“I earn 5.000 euro / month. I will buy an apartmentand pay installment of 4.300 euro / month”“You should be arrested…”

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        I come from Katerini, a medium sized Greek city, so I think I understand all these Romanian people who come to Bucharest from a smaller home town. I tend to know their psychology and maybe even their approach to life. Maybe this is the reason why I have several friends belonging to this category. Now I have one less. And I am not ashamed to share the reason with you, so as at least maybe to protect someone else…

Double or triple size of apartment…
        He works in a big company, with a salary of 5.000 euro / month. He started from very low and his wife is also coming from a poor family. Today, while millions of people all around the world are losing their jobs, he is sleeping peacefully, knowing that his work and salary are well protected, because of the results he has. Is everything ok? Well no…


        They decided to try to have their first child. And along with this nice intention, the problems appeared too. “I cant live anymore at 70 sq.m., I need at least 150 – 200, especially when we will have a baby. You are working so hard. Why do you do this, if you can not enjoy a larger, more beautiful apartment in an area which suits our profile and our position in society?“. This is what she told me, Ilia. And she is right up to a point”.

A tough negotiation, template for seminars…
        “So what will you do?” “She has found an apartment in a very nice area, a really cute one. The owner will sell it to us only for 550.000 euro” “Wow, so you really managed to steal him during negotiation” “Well not me, my wife. She found it, saw it and negotiated the price. From 580.000, she obtained 550.000 euro”. “Great, she should be a trainer, teaching all of us how the correct negotiations should be done. So, what are you planning to do?” “I am collecting loans, so as to obtain it” “Are you serious?” “Ofcourse. And I will use all my connections, so as to pay not more than 4.300 euro / month, so as to be able to live with the rest 700“. “Are you nuts? You should be… arrested for the way you are thinking…” After I talked to him using very bad words, he changed his mind and went back home to convince his wife…

None of the solutions worked…
         “What to do? It is not my decision. We had a huge fight and she told me in the end that I don’t love her and I don’t take into consideration our baby“. “Did you adopt one?” “No, cut the crap, the one we want to have. I am desperate, I don’t know what to do”. “Do you want drastical solutions, or just to hear nice words?” “Let us start with the drastical ones…”
          “Sit down with her and explain that it is dangerous for your family to spend more than 30 – 35% of your income for a housing loan, especially when she doesn’t work. It is better to use the rest of the money in other directions, so as to travel together around the world”. “I will have to do this anyway, anything else?”
         “Tell her that you may be fired, or you may have to accept a lower salary in your work”. “She says she doesn’t care and she can not wait anymore. Anything else?”
“In this case, find a smaller “palace”, with a budget of 200.000  – 250.000 euro maximum. You will have plenty of choices today and your installment will be reasonable”. “Anything else?”

“We will have the best home of all”
           He started telling me that… “You know… the more I think about it… the more I find the idea not so bad. It will provide added value to my life and also to my prestige in society“. “But you will risk your future, your career, your life, everything. And you will be blocked in an expensive apartment, having to pay almost all your money every month, during the worst crisis in the last decades“.
           In the end I understood that he probably agreed with his wife and he pretended the victim, although he was not. I tried to save him, as I would do this for any friend of mine. I even asked to meet him together with his wife. “So what? If it happens for my husband to lose his job in the future, we will see then. Now we will have the best home of all“, she replied to me after all my arguments. Apparently almost all their circle of friendly couples have bought expensive properties in the past and they did not = big shame…

Several thousands of people blocked in expensive installments they can not afford
          These days they negotiate the final details with the owner of the property. They are upset on me, as I was the only one who didn’t tell them congratulations for the excellent choice.
          This friend is not the only one… It looks that there are still a lot of people who did not learn their lesson here in Romania. They refuse to respect today’s bad financial situation, they are focused only on how they will live good NOW, without to care about tomorrow.
           It is funny, but it seems that I am more worried for my ex friend than himself for the future of his family. He didn’t care to notice that there already several thousands of people around us, blocked in the following situation: “having an expensive installment for apartment for the next 10 – 30 years, matching it with an expensive installment for car, while they barely manage to survive”. They became vulnerable for similar reasons with this couple.

This consumption model doesn’t work anymore
           When I read analyses about the market, most of the times I don’t read that the problem is not solved if we spread money to people today, but if we initiate the healthy consumption to be activated again. The consumption model “I sell my future so as to live good today” doesn’t work anymore and it will bring many more problems to Romania in the near future.
          “You’ll see”, as also Madonna sings… (http://www.youtube.com/watch?v=Oa_9CEhM0EQ)

 

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18 Comments

  1. Adrian Aug 7, 2009
    Reply

    I read your blog regularly and I find it quite good (I live in Cluj). Congratulations and keep up the good work :).

    I cannot believe that there are people who think like that today. I’m astonished; I thought the last years events opened up the eyes for a lot of people – especially for those highly trained/paid.

    Another thing I find interesting is that there are still banks willing to loan that kind of money for an over-evaluated apartment.

    Well…you know what they say: there’s one born every 30 minutes.

  2. Nicole Aug 7, 2009
    Reply

    Mr Ilias,

    I think that in the end these kind of people will suffer.
    Although sometimes most of these people have the right connections, know the right people who can help them with a better job or another way to save them. Because you see, as a romanian proverb says “Ban la ban trage si..paduche la paduche”.
    I also know a familly in almost same situation but they are surviving quite Ok although is hard.
    To lay down more than the blanket allows you!
    Probablly this is happening when you have lots of money, you want more and more for your apparently benefit.
    I wish them good luck!

    All the best to you,
    Nico

  3. BladHaund Aug 7, 2009
    Reply

    I can hardly understand how come he is earning such a big salary and yet he shows such poor financial planing abilities. I am inclined to wonder, does he risk the assets and finances of his employers the same way he does his own? Or perhaps he is just a odd inventor and the financial work is left to more reality-oriented people… Not to mention that the financial “plan” he has come up with should have enabled him to save for just 1 (one!) year and buy the very expensive property he desires with no loan required. But perhaps last year he was earning just 500 euro :-).

  4. geretus Aug 7, 2009
    Reply

    This guy earns 5000 eur/mth and he thinks to spend 4300 for the mortgage rate… Sounds crazy…
    What do you think than about the guys who are earning ~ 1000 eur/mth and they have to pay rates of about 900 eur/mth (car, apartment etc – what the hell… they could do it 2 years ago)…
    But oops, their 1000 eur/mth (cashed in RON of course) today means ~ 800 eur/mth..
    How about that…

    Now back to your guy… 550.000 EUR for an apartment in these days sounds a little bit crazy

  5. Mircea Popescu Aug 7, 2009
    Reply

    This is seriously the heaviest engrish blog I’ve seen recently.

  6. Marian Aug 7, 2009
    Reply

    I wish him bad luck. I wish him to get a salary reduction or to lose his job. That should be a wake-up call for him.

  7. Lupinsangerat Aug 8, 2009
    Reply

    @bladhaund You mean save for just 10 years!

    Anyway, I think all people that have some money should look at the public wealth statement of Alexandra Gatex ex-CEO Unilever, now advisor to the President. With a monthly salary of EUR 18,000 she lives in a, say, 400,000 euro apartment has savings of about 400,000 euro and bank debts of 200,000 euros. Now that’s some healthy planning and Ilia, ask your ex-friends if they think they should live in a place more expensive than the one the 10 ex-CEO of Unilever lives in.

  8. Iulian Aug 8, 2009
    Reply

    Their pride is their worst enemy. They have a home, a job, each other, yet they can’t be happy. Pride won’t let them. Meanwhile life is passing by. This is the story of man since long before the bible was written. Read about Adam and Eve’s exit from heaven… exact same story! You don’t need to be wise enough to understand that simple tale in order to make 5000 Euro a month. Peace.

  9. Emil Aug 8, 2009
    Reply

    Your friend should get a divorce soon … his “wife” sees in him only the provider and probably the sperm donor. If she cared about him she would not have blackmailed him into certain bankruptcy: when you hear “you don’t love me if you don’t …”, run.

  10. Ubu Aug 8, 2009
    Reply

    Actually what he does makes sense, considering the rate at which the wages but also the price of properties grow during boom times in Romania. He’s making an investment that will most likely double in value in the next 10 years, while his wage, after the crisis will pass, will start to grow again at a rate of around 15% per year (there were years when wages grew by 25%, so that percentage is actually not that big). At the same time, you can live quite comfortably with 700 euros in Romania plus eventual performance bonuses, with summer and winter time vacations in Romania (not Sinaia or Mamaia, but in Borsa or Sulina) and with home cooking and eating good quality food from the peasant markets.

  11. ironics Aug 8, 2009
    Reply

    I believe they lost contact with reality; when you earn this kind of money you probably get blinded. The danger here is the wife’s attitude, I’m afraid.

  12. Cristi Aug 9, 2009
    Reply

    I can hardly believe what kind of friends you have 🙂

    In fact, the story itself is unbelievable but, probably your jurnalistic background forced you to pump a little bit the story to prevent this kind of situations.
    Anyway, I think that times really changed… there are bearly no transactions at 550.000 euros in Bucharest.

    Regards,
    C

  13. Stefan Aug 9, 2009
    Reply

    Ground ZERO solution: kick out the stupid bitch! Probably he could find a younger, smarter, better looking one, with 1/4 of the money :). But probably he is not so smart, so he will mess up his entire life, for a cunt. And when the money runs out, she will live him in no time. 550k for an apartment in Bucharest – there are a lot of funny people living in this world :). Good luck!

  14. Cristina Aug 15, 2009
    Reply

    You’ve made me smile .Thank you ! I have friends like that. It’s the Romanian way , there’s nothing to correct .You know the saying : “Live fast, die young!”

    Congrats on your blog!

    Cristina

  15. Peter Fogarty Aug 22, 2009
    Reply

    Ironically lots of Romanians live life like this…

    I live in a great area of Bucharest – but drive a crap car…

    Lots of people live in crap areas and drive top of the range cars…

    If I had the money, I would have spent it on getting into a decent area, rather than a decent car…

    He is very Romanian in his outlook, that is all.

  16. Toto Sep 25, 2009
    Reply

    Hihi this reminds me of something that was said in My big fat Greek Wedding: Greek women, if they are not nagging somebody, THEY DIE!

  17. Someone Sep 30, 2009
    Reply

    I sincerely doubt about your friend’s intelligence. For someone who earns so much money in this country, he isn’t too clever. Along with his wife.
    Though your intentions are good.

  18. Til Jul 7, 2010
    Reply

    Hello.
    I have read this post last year and I was very impressed by it. I have sent the link to the people I know, as an example of how stupid can smart people be sometimes. Back then my best friends wanted to do something similar. Their family increased after their second child was born, so they needed a bigger place to live. But bigger to them meant moving from a small two rooms flat into a big four bedrooms house. And they were willing to sacrifice more then 60% of their incoming for a twenty five years housing loan. And the biggest nonsense I’ve heard from them was: “we need to do this now, when the children are small and the expenses with them are not so big”. And I replied: “what do you mean, do you think that the 25 loan will end in 2-3 years or what?” And when I ran out of arguments, I sent them the link to this post, and it made them rethink everything. Actually – your post and the fact that they did not get the money from any bank. 🙂 🙂
    It’s been almost a year since this post and I wonder what happend with your ex-friend. Did he get his deamhouse? Can he live to the high standards that he thinks he deserves with the remaining 700 EURO per month?

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