I didn't buy a house when I moved to Orange County three years ago. With all the mortgage products out there at the time, I could have bought something crazy- no interest! no down payment! Get your dream home! Instant equity! Can't Lose! No worries!
I don't want to sound like I could see the crisis our economy is in today back then, but I didn't feel comfortable committing myself to huge cash payments for a house that I might not be able to afford if things went south. As the market started to slip, the amount of debt the average consumer has taken on began to appear, and its been staggering to see.
At one point I was considering getting into the market and a friend with expertise in structured finance sent me the following video. If you watch it, what is happening in the markets today makes a lot of sense. Sometimes a visual is all you need to help understand a problem. Now...imagine that everyone on the coaster bought a house, and most of them bought on the way up the track here towards the end.
I don't want to sound like I could see the crisis our economy is in today back then, but I didn't feel comfortable committing myself to huge cash payments for a house that I might not be able to afford if things went south. As the market started to slip, the amount of debt the average consumer has taken on began to appear, and its been staggering to see.
At one point I was considering getting into the market and a friend with expertise in structured finance sent me the following video. If you watch it, what is happening in the markets today makes a lot of sense. Sometimes a visual is all you need to help understand a problem. Now...imagine that everyone on the coaster bought a house, and most of them bought on the way up the track here towards the end.
http://www.youtube.com/watch?v=kUldGc06S3U
As an FYI, I do plan to buy a place in a year or two, I just keep waiting for the coaster to hit the bottom...and it isn't even close yet. Regardless, you can't let money get you down, its just money and it comes and goes. Your life, health and family are what is important. If you keep that in perspective, the worst of money situations are just that, just money situations. Good thing we live in the US, in the old days they tossed you in prison for not paying your bills. Today, they toss the idiot that loaned you the money in prison...gotta love our government!
Be excellent to each other!
As an FYI, I do plan to buy a place in a year or two, I just keep waiting for the coaster to hit the bottom...and it isn't even close yet. Regardless, you can't let money get you down, its just money and it comes and goes. Your life, health and family are what is important. If you keep that in perspective, the worst of money situations are just that, just money situations. Good thing we live in the US, in the old days they tossed you in prison for not paying your bills. Today, they toss the idiot that loaned you the money in prison...gotta love our government!
Be excellent to each other!
3 comments:
I read your blog, Chris. It's a lot of fun. But then again, so is your mother, Trebek.
Good video. On jailing the lenders, it's a case-by-case eval. If the rules are so loose, that lenders can lend money to people they know can't pay, so they can seize the defaulted property, that's just wrong. And the people that sign the papers? Fools.
Now proving motivation of the lenders, that's very hard. If impossible. I haven't heard of a lot of lenders going to jail...
In any case, interesting subject.!
the only lenders that could be in trouble would be related to broker fraud...outside of that its almost impossible to tell (like you said). Either way, it helps put things into perspective.
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