Because the banks and car companies will lend to anyone with a pulse, does not make you rich. I have found the rich people are the ones driving the second hand cars. They have no one to impress.
In the irational exhubarance book it stated, housing prices have gone up only 60% above inflation in 120 years and that does not include renovations and other stuff put into houses. It is a horrible investment. Here in Toronto house prices just hit their 1989 peak adjusted for inflation. Great book
The long run is here, and the conundrum is dead. Lots of individual flipper pain behind these numbers, if not now....soon. Inventory is building in this MLS....in the last 14 days up 14%! The May bar is not finished updating! The new bubble in real estate is in inventory charts, volume is way down, prices to follow. OWP
I just flipped a house and made 60K in Calgary. It cost me 3 months of interest payments and some elbow work. Now, Calgary is a pretty hot market but it would actually be better if it was cooler because it would involve less risk. IMO houses are great investments because: 1. Leverage allows even first time buyers to achieve decent returns and build wealth. 2. Tax free capital gains on personal property allows compounding faster. 3. Control. I can rent out, flip, move in etc, depending on what's best given the RE cycle. Allows me to manage risk and survive down cycles. 4. You have to live somewhere anyways so rent has to be taken into account. When you do that, especially on comparable property, the few hundred $$ extra each month (if that) you may pay owning are well worth it in terms of opportunities and quality of life. 5. Freedom. I hate renting the same way I would hate getting crowded in a public bus everyday. 6. Inflation hedge. Of course, like everything else, you still need to be smart about it and manage your risk. ie, have a plan for the worst case scenario.
you do realize that 99% of people out there finance out the wazoo so they can have their vipers and whatnot. net wealth increases are actually way down (although still positive) from a few years ago Calgary's market is retarded (Hiiii fellow Calgarian ) My parents bought this house in 197X for $40K. Last week we had a realtor come by and ask if we were willing to sell (we're not even int he market....just a random realtor came to our door) saying he had somebody who would buy it for $800K. LMAO. Eventually the market has to cool.
Personally if all the avg family has is 93k net worth, I think that is pathetic. I would be concerned if that was my net worth, not that mine is anything to brag about, nor am I attempting to. Does this include 401k and retirement savings? I sure hope not. What do I expect? We live in consumer driven society, in the US atleast. Our GDP tracks it. I guess not enough folks have read the Millonaire Next Door.
assets-liabilities; of course it includes 401k and stuff like that But really, what do you expect? It's 2006 and the general attitude of North Americans is - I want I want I want I want, I WANT NOW! CHARGE IT!
In SoCal over 85% of the loans are ARMs + interest only. Next year, 10X as many ARMs are scheduled to reset as this year. Thats going to be real interesting. Weve probably seen the top here already.