Transcripts For ALJAZAM Real Money With Ali Velshi 20150101

ALJAZAM Real Money With Ali Velshi January 1, 2015

I feel like its never going to get better. This is a special edition of real money. A year ago, i committed to an indepth exploration of the conditions and challenges facing americas middle class. We called it rebuilding the dream, because we can all readily admit that for traditional america, the traditional notion of the American Dream shattered. We introduce you to people like yourselves, people with real world pressures in their daily lives. For purposes of our year long conversation, we identified americas middle class with incomes ranging from 100 120,000 a year, but more than money, its about aspiration. Being involved in the middle class meaning secure if your job, owning a home, access to good healthcast and education. Time off for vacations and the ability to live comfortably. Youll need something for tonight, even the basics are hard to achieve. Vacations would be a luxury. Unemployment has dropped but wages are still an issue for american workers. The median met worth for americas middle class families took a 17 hit between 2010 and 2013. Most americans agree that the middle class is in crisis, squeezed by the housing, the debt load and lower wages. But that may change in 2017, with more jobs added and wages going up again. But theres a lot of ground to make up. We introduced you to people struggling to make up for that lost ground. People like the sabino family in new york, and the Bowman Family in tennessee. With one home, two kids and several pets, bill and diane sabino seem to have it all. Yeah. I heard that song before. Its going to get better, relax. Right. But what they also have are severe money problems that are seriously marriage. Couples will get divorced quicker over finances than if someone strayed and had an affair. Im very worried. You dont know whats going to happen next. I just things. Struggling this bad. The defined income of over 100,000 a year, cara and Stephanie Williams are in serious debt. They want to move from the chicago suburbs to a more affordable area, but like 9 million other homeowners their house is underwater. We had to pull the whole retirement fund. The entire thing. I cried and cried and cried. Its mine. Jody boleyn is the single mother of a teenage son. Were not restocking the store, im going to close it on the 24th. Shes a struggling Small Business owner. In a bold move to stay afloat, shes moving her store to a new location. Im on a mission that i have to keep this business going. Getting the new store up and running, the details are just overwhelming. The stakes are so high that i think honestly, ive been afraid to realize how high they are. Well, we have also spoken to americas foremost experts when follow the problems that middle class americans face. The access of these is important to us all. Because the most important part of a robust economy is its middle class. Strong consumer demand and desperately needed tax revenue. Without a strong middle class, americas middle class economy falters. Ed wolf, the author of the study, middle class meltdown Robert Shiller, nobel prizewinning economist from yale. And gentlemen, thank you for being with us, and let me start with you, ed. If you dropped down on earth and looked at it the last year you would see improvements in the home prices and the stock market and wages and more jobing created. Why do these things not translate on an oneonone level for americans that were focusing on . You have to go back in time. There has been a huge decline in household wealth, particularly for the middle class. In fact from 2007 to 2010, it plunged by 4 . It put middle class families back to where they were in 1969. Incredible. So i think you know, wealth net worth, savings, thats a former security for the middle class, and i think the angst of the middle class is really closely tied to what has happened to their Balance Sheet. The struggle can be seen in the fact that theyre still dissaving, not saving but dissaving, and their net worth continues to fall. And thats why they have this pessimism about the future despite the recovery in the job market. And despite the last months rise in wages. Its in their Balance Sheet. And thats their form of economic security. Hurting. Robert shiller, youre so associated with the case shiller report every month, and youre on tv talking about home prices, and its so interesting, you often say to me and others that middle class americans need to top looking at houses as a Balance Sheet item as much as they do. And one of the things in eds research is that wealthier americans, for wealthier americans, the home is a smaller part of the Balance Sheet than it is for middle class americans, and they get hit more as well as gain more from housing ups and downs. I think theres a common view among middle class americans that housing is the best investment. And a lot of people think that. It is, in a sense, because its the investment that they most often have, and any investment is important. You have to plan for your future. But it hasnt historically performed as well. But right now, people are fairly optimistic. I just and a survey with case and thompson. The average american in the four cities we studied expects a 5 and a half percent growth in home prices for the next ten years, and thats pretty good. I dont think that it will be that high. Theyre a bit too optimistic about homes, and they should be investments. Theres always a debate robert about whether or not Home Ownership should remain part of what we pedal as the American Dream, should we . Thats the interesting question. The argument for subsidizing Home Ownership is that homeowners appear to be better citizens. They know the mayor, and they can tell you about issues and their community. I think that being a homeowner does that. So it sounds like a good thing. But i dont know how much this is an issue now. Dave camp had a proposal last february to limit the Home Mortgage to half a million dollars. And that might be part of a trend to stop subsidizing homes so much. Maybe we are subsidizing it too much. And maybe people are a little bit too home conscience. Interesting, ed. In other countries like america, with similar gdps we subsidize saving more than we subsidize Home Ownership. And you used the word dissaving, americans are dissaving and what do you mean by that. Well, theyre literally depleting their assets. Maybe not so much their home but certainly strong evidence that their pension accounts have gone down considerably. But their Stock Ownership rates have gone down. And Small Business ownership rates have gone down. So there has been a pretty substantial decline. And what assets the middle class owns. Were going to hear those stories from the families that we have been following. Thank you to both of you Robert Shiller and ed wolf, middle class wealth. When we return, well meet the sabinos who documented their anxiety as they struggled to rebuild their American Dream. He had an anxiety attack, and he was stressed out about money. I tried to fly home, and i got maybe three or four miles, and i got to pull over, im not going to make it. Youre watching a special edition of americas middle class, rebuilding the dream. Hundreds of days in detention. Al jazeera rejects all the charges and demands immediate release. Thousands calling for their freedom. Its a clear violation of their human rights. We have strongly urged the government to release those journalists. Journalism is not a crime. I found out i lost total trust, because he didnt come forward to me and tell me exactly what was going on. I was afraid to tell her. Because she was going to get she gets very nervous, and she was going to be really upset. Welcome back to a special edition of real money. Americas middle class rebuilding the dream. Since we have been following these families a year ago, the American Economy has been showing signs of strength. In november, the u. S. Added 3 it 21,000 jobs, and thats the most in three years. The stock market is up, and the Housing Market continues to gain ground after the bubble bursted. It all adds up to an economy that is expected to grow 3 this year, and middle class families are still struggling. The sabinos you just met. A couple living on long island new york, who make 95,000 a year, and as a school bus [ audio difficulties ] earnings barely cover their expenses, and to make it worse their property taxes have more than doubled to 12,000 a year 1998. All of that i found out that i lost total trust because he didnt come forward to me and tell me exactly what was going on. I feel betrayed. And i feel like he didnt put me in partnership. So theres like a block now. I was getting scared and stressed and i was afraid to tell her. She gets very nervous, and she was going to be really upset. So i put it on my shoulder which is kind of stupid. And it was a stupid mistake of mine. The tree broke our shed, and our pool liner. Unbelievable. Thank god it didnt kill somebody. The tree removal guy wanted 1,000. And im going to try to do it myself. We have the mortgage im worried when, and the other bills, and i work midnight shift. And im tired as it is, and stress on my mind. So i got into my car, and as soon as i got into my car, i felt very dizzy. And everything was spinning and i tried to drive home. And i got maybe, i dont know three or four miles and i said i got to pull over, im not going to make it. And i pulled into Dunkin Donuts and i couldnt get out of the car, and i thought i was having a heart attack. I went into the bathroom and threw water on my face and i called an ambulance and went to the hospital. Youre never going to get yourself out of this hole unless you include her in those decisions. What keeps you from doing that . Its a matter of making a phonecall. Your procrastination, you have to get that fixed. So when are we going to do it . Tomorrow. Why not today . She has a point, why not today . I was walking into the kitchen and i left, because theres always a threat that theyre going to have the Catering Service come in. Im on my way to the dmv. I have to take my general knowledge test. Not easy. I failed it twice. Im going back. Here goes nothing. Nothing. I have room to build. In 90 days, i get a little raise and a bonus, and then in six months, another raise, and then a year another raise, and once im a driver, forget it the money is great. I got up to number 43, and i failed. And so i try again. I got my permit, yeah im so excited. Took me long enough. Look look see . Theres my permit. And im very excited. Were Getting Better at staying afloat. And its coming together little by little. Phil and diane sabino join me now, along with jeff, a psychologist who joined me right at the beginning of our series, and phil and diane congratulations on your anniversary of 25 years. You guys are so brave, and i cant but the get emotional watching your struggles and your story. Youre real fighters, and youre also real fighters sometimes, and i wouldnt, diane, would you guys have less tension if not for the money . In other words absent the constant 25year struggle that has gotten worse for you lately, are things okay . Yeah, everything is fine. Kids, and just normal stuff. Thank god nothing major, but if we didnt have the money issue i would be able to enjoy my life a little better. Yeah, and you guys really tried different things. Work, and congratulations for getting your permit. And you really have planned it out. This house, and the mortgage and the taxes are an albatross for you. In a weird way, you both have transferable skilled. You could be a bus driver somewhere else and you could be a ups driver somewhere else, so why not atlanta or somewhere else other than long island . Believe it or not, a lot of people are doing is that. A lot of friends and family and people we know, when you have family, its hard to pick up and leave, and we have family and its very hard to pick up and leave. Not right now. Maybe one day that would be a beneficial thing to do, but for now, its hard to make that move. Your last year has been a struggle. When we watched it with you, its almost unbelievable to see, i cant believe this just happened to them. Is this unusual, or are they all like this . I think we were tested to see if we could make our 25th wedding anniversary. No kidding. I thought to myself, jeff, i said if theyre going through every year like this, this is impossible. Is this common . Yes, it is common. Because we know, as youve said, the middle class are going through this, and we know that money is a major stressor in any relationship. And when you already have some issues happening, as we see in most marriages, it makes it worse. But the whole idea that we start at the beginning, and finally, this is so symbolic. Youre driving the bus, instead of being run over by it. The moral of the story is, you have to hang in there together and you have to be partners, not just romantically, but as Financial Partners to make it work, and you will see the light of day, and youre not the only ones doing this. And thats why youre role models to many who are watching this, because theyre feeling their pain right now. Speaking of pain, when we were watching this story, and he was talking about his panic attack, and i see you nodding that youve seen it before. Its something thats an anxiety disorder. And when youre not sharing enough, you start to internalize it, and its not uncommon to have these panic attacks that you think youre going to die. But now you can talk about this, and both of you can shoulder that burden, and you will see many less things. I thought you were being chivalrous and trying to protect her, and turns out to be the same. But it wasnt the right thing to do. Youve grown a lot in the last year, the two of you, youve had to confront things, with people like jeff poking into your lives and telling you what to do. And you didnt tell anybody to get lost and didnt shut off the camera, and despite a very trying year financially, do you feel youve gotten better tools to move ahead . Yes. We have learned it how to deal with what was going on. I understand why he didnt let me know. If he ever does it again, it wont be it. It will be a bit of a problem, but i understand. And in an odd way, this tough year made us closer. I saw both of those things happen. Splitting apart and growing closer, and like you said, you are role models, and you are the example of what so many are going through, and this is the bottom. And i think its going to get better for both of you. Thank you, and thank you, jeff for being with us. Coming up next, we meet the williams, cara and stephanie living on more than 100,000 a year, but its not enough. A lot of people are telling me to go into foreclosure, and its hard for me to do that. To be good. And were so not good. Youre watching a special edition of real money, americas middle class rebuilding the dream. My brain is trying to process, the mortgage is due and the gas bill, and were at the cut off point. Were making the best we can, but its very hard. And very frustrating. Welcome back to a special edition of Middle America e. The middle class, rebuilding the dream. When we first met them, their combined family of six is living in a suburb south of chicago. Together they makeover 100,000 a year, but its not enough. Have a look at their story. Go eat, baby, hurry up, go eat. Six people sharing one bathroom makes it especially challenging for the Williams Family to get out for the day. Bathroom. When stephanie bought the threebedroom ranch in 2007, there was ample room for her and her son, but since new wife, cara, and her three kids moved in last year, things have been tight. Like 4 million homeowners, the williams were trapped in a house that was underwater. The house is upside down. The house depreciated over 40,000. Its worth 60,000, and originally, i bought it for 109,000. There are a lot of regrets everything that goes with it. The williams couldnt afford to buy a home close to the city. But their twoour round trip commute, including tolls and gas and parking set them back about 1,000 a month. Have a good day. Stephanie is a math specialist with a masters degree, and cara is an it specialist. Together, they make more than 100,000 a year, enough to put them solidly in the middle class. But thats not how they feel. I consider myself lower class because of the struggles we go to. Bills that include 1,100 in food and 1029 in clothing costs. Home repairs for a leaky roof faulty electrical outlet and broken oven were on the backburner. Our lights have been off and our gas has been off. My Insurance Company called me the other day and said i needed to paint the siding on my house, and if i didnt do it by june, they were going to drop us from the assurance. Right now, we have a quote for 4,500 to fix our attic, which raccoons have gotten into and turn out the insulation. The minute we get out of one bind, we hit another. The union of Cara Kim Bell and Stephanie Nicole williams in a legal marriage. We had some shortcomings up to the wedding. We had an issue with our plumbing, where we had to purchase another main, 2,500. I didnt think about it because i had this going on. I dont think we broke the bank with our wedding. The total budget on our wedding was 5,000. And we were not able to provide drinks for the wedding, as far as alcoholic beverages because it was too many for us to handle. With the plastic plates and the silverware, we only paid 200 for it. I cant wait to spend my life with stephanie. This just solidifies it. Were married i was ready to flip a burger. Thats how worried i was. And i just knew that i had to go out and find another job. The day that the job ended was the day that i interviewed for the job that i have now. At the tribune, so the particular role that im in, which has helped us, contract for hire. My mom, the day after the wedding, was diagnosed with colon cancer, and im trying to decide if im going to go, the fact if my mom didnt make it out of her surgery. I already see the difference in my paycheck. What i bring home. Still the situation, taking care of the house. I just fell in love with the home. I dont know if its a dream home. It cutting out a lot of bills. I can go right to my job. Turn on the g

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