Stock Market

I will never understand the stock market. I really thought that with the president elect and the gas prices coming down that people would start spending, albeit a little more wisely, but that the population as a whole would begin to spend a little again. Although I have been shocked and dismayed by the news articles I've been reading as of late. Today was the worst article yet, it was about the housing debacle and how a man who goes to work every day and brings home a salary of $30,000 is living in a $500,000 home in California. His house payment is affordable now but he is on an interest only payment plan. In 2010 when the ARM expires, Mr. $30,000 will be paying a monthly mortgage payment of $12,000/month. I don't even know what to say about this, I guess in my naivety, I thought the banks would lend like this and didn't truly understand what was going on. Overextending is one thing but truly ruining someones life is entirely a different story. So it brought me back to reality and understanding about how to live our lives. In the bible, it says that we should save 10%, tithe 10% and live off 80% of our salaries. So if you look at this model and the "experts" advise, your home should cost you 30% of that 80% of your salary. So let's take $100,000 salary - you should save $10,000, tithe $10,000 and live on 80,000. Your house payment should be $24,000/year or $2,000 or less. If I take the example above with the man making $30,000, he should save $3,000, tithe $3,000 and live off $24,000. His house payment should be 7,200/year or $600/month. With this type of math, there isn't anyway that he could afford a $500,000 home. So do the math with your own payment and see where you end up. Hopefully along this journey, we can adjust to ensure we are spending 30% or less on our housing from here on out.

God Bless.