Perspective: I spent the weekend with two friends who've lost over $1 million

[Atman]

Combined. Probably even more.

Here's the irony...I lost our house back in the dot.com bubble. I lost my classic 320i. My wife and I lost a year of "happy family." I -- we, my wife and my kids -- lost it all in the last bubble. But "all" was practically nothing by comparison to what is happening today: back then we had a modest Cape Cod style home worth about $120,000 for which we paid $85,000. Today I know people with $85,000 out-buildings on their 4,000 sqf homes, while we feel thrilled to have a nice 1,100 sf rental.

Last weekend I went snowboarding. I picked up a friend on the way; he's the guy with the out-building, and my mom doesn't mind if he parks his Infiniti in front of her manufactured home while we're on the mountain, since it's right off the interstate. So we met, and then drove to Vermont and parked in front of my wife's friend's slope-side condo.

I have to back-track here. While my wife and I aren't worried about Obama increasing our taxes any time soon, we have have a comfortable income. We are also fortunate to have a very diverse group of friends/colleagues. Some of them happened to converge this weekend. And it was enlightening.

On the drive to the mountain on Saturday, I asked Infiniti-in-my-mom's-driveway friend about the man-cave he'd been threatening to build in the pristine empty basement of his giant, empty DINK home. He laughed, and matter-of-factly told me how he'd lost close to $450,000 in the last few months. Stripper pole and pool table are on hold.

So we drove to the mountain, parked in our friend's slopeside driveway, and enjoyed the day. We had been invited for an apre ski cocktail, so we dropped in. This guy was just back from a week-long ski trip out West and was enjoying the weekend at his five bedroom (plus loft) ski condo in Vermont. He, too, moaned (but not groaned) about losing over half a million dollars in the the last couple of months.

And neither of these guys seemed phased. Probably over a million clams just disappeared, and hey...let's go skiing.

WELL OVER A MILLION DOLLARS LOST among two friends, and neither of them seemed the slightest bit affected by it. While I'm using coupons and discounts to go snowboarding on the cheap. And we're all at the exact same place: same mountain, same lodge, same everything. Except for that I really have so little to lose by comparison. It's almost comforting.

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[bkkyosemite]

1. But if it were their last million would they still be going skiing?

[CoffeeCat]

2. So, are you saying that the two who lost...

...a combined total of more than a million--are so well off that it doesn't phase them?

That's cool...if that's the case.

Did these friends mainly lose the money in the stock market? Are they otherwise employed and living
in houses that they aren't upside down on?

If that's the case...that's good.

[Atman]

5. Both are fine.

One is mostly family money, got the condo in an inheritance. The other guy is late thirties, made a lot of money in sales while the economy was supposedly strong, and he's paranoid of debt. Good for him. Both lost mostly paper and are hardly hurting. At least, as far as I know...who the hell knows who is going down these days.

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[IrishBuckeye]

6. So they went from being rich to...being rich. I don't get the point of the story, sorry. /nm

/nm

[Atman]

8. Maybe it was more of an observation than a point?

These guys only know there is "a problem" out there relative to the performance of their stock portfolios, not because of a direct impact on their lives.

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[IrishBuckeye]

11. Except he said the one couldn't build his batman outhouse or whatever

so it is having a impact on their lives but for the most part they are to rich to notice it...I guess?

[ogneopasno]

3. When you got nothing, you got nothing to lose.

Uh, I guess.

[Tandalayo_Scheisskopf]

4. Around here...

There are lots of people freaking out, beating the wife and kids and attempting to punch their tickets, sometimes succeeding, sometimes not. Are they, like me, poor as shit? Nope. These are the folks who live in the nice sections, the planned, gated communities. The ones for whom it has been a great past 8 years.

I am not planning on doing anything other than using the skills I have learned whilst poor. These other guys? They aren't equipped or prepared.

I guess 52" plasma TV's and hot and cold running $80,000 cars come with a price not reflected on the receipt.

[Atman]

7. Amen

All these guys know how to do is hire people to do what they don't know how to do.

At least I own a good chainsaw. It's a source of firewood and a defensive weapon all in one. And if you're lucky enough to happen upon a stone-deaf deer, it's good for dinner, too!

.

[CoffeeCat]

13. Dave Ramsey...

...said it best recently--when he said that America's best-hidden secret is that
the upper-middle class in America is flat broke. More-so than any other class in
this country.

They are mortgaged to the eyeballs, upside down on their large homes, and they
owe everybody--credit card companies, local stores, auto companies, etc.

You're right...these are the people who open the Yellow Pages when they
have a hangnail. They have no survival skills and they think they're
entitled to everything. They will be the least psychologically prepared
for all of this.

I fear for these people and their ability to cope.

[Warpy]

9. They might also be in hock up to their eyeballs

and just partying until the axe falls and they join you in a cheap apartment while they wait for the dust to clear and the creditors to take everything they have left. If they're under 35, they have plenty of time to build it back up after the mess is over.

At this point in the crash, it should be clear that there is nothing much we can do about it now except watch the movie. Some of us saw it coming and were lucky enough to get out of debt and will try to ride it out as best we can. Others didn't have a clue until it was far too late and will just live it up as long as they can and let the chips fall where they may.

Since none of us has been in a crash before and since this crash is unlike any that have happened before except in the most general terms, we won't know the right things to do until it's all over and we count up what we all have left.

Trust me, your friends are affected by it, usually at 3 AM when they wake from a sound sleep in a cold sweat.

My own feeling is that you'll come through it in much better shape since you've learned to live within your means.

[nadinbrzezinski]

10. They live outside the direct economy

but I can make this observation since I know people in that situation

They only seemed unfazed to you

Serious

That is why people who live outside the main economy stopped spending as much as they used to, and that is affecting the catering business, the party business, the nannies as well as the people working on their loans

Behind that unfazed look, perhaps, is a very scared kid who doesn't want to show that face to you

Just an observation, as you said

[sohndrsmith]

12. what bothers me is not the dollar amount lost - but how (how much) it

affects a person... a family. Maybe that's goofy thinking, but there are so many people for whom losing a few thousand - or even a few hundred - dollars is traumatic, devastating and life-changing. Those are the folks I worry about most.

That said, I take no pleasure in anyone losing from this crisis in any way whatsoever. And if the losses you describe had the same effect as I describe I'd feel the same. It wouldn't matter to me if the loss was half a million or 50 bucks. If it's devastating and life-changing then it concerns me more... Loss, and losing money sucks - but if doesn't necessarily alter one's life/living/lifestyle or family in any significant way, then I think of it in different terms - disappointing and unfortunate, but not necessarily tragic....

...am I wrong to not value loss by the dollar amount but by the significance of it's affect? Maybe. But it works for me and my conscience, somehow...

[Truth2Tell]

14. I'm really not too worried

about anyone who still has a roof over their head, food to eat, rudimentary medical care and access to education for their children. If you've got all that you're way ahead of most of the humans on this earth. Anyone who can afford to go skiing at all gets no sympathy from me whatsoever.

[IrishBuckeye]

15. I bring in $500 every 2 weeks, maybe that's why I don't understand the story. /nm

nm

[paulsby]

16. i work with a guy

(actually he just retired), a cop who lost

600k in the dotcom crash.

keeeeeeeeeeeerist!