smart money why do you think there is 1.5 trillion in sub-prime loans ? everyone wants to live the american dream. bgp
I agree with you. Everyone wants alot of things, a boat, a big car, etc., but they shouldn't buy it if they can't afford it or they don't understand the potential pitfalls of their purchase contract. And if they lose their ass, they shouldn't expect a bail out. The way to live the *BIG* American Dream is to start small and work your way up. Jumping into a $170K house on a $500 a week salary is just nuts in my opinion, but buying a smaller place, building up equity, and then purchasing one makes sense. I sound like an old guy by saying this (and I'm not), but the new generation wants everything now, and if they don't get it, they are quick to walk away. Job Advancement, Bankruptcy, Divorce, all of that. Everyone seems to be looking for a shortcut and they are quick to blame others if it fails. Sad, really. SM
So true. The culture is rotten to the core. Its become so superficial, there is no work ethic, there is no patience, were really f-ed in the long run. The next generation is going to retire with nothing because they will be spending their entire paychecks on cars,clothes, big screen TVs, and homes they cant afford just so they can keep up their image of having it "made" or having everything now. Its a whole generation of grasshoppers with no ants. I cant complain. Competing against morons like this is really damn easy I live so far below my means its pathetic because I never bought into that garbage. I could buy a ferrari tomorrow but drive a toyota and im perfectly happy with that. I still have a lot of fun without having to prove crap to my neighbors. I also will have an early and easy retirement waiting for me in the end.
I couldn't agree more. While I am not a million net worth, I live my life according to the book The Millionaire Next Door. Other than our home, if I can't pay cash I am not interested. It makes life real simple. Hybrid mortgage, hell no for me. 30% down and 15 year loan. Big time interest saved. In fact, I am considering selling and stepping down to less sf and just pay cash. I have about 700 excess sf I don't need at all. Debt free means stress free. It's nice to be in the minority in this instance.
You can say that again! I have zero debt, a pile of cash in the bank, and zero loans. I have no idea how most of my friends with 10K to 30K of credit card debt can live like that :eek: These are people in their 30's! When the F are they ever going to retire??? Have fun working at walmart when your 60! idiots
But maybe they are right. Maybe the day of reckoning never comes. From what I read the entire US economy has to create more and more credit in order to survive. We monetize old debt with new debt in order to create GDP. However, it is taking ever larger amounts of debt/credit to keep the wheels going. This has prevented us from having a severe recession since the early 90's. M3 in the early 90s started to level off and then Greenspan changed the banking reserve requirement which caused a money supply explosion that is still going to today expect for a small dip a couple of years ago. As long as credit can be expanded and enough income can be produced to service debt everything can continue, but at some point it won't work and there will be a massive dislocation in the global financial system. Everyone just seems so levered. If you have 3 houses and 5 credit cards there is no room for any kind of unexpected circumstances.
Why doom & gloom about housing ? Look at DJ Real Estate ishare (IYR) chart which tracks the real estate market. Nothing on that chart says the real estate sector is falling apart. The trend is still up. Homeowners who are worried about falling housing prices can hedge their risk in the financial market.