5.08.2006

Get your bling here!!


Do you think there is a direct correlation between MTV Cribs and the housing bubble?

I have thought about the very same thing on many occasions...how the MTV Cribs, pimp-my-ride, bling-bling attitude IS having an affect on society. I was talking with a title rep friend the other day, and they mentioned the "bling factor" that everybody is striving for and I said the same thing: that everybody wants to "live" like "mtv cribs" but they don't have their albums on the charts yet, movies in theatres yet, or play for a pro team yet. On a side note: the title rep didn't like the financial situation that many people were getting into, but they said the same thing that soooo many others say "if we don't do the deal, somebody else will".

I don't think MTV Cribs or any of those things CAUSED the bubble, but they are definitely influencing the perspective of generations of Americans. I think it extends to way more than housing though...it's the cars, big chrome wheels, tv's in the cars, Crystal in the fridge, etc. It is a "look" that you have to have if you want to be "somebody". MTV Cribs even has their own line of home furnishings...for those who want to "live like a celebrity".

There has always been an interest in "lifestyles of the rich and famous" and there always will be. The difference is that living that "lifestyle" has become more "attainable" through lax credit standards. Years ago, if you wanted a TV, you saved your money, and bought a TV. You didn't make buying a TV a 4-5 year process. I recently heard an ad on the radio where you can lease and/or finance wheels for your car! Call me crazy, but if you have to lease the wheels to put on your car, then I think your priorities are slightly out of whack. But hey, at least you are living a "pimp-my-ride" lifestyle!

Almost every single person in MTV cribs...says "you ain't a playa without a plasma on the wall". Go over to Best Buy or Circuit City, and EVERY lcd and plasma tv has a little sticker with a bow on it "take me home for $47/52/77/120 a month" "no interest for 18 months on TV's $299 and up" etc. Sure, many of those MTV Cribs were done by professional designers, for millionaire sports stars, actors, or recording artists. They can actually afford to pay cash for the TV, and not finance it over 3-5 years. Debt is what happens when people try to live a life they cannot afford today. Everybody wants to live like a millionaire, but does anybody really want to do the work, or wait the time it takes to REALLY be able to afford these things?!?!? Why wait until tomorrow, when you can finance today?!?!?

It is even having an impact on children’s toys. I happened to be in Target the other day to get some detergent and other necessities. There was a display in the toy section for remote control DUB cars. If you don't know what DUB Magazine is, here is the link. Anyway, these cars are all "pimped" out with big chrome wheels, lowered, and all the bling you can imagine. Check the 2 links I just highlighted to see what is showing up in the toy section. There is nothing wrong with the cars, bling, etc. in and of itself, it just becomes a problem when people make it a priority in life, and will go into great debt to "look" like they are a "baller".

There are lots of books written about how to become a millionaire. It doesn’t involve landing that big pro sports contract. Here, I'll give you a big hint: it involves living beneath or within your means, and not taking on needless debt for things like "bling".

So, how are you going to feel when your taxes go up because the government decides to bail-out all the people that wanted to live an MTV Cribs lifestyle on a Gomer Pyle income?!?!? How much are you going to wish that there were more financially responsible people in this country?

So that is what I think. I don't think any of those things CAUSED the bubble, but they are definitely influencing the perspective and consumer spending of generations of Americans. Several months ago, a broker friend was telling me that their daughter thinks she is getting an H2 when she turns 16. The thing is, she thinks she is entitled to it, and that you are a nobody without it. It seems that many children in their teens see the lifestyle, but they have no comprehension of how hard it is to really earn the 50k needed to buy a Hummer...and how old it gets spending $500-1000 a month on gas to keep it running.

I think the biggest disservice we can do for our children is let them see what the media blasts out each and every single day, without the accompanying education that goes something like this: if you want that, you better get that sports contract right out of college, or be prepared to live within the means that you can generate on your own. I think schools don’t do us any favors by not offering some real world financial training. By the same token, and perhaps primarily, we as parents should be doing the same for our children at home. Are we the kind of parents who practice safe financial principles? If we are, are we passing them on to our children, or are we letting the TV instill the attitude of entitlement that is so prevalent right now. If you don’t think there’s a problem, choose a high school in you area that represents a median income cross-section for your area, not the poorest, not the richest, and drive through the parking lot right as classes let out for the day. Do you like what you see? Do your kids know what it takes (financially) to run your household each month? If you ask them how much it costs every month to live like they live, would they be in the right ball park, dollar-wise? At what age SHOULD they be able to figure that out, or be trusted with that information about our family? If you have a 15 year old daughter who thinks she SHOULD have a car at 16, does she know what it costs to buy, then maintain it? Does she know where that money would have to come from?

I know there are many responsible parents and children out there, but I have a feeling their numbers are falling behind those of the MTV generation. If the number of people overextending themselves to finance homes, cars, and consumer "lifestyle" items is any indication, I think we will be in for trouble in the long run if we keep extending credit for everything in the world.

I think that people chasing a lifestyle is definitely contributing to the consumer spending that is being financed through this housing boom. Debt, and living beyond your means, whether through housing, lifestyle, or a combination of the two can certainly get some people in some REAL trouble.

1 comment:

Reach Upward said...

This topic is one of my hot buttons. I have been in positions to see the inside story on the finances of people that get into financial trouble. It's frequently amazing how much of nothing of any value they have to show for their debt load. It might feel good to accumulate all of the consumer goods, but when you discover your inability to pay for them, what can you re-sell them for? Crystal from the fridge -- $2 at your yard sale. Maybe $5 if its still in the box. There are so many people around that don't get the clue that you've got to pay the fiddler in the morning after dancing all night.

Your point about teaching our children is well taken. I have a son that scraped for months to finally buy his own GameBoy. His younger brother seems to be able to do this kind of thing all of the time. My older son doesn't understand it. He puzzles over it as he sips a SoBe for which he just paid $1.50. He aspires to adopt my '95 Ford Taurus when he turns 16, but I explained to him the other day the reality of automobile insurance and the value of a good student discount. I explained that driving is a costly privilege for which he will have to cough up real dough. It's hard medicine, but I'd rather have him learn it now than when he starts getting those endless credit card offers in the not-too-distant future.