that that would be a huge setback.)

(b) He clearly wasn't earning that salary over the entire 15 years. The article isn't incredibly clear on this, but it sounds like he worked his way up from a relatively low level. So who knows what his gross income over that period was (though it obviously grew at some point so he could save a $200K downpayment).

(c) There is such a thing as taxes. If you earn around $200K and live in NYC you are coughing up roughly 40% of it in federal, state, and local taxes (you are within the AMT zone of doom). So the poster who wants to know why this guy didn't save 1/3 of his income should ask himself if *he* would be able to save 33% of his gross if he also had to pay 40% of his gross out in taxes (i.e., living on 27% of gross, in this guy's case, $57K).

(d) If he lost his job in 2007 and has been able to make up what is at least a $2200 shortfall every month (his mortgage payment minus his income, with NO other expenses taken into account, and remember that for some of this period, pre-Palm job, he had no income coming in), then he had at least $40K in savings. Probably a lot more, but I will generously allow for some severance.

So, except for the mortgage (which is a big exception, no doubt), it doesn't sound to me like this guy actually lived a lifestyle all that out of proportion to his income. (Buying a flatscreen TV when you make $200K isn't crazy.) He had a relatively stable job. Anyone inclined to cast stones should seriously ask themselves how well they would be doing after one and a half to two years of unemployment with no ability to get back into the field that they'd built up their experience in over 15 years and with two young kids to support. And, after all, didn't the guy swallow his pride and take "any job to support his family?"

The tinge of envy and schadenfraude that sometimes enters stories like this is not at all attractive.

I like the comment by Sarah that: "The tinge of envy and schadenfraude that sometimes enters stories like this is not at all attractive."

Yes, the guy described in the article messed up.

Have we not all messed up from time to time?

Yes, we should try to learn from his mistakes.

But we should try to learn by looking at the man or the woman in the mirror, not by pretending to ourselves that we are "better."

Some of us do indeed manage our money more effectively. We should be grateful that we were graced with experiences that helped us see the right path that perhaps this other fellow was not so graced to see.

We are all scared about the possibility that this sort of thing could happen to us. It's that fear that generates the harsh reactions. It's like when we see a terrible car accident and we assure ourselves that "he must have been drunk."

He might have been drunk. He might have just been unlucky. We don't know and we are better off not engaging in speculation on that aspect of the thing unless we do know.

The goal should be to offer a helping hand, not to put down "the people who are dumber than all us smart people."


The guy's family is all in NYC. And he worked his way up, without a college education (?), in a very NYC-centric job. Moving to the boonies away from the people and places he knew after he got married probably wouldn't have worked out too well. I admire the guy for being can-do and getting a job where he can, and his wife has rolled her sleeves up too. Good luck to 'em. And while I enjoy reading them, I honestly don't understand why people put themselves out there in these articles to be picked apart. Not for me!

Mr Araya seems to have some good trading skills and his attitude to try anything will do him good in the long run. Surprising he was an oil trader who was let go in 2007 and missed the outrageous run up in oil during 2008. He could have made millions.

One disadvantage is his lack of cross functional skills and education, this will make it hard for him to get back on his feet. But when the market comes back he should be in line to find some work.

His big mistake was that he was so concentrated in his career and would need an emergency fund of about 1 year to keep him going in rough times. However his attitude is a huge plus!

I was working for a start up at age 27, earning $145K per year when the company folded. I had some money saved up but found myself with an abundance of time. After doing some sporadic consulting gigs I worked part time making and selling pottery for $10 per hour, this was only for 2 months and it helped to pass the time quickly. Shortly after another good opportunity came up that was a pay cut from the previous job ($115K per year) but was still a good opportunity to keep building experience.

Overall, this guys attitude tells me he will land on his feet. It just may take a while.


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