Home Value and Self-Esteem
Are We Only As Important As The Size Of Our Bank Balance?
Lately, everyone sounds so beat up. It’s as if we’re all really tired from the past few years, worn out from the irrational exuberance we coveted, and exhausted from the bursting of the national – and our own – housing bubble.
But as we watch our home value balloons deflate, it’s as if more than a number is being lost. The voices I hear are beyond tired. It’s as if their self-esteem has deflated as well.
When you feel as though you’re a punching bag, always getting the hard knock, it’s tough to stay on the sunny side of life. Each week on my radio show, when I talk about the latest news in money and real estate, the voices I hear talking back to me most often sound as though their owners are living on a dangerous edge, and are starting to tip over.
Some of my callers sound so beat up – and not surprisingly, they’re the ones who have lost the most: home value, job, health care, emergency funds, cars, and even their marriage. All of these things that are such important, “core” values in this country have been wiped out for millions of so-called “working Americans,” even if many of them aren’t working that much any more.
Are our home values and self-esteem so tied together that we only feel as important as the size of our bank balance?
A few years ago, I’d go out to a party and hear everyone bragging about how much their home went up in value that week. Home values were rising so quickly that it did seem as though you were adding an extra grand or two to your net worth with each passing week. I think many Americans felt pretty smart that they had mortgaged their souls in order to grab their piece of the American Dream.
And now that a home is just a place to live in, rather than a vessel of ever-increasing wealth, we suddenly don’t feel or sound as smart. And yet, you have to live somewhere. It’s important to plan roots into a community, especially if you’re raising a family.
What we’ve all discovered is it’s just as painful to lose paper wealth as it is to lose real wealth – and sometimes the two are intertwined. Many Americans who lost their jobs during this Great Recession learned how fast paper wealth can go up in flames, just as the paychecks stop coming.
One of two things will happen – either we’ll start to adjust to this new, lower standard of living and the economy will – ever so slowly – start to right itself, or we’ll rebel. First at the polls, and then maybe in the streets of our subdivisions and neighborhoods.
Please leave your comments on the blog.
over a week a go I emaile d Ilyce for information on Revers Mortgage plans. I have not received a reply ~ nor have I seen it addressed on her site. I think this is something that many of us would like to know more about.
Your last paragraph is writeen as an ” either or” scenario. I believe that both of the actions your describe will take place. That is, I believe that citizens will adjust tkheir living styles downward AND they will also rebel at the polls when they learn what (who) caused the credit bubble, its collapse, and the excessive federal government deficit spending. Changes need to be made in the way our federal elected officials and the federal reserve bank cartel are allowed to enact policies and legislation.
Well said! I think the odds are we will have to accept the lower standard of living. We are competing with the low wages of workers in other countries. Jobs will continue to be outsourced. The bright side is I don’t miss the materialism. Friends, family, and a good sunset are much more rewarding! Thanks for the articles.
I’m seeing a revolt coming down the line, as this article recommends, “Ecstasy of Empire”, at URL reference, http://www.infowars.com/the-ecstasy-of-empire/, by Paul Craig Roberts from August 16th, 2010. Six years ago, I clipped an article and taped it inside my bureau door. It came true!!! This article from 2004, “Offshore Face-Off”, by Timothy Aeppel in The Wall Street Journal; Paul Craig Roberts, Chairman, Institute for Political Economy (former assistant Treasury secretary for economic policy under the Reagan administration and was once an avid free-trader), stated that he was concerned “that the comparative advantage [theory] might be broken.” and that economists needed to look at real world conditions instead of just spouting accolades against free-trade protectionism. Mr. Roberts goes on to really predict part of what has happened in today’s world:
“In my opinion the issue will be settled by developments in the U.S. labor market and not by economic debate. If there is a recovery in high-productivity, high-value-added jobs in the U.S., the issue will dissipate. However, if U.S. labor continues to be reallocated toward lower-pay, nontraditional, domestic services, the issue will come to a head, especially as wages in domestic nontradable services would experience downward pressure both from entry from displaced manufacturing and knowledge workers and from high rates of legal and illegal immigration.”
….well, after the rally, our reduced standard of living is that we have lost 33% of our wealth, about $13 trillion in the USA…..if you notice, the Forbes Honor Roll funds, and all of them…are down 30-50% of what they were OCT 2007. It will take years to break even, to get us back to OCT 2007. Mnay of us have a low, conservative standard of living, we were slaughtered too. The market make it, and the market take it…one thing, we all learned you cannot trust the stock market to give you gains in a moderate times frame. There are two kinds of investors, ones that have suffered huge losses…and those that will. As Buffett said on CNBC…..three times since 1974 he has lost 50% of his managed funds….now he may not get it back, despite being a billionaire…he is 80.
Good article. I think you’re right; our self-esteem is too tightly tied to our house and other acquisitions. That will need to change so we can move on and do what we need to do to survive.
November will bring hope..or hopelessness
JK, Take a look at all of the reverse mortgage articles on the site.
Go to https://www.thinkglink.com/reverse-mortgage and you’ll see dozens of articles on reverse mortgages.
I think that we will see a revolt at the polls and Americans will change their life style – some will consider it a lowered style but I believe many others will see it as a more practical and less stressed style. As a REALTOR I have seen an increase in people who are able buying homes, either destressed or non destressed properties. I think the economy is creeping to improvement, but our ‘new improved’ economy will look a lot different when it has recovered. Let’s hope that Washington will be somewhat ‘new and improved’ when it’s all over as well.