How to Financially Survive America
By: Right Smack In The Middle
Tags: Coronavirus, Poverty, Wealth Gap, Income, Real Estate

How to Financially Survive America

I’ve recently begun watching Property Brothers, and it is unsettling. The premise is simple: a couple seeks to escape from problems that only exist in a 1st world, non-immigrant setting, such as:

We want to be close to night-life and have a short commute to work (Uhm, so you want to spend a shit ton of money just so you can have a 20-minute commute as opposed to a 60-minute commute that may cost you a couple of dollars a day on a train or bus and where you can get some reading time done to expand your brain)

Oh, this house looks like it was designed in the 60s. We want everything open-concept. (Then go sit out in the yard. Everything is an open concept, even the trees).

We’re living in a small condo in the heart of the city, and we have a newborn. We need more space (how much space does a newborn take up?)

Uh, this kitchen is so small. (Uhm..)

We’re living in our parent’s home, and although it’s really nice in a great neighborhood, we need our own place (yeah, try being born in an Indian household where if you are the first-born son, you are expected to take care of your elderly parents)

Photo by Brianna Santellan on Unsplash

The most brain-melting portion of the show begins within the first 15 minutes where the couple will state that their budget is a million dollars and one of the property brothers will tell them that they can’t get everything they need in that budget.

A million dollars.

I’ll be lucky if I ever see that kind of money.

What in the F.

After brainwashing this poor couple into thinking that they can’t get their dream home for a million dollars, the property brothers then show them a number of “horrible” homes — homes that we mere peasants would be happy to live in — and tell them they can make everything modern and open concept for them (basically means to knock down walls).

Low-Budget Dream House

By the end of the show, it appears that their initial budget was (1 million, 800k, 600k, etc.), whatever that number is, that’s the number they end up landing on. For example, the brothers don’t think — ok, their budget is a million dollars, let us deliver the job for 800k and save them 200k. Instead, they’ll find a dumb house for 700k, and then do 300k worth of renovations so they land at exactly 1 million.

This makes me think that I shouldn’t tell my real estate agent my actual budget. So if my budget is a measly 400k, then I should actually tell them 200k.

Dumb Ass Real Estate Prices Exacerbate the Wealth Gap

Indians have intuitively known about Mazlow’s hierarchy of needs for years with the phrase “roti, kapra, aur makan” which literally means “bread, clothes, and shelter.” And yet, our society fails at providing all three basics to its citizenry. In such a wealthy country like the U.S., no one should be going without these three crucial artifacts, but yet it is the truth.

Photo by John Moeses Bauan on Unsplash

8 million Americans have fallen into poverty since May due to the Coronavirus pandemic. Nearly 20 million Americans are out of work. FeedingAmerica.org estimates nearly 50 million Americans may now be food insecure.

Now, these issues aren’t new. Homelessness, poverty, and food insecurity have been rising steadily in America for several years. The pandemic only sought to accelerate the issues that America already had. The wealth gap has only expanded between the rich and the poor. As our President continues to brag about the stock market, he fails to understand that only 35% of Americans own stocks outside of a 401k. Only about 40 to 50% of Americans actually have an employer-sponsored retirement account such as a 401k.

So you have more than half of Americans without any avenue to actually grow their wealth.

Real estate, of course, is a great way to grow your wealth. But the barrier to entry, especially into markets that actually matter and will help you grow your wealth, is so massive that if you don’t have money, you will continue to not have money.

My biggest anxiety when watching shows such as Property Brothers is: how can anyone actually afford a house? Even if you somehow came up with a 20% down payment on a million-dollar home, your monthly payments would be $3,000 — $3,500 on a 30-year mortgage (based on today’s interest rates). This is 50% — 56% of my pay, and approximately 87.5% of my take-home pay! How in the world is someone supposed to afford clothes, utilities, and have money to save.

Most Americans barely have savings of $1,000 to $5,000. While some of that can be attributed to personal choices, much of that is due to the ridiculous standard of living across American neighborhoods.

State and Federal standards of poverty are far below what would be considered a “livable wage.” We can use the ALICE threshold or Asset Limited Income Constrained Employed which is a better reflection of poverty levels in relation to specific neighborhoods.

Based on 2017 numbers, a living wage for a 1 adult, 1 child household was $27.16. Morph that out based on the size of your household. Furthermore, close to half of all households in New York have housing costs that are greater than 30% of their household income, which is unsustainable and cuts into the ability to afford food, clothing, and savings.

The depictions of wealth and manufactured problems on shows like Property Brothers feed into America’s consumerist mentality.

Even rental costs are out of reach of us proletariats. The minimum income required to shack up in a place like East Harlem would be $118,600. Even Queens isn’t fun anymore as the average rent for a place like Little Neck is $2,073 and requires a minimum income of $82,920.

Photo by Jose Alonso on Unsplash

So how can the working man possibly survive and rise up in this world where all rules seem to be working against them? Well, here’s my strategy:

Find a home with a small kitchen and lots of walls so at least I’m owning something instead of renting.

Put your money in crypto and stocks.

Read sites like Financial Samurai and Mr. Money Mustache for ideas on how a proletariat can escape the misery.

Vote smart, because legislation actually does help.

My wife and I actually enjoy Property Brothers now. It’s a great source of comedy. As the great Marie Antoinette said, “Let them waste their money!”