Hello, my name is “Fred Gov” and some of the people I work with are saying my financial situation is in trouble. Others say I am fine. Anyway here is my situation.
I own a home valued at $162,000 and I currently owe $165,000 on it. The growth has been slow so property values have not gone up much the past several years. I have been making the minimal interest payments on the home loan and borrowing more so the principle keeps increasing each year.
My salary is $28,000 per year after taxes. This amount is just enough to pay my “must pay” bills so I call it my mandatory spending. It pays for my medical, food, utilities and home interest payment.
I have a very generous banker who has been loaning me money for several years. Over the last four years, I borrowed about $12,000 each year against my home, which brought me to owing the $165,000 today. I call this borrowed money my discretionary spending, but my wife must approve the purchases. I have been spending this money on the greenhouse, storm damage, transportation, vacations, parties and some environmental concerns in my yard.
Since we live in a high crime area, I maintain a home security system and a few guns with ammo for protection. My wife likes the double-barrel shotgun as her choice of weapon. I feel sorry for some of my radical neighbors who cannot afford weapons, so over the years I give them some of my weapons, money and other supplies. A couple of my neighbors own gas stations but I still can’t get a discount.
My total spending each year is $40,000 and I am not sure how much longer my banker will keep loaning me money at a low interest rate. I asked for a pay increase, but the boss said he can’t afford it since he wants to add more workers next year to grow his business. I asked my wife to start working but she is not in the mood and just wants my check each month. My daughter had two children out of wedlock and expects me to keep her and the kids up. My father and mother are getting old and expect me to start giving them more money each month to help pay their bills.
The hospital says it is losing money and plans to go up on my health provider so my premiums will be going up. According to my accountant, I will be in debt at least $200,000 in four more years and the property value is uncertain, but what does he know? He doesn’t have a crystal ball.
Being a positive thinker, I believe those people that are telling me that my financial situation is just fine.