WantToHaveALife wrote:
ColdEyesWarmHeart wrote:
I haven't had a permanent job since early 2008. I've been an agency temp since then. I manage to get work on average about 3 days a week, which isn't great to live on but a heck of a lot better than being on benefits. (And the whole procedure of going and signing-on (that's the process of going to the Jobcentre once a fortnight to sign for your benefit money) is hellish in itself.) Or it was, the temp wages were pretty good when I first started doing it but now it isn't much above minimum wage.
A few times I've had temp-to-perm roles but never been kept on permanently, I've never fitted in and often get bullied out of jobs (one memorable example, the clique I worked with were sabotaging my work) even though the bosses are happy with my work, my face doesn't fit there.
On the other hand, I always get asked back by every company I've temped for and my temp agency staff know they can call me last-minute to work that day, and I'll show up on time and ready to do a day's work. It's a shame this can't translate into success in a permanent job.
Another problem is that I have a great reputation for being able to work alone on boring stuff with no supervision, so I always get sent for those kind of jobs and I like them, but it means I don't have the team-player experience on my CV that every company seems to be looking for now.
seriously, what caused this recession to happen? could it have been prevented?
Banks were handing out mortgages without actually checking to make sure borrowers could actually make their payments. To bring in extra money, they were selling securities on those mortgages. That created a glut of MBA's fresh out of college who were trained to think they'd be millionaires by the time they were 30, and their egos didn't allow them to understand they were just living in Idiotville. So along with their $200,000 McMansions, $50,000 student loans, their $30,000 car notes, and over $10,000 on credit cards, they found that their $30,000/yr jobs didn't even pay 1/4 of a month's bills.
The first thing that happens is the credit card companies turn the accounts over to collections. What they don't realize is credit cards are unsecured, so collectors can't do a damned thing about the debts. So they try to fudge on house payments or student loans because they let themselves be intimidated by collections. They can't give up the car because that's how they get to their jobs. They HAVE to have that shiny brand-new car when the sensible thing to do is just get a $3000 beater they can pay cash for. Different things can happen, but they all follow the same pattern.
The next thing that happens is the car gets repo'd, which means Mr. Green MBA can't get to work, which means he gets fired. No job=no house payment, which in turn = mortgage default, followed by foreclosure.
And that's where the trouble begins for EVERYONE. When a bank forecloses, they sell the house at auction. There's no way in hell that they'll get what's owed. So what do they do? They sue the former homeowner for the difference. Well, you can't squeeze blood from a turnip. So how do banks recoup on their losses? They DON'T.
So what happens next? Interest rates for new loans go up, interest rates on long-term investments go down. AND there's a glut of homes on the market. No demand + high supply = devalued homes. So the people who realize they're upside down on house and car notes before it's too late can't even GIVE their homes and cars away to get out from under their debts. The bubble has burst. Banks can't get their money, so the money just bleeds out. Businesses hedging themselves through bank stocks lose their investment income. All those investors who were depending on mortgage securities for income find themselves going bankrupt. Which means businesses either close or lay off employees just to stay afloat.
So you have HUGE banks in control with most everyone's debts going nearly bankrupt and pulling all their investors down with them. They are "too big to fail," so you have government bailouts. People can't afford to borrow money with interest rate hikes, so they stop buying cars. Which means the Big 3 auto companies aren't selling cars. Which means they have to lay off employees. And there are a LOT of employees, and the unions aren't having that. So the government has to bail them out, too. The Fed increases how much deposit insurance banks can claim, and they start printing more money, which decreases the value of the US dollar. Prices of groceries and gasoline skyrocket. Which threatens the profitability of farmers. And more people apply for food stamps. And with increased unemployment, more people are filing unemployment insurance claims, which eventually means selling more bonds to China or raising taxes, most likely on the middle class. Either way, there are MASSIVE national debt increases that someone is ultimately going to have to pay for.
Technically, that's how we got here with banks having absolutely no accountability for the money they loaned people.
The real problem is overall people not knowing how handle their money.
First of all, "follow your dreams" is just bad advice for parents to give their kids and for teachers to give their students. Developing a strong work ethic is the first step in training kids for "real life." And it helps to lead by example in showing young people what being a good money manager looks like. Before you follow your dreams, first get yourself on solid financial footing with a "real job" before trying to do something big. My dream? I write music. Is that something that brings in a lot of money? Only for certain people, of which I am not. So what do I do? I have a church gig that pays competitively, teach piano lessons at a college extension, play in a band, and I take every gig I get offered. Sure, I'm still under the poverty line, but my income alone pays almost all of our household bills. Meanwhile I write and perform my own music, get some of my work on Youtube and Soundcloud occasionally, and network every chance I get. I don't how long it's going to take to get some kind of payoff, though I did make a little money on a work-for-hire project for a non-profit I've been courting for the last few years. I'm also saving every penny I can for some equipment purchases for something that could potentially be a huge money-maker that I could also use to promote my own music. It's a dream worth working for, but the point is you can't follow your dreams if you don't have a plan.
Second, it is generally a bad idea to incur massive student loans for a college education. Something is terribly wrong when someone can have $140,000 student loans for a degree in journalism and end up being a hair stylist. There's nothing wrong with being a hair stylist, but it's not something you need a $140,000 degree for in an unrelated field!
Third, unsecured debts are just a bad idea. If you want something, earn the money and save up for what you want. Don't use credit cards. EVER. FOR ANYTHING.
Fourth, as I've already said, you don't need to pay $20,000+ for a new car. $3,000 is plenty enough for something that will get you to and from your job. If you do really well in your career and you have profits pouring in, sure, go for it. But you don't need anything you can't pay cash for.
Fifth, don't try to buy the nice 5-bedroom McMansion in your first 5 years on the job. Just rent. When things start working out for you, buy a 3-bedroom trailer on the edge of town for between $35,000 and $50,000 (to include the lot). And make sure you get a 15 year, fixed rate on it AND you can afford those payments. If you can't afford it, DON'T sign the mortgage!
More than anything, always pay IN CASH. Sure, that means you'll have zero credit--but if you're paying in cash for everything what do you need credit for? House mortgage? All you need is a manual underwriter and the bank will hand you all the money you need on zero credit. All you have to do is show that you have good income and no bad debt--and I mean not so much as an unpaid library fine. Just don't do anything stupid and you'll save yourself the pain that a lot of poor MBA graduates are suffering through while they live in their parents' basements. If you want to be rich, do what rich people do. If you want to be poor, do what poor people do. It's that simple. And if more people understood that, we wouldn't have idiotic situations like housing market bubbles that end up screwing over the vast majority of us.
31 Oct 2012, 9:58 am
