Have you noticed that the same people late on mortgage payments spend on top cell-phones, flat TVs, expensive car wheels, nice clothing, etc? Seeing this makes you wonder if the subprime mortgage problem isn't more caused by -everytime- poorer personal wealth management, and less caused by the economy itself.
That definitely part of it. Ask yourself, how can you expect the citizens of the country to act in a financially responsible way when their government can not? If the Chinese decide to start financing our spending orgy, for the last 30 years of so, we are done, plain and simple. These idiots you speak, are the same ppl. that would read a book, one of my personal favorites, The Millionaire Next Door and scoff at it. Let's not forget their 40k Expeditions they must have to haul their kids and their sports equipment to practice. I have heard many the same argument from the yuppie moms I used to live next to in OC, CA. How many actually own vs. lease. One of my friends, whom I try to talk sense into, sold his paid off car because he had a small problem, would have cost, max $500 to fix, traded it in, got screwed on that trade in, and bought a 23k Minivan so he could haul his camera equipment around for his side biz he no longer likes after a year and wants to get rid of. Now he's back in debt, refinanced he house to pay off consumer debts and his minivan and has little equity left. Just stupid. This is one of the reason I like foreign women, especially European. They know the value of money, they have had to work damn hard to get it and they don't waste it like the avg. American. Americans, in general, have a disposable mentality, even me, compared to someone from Eastern Europe or parts of Asia. Mark my words, and this is nothing new, as many on ET are smart enough to figure this out, if the USD continues to decline and we as a country to rack up debt, Americans over time will suffer a noticeable decline in standard of living which will leave many, like my friend, whining that they have to mow their own lawn and clean their own house. My comments, as noted, are generalities not absolutes. Some of us have financial sense, the rest in the US will learn at their most desperate time. P.S. I had to laugh when most of the ppl. in line for an IPOD on Friday looked in the early teens/20's and most can't even afford an down payment on a house. Take that $600 junk and keep it.
These people are smart to figure out the way; that all the labor and blood sucking jobs are moved overseas; all they have to do is rake up debts; so eventually the government will minimize debts by printing more money; aka inflation; This game will continue until Asian stop lending back the money; and everyone know Asian countries aren't trustfully to each others; it will be too easy kick up wars around them; once that happens; where do you think the money goes?
Too funny. You real thing the avg. Joe/Jane thinks that way. You make a decent argument, although I don't agree with it, but we are more educated than the avg. beer drinker watching the boob tube at the end of his blue collar day. No offense meant against union labor, I think unions are, in general, a good thing.
Hi, my name is Joe. I have a huge 6 bedroom house, a new SUV, and 3 wonderful kids. I'm even a member of the local golf club. How do I do it? I'M IN DEBT UP TO MY EYEBALLS. Someone please help me.
Live richly and be poor. Or live moderately and build wealth. I know so many poseurs driving BMWs, Land Rovers and Mercedes, living in newer 5200 square foot homes with media centers and infinity edges. Most of these people (not all) have a massive negative net worth. Here today, gone tomorrow. Most of the people with serious $$$ that I know drive 6 year old cars, have lived in the same house for the last 10-30 years, and own solid assets. They not only don't live outside of their means, they live WAY underneath their means. The truly wealthy don't derive satisfaction from spending money. They derive satisfaction by building financial security, which entails rational business and financial investment, and saving, saving, saving. Then, at some point, they buy the assets of the aforementioned people after those poseurs go broke, at the inevitable fire sales.
Or they die before they ever get to enjoy it. For me, its the area under the curve. Trying to maximize the area of my happiness vs. time curve. Thankfully, the curve is concave up... SM
Agreed it's a balance between squander and blow it all. If I can't pay cash, I think about that purchase much more.
These people have a completely differently mentality. I know someone who bought a house four years ago. Along with 100% mortgage they also got a 50K additional line of credit at the same rate as the mortgage. He boasted that he now had a house and 50K of cash too. As if the 50K was his own cash that he had saved up. Having said that, i know people at the other end, they were saving to buy a house but house prices took off and never looked back. They have lots of cash but no house. Living at home with parents waiting for a housing correction that never comes. Debt is good as long as the rate you get is below inflation and you can afford the repayments.