A Rude Awakening

The American Dream has been a motivating factor in driving lives in this country and others for more than 200 years. People flee their native lands for a chance to experience the freedoms this great nation offers its residents. Among the top of the dream list is home ownership; a chance to carve out a little piece of land to call your own to raise a family. Images of a small house with a yard, a garden, a white picket fence with kids and a dog playing in the yard are iconic to America. Young people work hard to earn enough to make that dream a reality, only to find out that the dream is really a nightmare.

The prices of homes have steadily risen for generations and continue to climb, putting them out of reach of most people. It has been said that the safest investment one can make is real estate, since it doesn’t depreciate. People will always need land and will pay through the nose to get it. In our free market economy, demand sets the price and when the demand for houses goes up, so too does the price. This is what drove the economy into collapse in 08 when the housing market crumbled. The government had the bad idea that everyone deserved to own a home and backed bad loans to put economically challenged people into homes they could not afford. Now, many of those people are back into rental properties or out on the street.

The price of a home is not the only part of the nightmare. Maintenance is expensive. New roofs run into the thousands of dollars, new air conditioning systems and repair are so expensive that a home owner needs to get estimates from several contractors to find out how much it will cost. It’s like eating in a restaurant with no prices on the menu; if you have to ask how much an item is, then you cannot afford to eat there. The saddest fact is that the markup on parts and labor is felonious. These contractors live better on my money than I do. Any serious structural repairs such as a foundation or roof require a second mortgage.

The biggest problem with home ownership is not the cost, nor is it maintenance, however. No, the biggest problem is the other half of a house payment: taxes and insurance. A mortgage payment is principle and interest, but it also the money that goes into these associated costs. The problem is that while the principle and interest remain relatively stable, the other costs fluctuate annually, and can swing a wide range. The taxes are based on the assessed property value and rates are assigned by the municipalities. When schools want new buildings, count on tax rates going up. When the utility districts get denied a service rate hike, count on tax rates going up. Even when property values drop—as they have for the past two years—the taxes seem to keep going up because the rates are increased.

Insurance is the biggest scam industry in the history of mankind and lead to any number of sad stories of human suffering. You pay money every month in fear of the off chance that you may need some money to repair damage to your property. If you live in the house 20 years with no claim, you do not get the money back. Yet in that 20 years, chances are that your premium was increased regularly. You pay, yet you have no benefit. What other industry gets money on the chance that something might happen? Gambling. In Vegas, however, there is a chance that you will get a payout as well. The only payout you get with insurance is if a disaster hits, and at that time, even that payout is insufficient for the suffering you experience.

The American nightmare continues as I wrestle with the insurance company who wishes to raise my premium for the second straight year. The only reason that the agent could give to me was that the company decided to change their rates. The company decided that they want more money. Because they think they need another corporate jet, I get yanked by doubling my premium over the past two years. This is wrong on so many levels, not just that corporate greed pisses me off, but also because I am trying to stay in the house on a single budget and I had it all planned out and working, but now I have to rework the budget to accommodate another insurance hike.

It is almost enough to make me think about selling, but that leads to another nightmare: selling a house in this economy where I am certain to lose money on the sale. Yes, the American dream is not the dream it once was. We wake up from that dream to a dismal reality. Perhaps it is time to dream a different dream. Perhaps one that involves Jennifer Anniston and cherry Jell-O.

 

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6 Comments

Filed under Personal, Society

6 responses to “A Rude Awakening

  1. Halee

    Do you have to have insurance? What if you started putting that money instead into some sort of savings account? Don’t credit unions have better interest rates? Or did I dream that up? It just seems to me that rather than gambling money on insurance it should be put into a bank and saved up.
    Someone told me before I got married that if I couldn’t afford all sorts of insurance especially health then I shouldn’t be getting married. My question is what did people do before insurance?

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  2. They lived just fine before insurance. The problem arose when tragedy struck and people had life savings wiped out to pay for repairs (or medical costs depending on the tragedy) so an industry was formed where people did just what you suggest: put some money aside in a savings account for just such an emergency. This would be fine except that the businesses started managing these accounts and then started making investments with that money (ostensibly so the could afford to give you more coverage than you put in) and then began to think of that money as theirs rather than yours.
    It became the scam it is today when the insurance lobby convinced congress to make it mandatory to have insurance. All lenders require insurance to protect their collateral in the case of disaster before the loan is paid for.
    Homeowners get it from both ends.

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  3. Halee

    I am so glad the government made that decision for me, I just don’t know what I would have done…

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  4. Interesting historical note, St. Thomas Aquinas (noted theologian) considered interest and insurance to be sins, under “usury” because there was not product being

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  5. oops baby was helping. Anyway, there was nothing tangible changing hands so he classified it as dishonest.

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  6. Michelle

    Jennifer Aniston I knew about, cherry jell-o I did not know about and especially the combination of the two. 🙂

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