HOME PAGE STEVE SOLOMON'S PAGE Steve Solomon's Stories
In a modest but quiet city neighborhood
lives an up-and-coming young family named Jones. The Joneses have
carefully made all the widely agreed upon moves to earn success
and prosperity. Everyone who knows the Joneses also thinks they're
doing fine.
Mr. and Mrs. Jones are the same age: 34
years old. They refrained from marriage until graduated from our
state University at age 22. Then, for four years they both worked
and saved even more diligently than they had labored in college,
frugally accumulating a down payment for their dream home. They
bought something realtors call a starter house," a
very small, unpretentious, 3 bedroom place, only $15,000 down
and a mortgage of $55,000 with the rest of your life to pay it
down. To the young and eager Joneses this ticky-tacky house seemed
an idyllic rose covered cottage. They thought it was plenty savvy
to reduce their down pavement by paying the asking price and slightly
more interest.
Promptly upon becoming a proud mortgage
holder, and with great optimism, Mrs. Walker Jones started baking
two babies as close together as possible. At the time of this
story the youngest child has reached first grade and Mrs. Walker
Jones is back working full-time. What a relief she feels to have
two incomes; what a relief to get awav from her difficult youngest
child during working hours.
The Joneses work in different fields but
their salaries are virtually equal. And being very average Americans,
their salaries are average: each grosses exactly $1,250. per month.
Mr. Jones has a long-hoped-for entry-level executive marketing
position with a large corporation; Mrs. Jones, her career set
back by childrearing, is now learning to handle real-estate closings
for a local escrow company.
Though both work and have very reasonable
hopes for advancement, the Joneses' budget reveals an all-too-common
American tragedy.
ITEM | EXPENSE | BALANCE |
Monthly Gross Income | $2,500.00 | |
House (PITI) | $700.00 | $1,800.00 |
Cars, 2, All Expenses | $562.50 | $1,237.50 |
Groceries (incl. 4 bag lunches) | $425.00 | $812.50 |
Federal Income Taxes | $165.00 | $647.50 |
Social Security Deductions | $175.00 | $472.50 |
State Income Taxes | $70.00 | $402.50 |
Unemployment & Worker's Comp | $45.00 | $357.50 |
Telephone, Electricity, Heat | $150.00 | $207.50 |
Clothes | $150.00 | $57.50 |
Entertainment | $57.50 | $0.00 |
Children's Allowances | $50.00 | [$50.00] |
Saving For 2 Week Vacation | $80.00 | [$130.00] |
House Maintenance | $50.00 | [$180.00] |
Furniture Ensemble On Credit | $125.00 | [$305.00} |
Ever-rising Credit Card Interest | $50.00 | [$355.00] |
Illness | $100.00 | [$455.00] |
Christmas? Newspaper Subscription? Monday Night Football Beer? Mamawonchabuyme's? Mrs. J's Secret Wish List? More and More Credit Card Interest? | ? | ? |
The Smiths and the Joneses started
out very much alike. They all came from the very same small Oregon
city, became teenage sweethearts at the same high school, attended
the same university and are the same age. And like the Joneses,
Mr. and Mrs. Smith also graduated Bachelors of Arts from our state
university in the same year the Joneses did, when they promptly
married too, just like the Joneses. Then, just like the Joneses,
the Smiths also worked hard for four years, frugally accumulating
a down payment for their dream home. That accomplished, Mrs. Smith
also baked her own pair of babies.
Actually, subtle differences between the
two couples first became apparent during their teenage years.
Both the Joneses and the Smiths were already serious couples in
high school, but the Joneses were what their friends called "grinds,"
intent on future success by getting excellent grades. Most evenings
and weekends they studied together. The Smiths, exuberantly bubbled
with joi de vivre, and never saw much sense in denying
themselves fun in the evenings, especially when without considering
that much work it was still very easy to get passing grades, even
B's and occasional A minuses.
So no one in high school or college pegged
the Smiths as most likely to succeed, and in fact, their jobs
after university weren't the career sort of white collar entry-level
junior executive positions the Joneses competed for. No, during
summer breaks and after graduation the Smiths did more proletarian,
outdoorsey things like planting trees on piecework.
Then Mrs. Smith got an easier, minimum-wage
job doing field work at a winery, where her natural warmth and
easy facility with Spanish (picked up while at university and
during summer vacations bumming around on Mexican beaches) led
her to promptly be promoted to a field "foreman" running
a latino crew. Soon she was making very good money.
And Mr. Smith, who had an innate commitment
to being responsible in contractual relationships and an ability
to recognize and relate to other peoples' self-interests and viewpoints,
soon upgraded his contacts in the forestry business and became
a self-employed contractor, living in a tent doing timber surveys
in summer. For a couple of months each year he managed a Christmas
tree sales lot in Los Angeles for a percentage of the gross sales.
After one year of too much distance between
them, Mrs. Smith left her 9-5 at the winery and joined him in
the woods and on his annual trips to LA. Though they now only
worked about six hard overtime months a year, and hung out the
rest, during that time the Smiths made about the same amount of
money that the Joneses earned all year. The Smiths had nothing
of what the Joneses called "job security," but they
did have the tax benefits of being self-employed and kept a lot
more of their income.
When it came time to make their first
nest, the Smiths chose a life-style of independent self-sufficiency
rather than buy what the realtors call a starter home, mortgage
and all, like the Joneses did. Mr. Smiths prowled the countryside
looking for a small, cheap and rather undesirable piece of raw
land that they could build a house on, their prime consideration
was that they own their property free-and-clear