Are you Broke or Poor?
Currently, the odds are that you may be broke! You may not think so but unless you have a fair amount of liquid assets available, you are, as they say, "but a paycheck away from a shopping cart."
The crash in the Real Estate market and the Sub-Prime lending fiasco has really brought that fact into focus now. In another life, I am a professional home inspector. As such, I have seen young, first time buyers stretch their resources extremely thin to purchase a home they really could not afford. I was amazed to see young couples step up and sign on for $4-5000 a month payments! Yes, currently, they had the income to support them. But, if anything happens, like an extended illness, the need to replace a car after an accident, the loss of one income stream or anything else that compromised their ability to fund the house payments, they were upside down in a heart beat.
This is not a good or wise position to put yourself in to, to say the least. This is a situation that some investors got themselves into as well. In the Real Estate parlance, they are called "flippers". They buy a house, throw some money into it (lipstick on a pig) and plan on flipping it back on the market in a few month and reaping the rewards of the ever rising prices and the "feeding frenzy" that were occurring at at the time. This worked very well for some. I saw it happen many times. $100,000 or more profits were not uncommon in three months. Pretty good ROI!
Unfortunately, starting in 2008, the wheels started coming off the train. Those that were a bit late to the party got caught holding very expensive assets that were no longer worth what they had invested. They were "upside down" and were stretched so thin that the only option was to sell at a loss (if they even could) or default on the loans. From that point forward until today, the downward spiral has continued. One thing led to another and what had been a Real Estate disaster soon morphed into a general economy disaster of epic proportions. And it was not contained within the borders of the good old US of A. Today's economy is a "World Economy" and our problems soon brought the World's economy to its knees. The wags are still debating whether the "bottom" has occurred or is yet to come.
The crash in the Real Estate market and the Sub-Prime lending fiasco has really brought that fact into focus now. In another life, I am a professional home inspector. As such, I have seen young, first time buyers stretch their resources extremely thin to purchase a home they really could not afford. I was amazed to see young couples step up and sign on for $4-5000 a month payments! Yes, currently, they had the income to support them. But, if anything happens, like an extended illness, the need to replace a car after an accident, the loss of one income stream or anything else that compromised their ability to fund the house payments, they were upside down in a heart beat.
The Proverbial "House of Cards"
This is not a good or wise position to put yourself in to, to say the least. This is a situation that some investors got themselves into as well. In the Real Estate parlance, they are called "flippers". They buy a house, throw some money into it (lipstick on a pig) and plan on flipping it back on the market in a few month and reaping the rewards of the ever rising prices and the "feeding frenzy" that were occurring at at the time. This worked very well for some. I saw it happen many times. $100,000 or more profits were not uncommon in three months. Pretty good ROI!
Unfortunately, starting in 2008, the wheels started coming off the train. Those that were a bit late to the party got caught holding very expensive assets that were no longer worth what they had invested. They were "upside down" and were stretched so thin that the only option was to sell at a loss (if they even could) or default on the loans. From that point forward until today, the downward spiral has continued. One thing led to another and what had been a Real Estate disaster soon morphed into a general economy disaster of epic proportions. And it was not contained within the borders of the good old US of A. Today's economy is a "World Economy" and our problems soon brought the World's economy to its knees. The wags are still debating whether the "bottom" has occurred or is yet to come.
Is there Hope?
Of course there is! Not everyone's finances tanked. Only those that were not observant and prepared took it in the shorts. Unfortunately, that is a group that has a very large membership!
There is an old saying in real estate; "Real Estate made me a millionaire! Unfortunately, I used to be a Billionaire!"
It's time to take responsibility for our actions and our finances. "Fine" you say. Just how do I do that? Well, I am going to attempt to shed some light on that subject. Something CAN be done about it!
Check back or add this feed to your news feed reader by clicking on the button below this post "Subscribe to this" and follow along in the coming weeks and months as I share my explorations into "financial education" for the masses. There are lots of resources that I am finding that are making a huge difference in people's financial lives. I will share them with you.
There is an old saying in real estate; "Real Estate made me a millionaire! Unfortunately, I used to be a Billionaire!"
It's time to take responsibility for our actions and our finances. "Fine" you say. Just how do I do that? Well, I am going to attempt to shed some light on that subject. Something CAN be done about it!
Check back or add this feed to your news feed reader by clicking on the button below this post "Subscribe to this" and follow along in the coming weeks and months as I share my explorations into "financial education" for the masses. There are lots of resources that I am finding that are making a huge difference in people's financial lives. I will share them with you.
