Tuesday, May 20, 2008

Here's to You, Mr. Boat-Repo Man

Excellently readable (and dare I say entertaining) article from the New York Times:

NY Times: "Times Are Tough, Except in the Repo Biz"

Just between you and I, you know, being a Repo Man is not something I'd want to do. Whilst there'd definitely be something soul-satisfying about repossessing a yacht named "Bally Hoo," the threat of violence and/or gunfire from Downtrodden Dave and Misunderstood Mary as I absconded with their stuff — the bank's collateral — well, it just doesn't suit my personality.

The guys who do this gig — and I've run into a few of 'em over the years — are a different breed. They tend to be burly, determined, and gruff. And they wear ill-fitting Grateful Dead t-shirts.

Here's a clip from the article. Truly, I dig this. We hear about this uber-consumer, a guy by the name of Robert Dahmen, whose silly spending contributed mightily to the Bush Economy. "He is one of the millions of reasons the consumer-powered American economy did so well for most of this decade," we're told, "and one of the reasons its prospects look so bleak now."

And this, which boxes it all up so nicely:

The merriment came at a price, though. Toy Box [Mr. Dahmen's boat] cost $175,000. With the trade-in and a down payment, Mr. Dahmen ended up with a $125,000 loan. “You pay the interest up front,” he observed, “and the principal never goes down.” After seven years he still owed $111,000, about twice what the boat is worth. Meanwhile, he lost his condominium when his mortgage readjusted and those payments went up. His 401(k) is down to $9,000.

“I oversaturated myself with long-term debt,” he said. “It was a risk, a calculated risk. I obviously lost.” He is declaring bankruptcy.

Yeah. Yeah.

Anyone wanna bet that Dahmen's boat salesman called that boat "investment" no less than five times during the sales deal?

What a world.

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— Posted by Michael @ 8:23 AM


"You pay the interest up front, and the principal never goes down."

Um. Yeah. I wonder what he thinks the $14,000 difference between $125,000 and $111,000 is.

Seriously, are we so into instant gratification that we see slow progress as no progress at all?


I suspect the answer to your question is "Yes."


Bah. Kids these days.

Actually, Mr Dahmen is older than I am. So it's a matter of attitude and awareness rather than age.

With every loan I've had in the Excel era, I've had a spreadsheet for it, running projections of how long it would take to repay it at my current pace, and what would happen if I added more money here and there.

I realize that not everyone is like me (thank goodness), but Mr Dahmen shows a disturbing level of (willful?) ignorance about amortization. And he isn't alone, which is even scarier.


Kinda makes you wanna jump thru the computer screen and box the guy's ears, doesn't it?

"Yeah, that's called an amortization," we could tell him. "That's pretty much how loans work."

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Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]