Quote:
Originally Posted by Chuck Norris
Most buyers recently (2008/2009 data) statistically purchase with 5% down (this 5% in 45% of the cases is borrow from other lines of credit because the current value is so cheap). The average amortization of mortgage is 35 years (previously 25) and plenty over the last few years took 40 years while they were available). The average person's debt ratio is within 2% of their threshold. Their debt ratio in over 80% of the cases is based on dual income. Only one person needs to be laid off or have a wage decrease and the family is in trouble.
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I was one of these in 2004: 5% down, right up against the 40% TDS.
Big difference: I went into it knowing I had 3 roommates to cover my costs. If anything went wrong, I was only paying 1/4 of the expenses. It also forced me to have a rainy day account, cause 1 of those roommates could leave at any time, and I might be stuck carrying additional expenses. So even if house prices flattened out or dropped a bit, I was fine cause my roommates were covering the majority of the expenses and paying down the equity.
My parents had boarders, so I was used to living with other people in the house, and will probably never live alone. I don't understand the obsession young people have with owning small 1-bdrms and taking on all the costs themselves.
Quote:
Originally Posted by Chuck Norris
Real estate bubbles (especially in Vancouver) have happened again and again and will continue to happen again and again. The reasons are always different but there is always some kind of catalyst to make people feel smart.
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That's the big evil of capitalism that people hate: the ups and downs of the market. They love the ups, yet won't except the downs.
I think they need to make basic economics a required high school course. Supply/demand, its an easy concept, eventually one overruns the other and the graph switches direction up/down trying to find a steady state.
Quote:
Originally Posted by Chuck Norris
While Taylor mentions this, many people either just don't listen or think it can't happen to them. Well, it can. It will. Just wait.
It was only a few years ago that prime was at 6.25%, people forget that pretty quick. Besides, interest rates are irrelevant if someone doesn't even have a job to make the mortgage payments anyway. It's easier and feels nicer to pretend everything is okay. While these people live in fantasy land, I get to make money off their backs.
Does that make me an asshole? No, it makes me forward thinking and lemmings always drown.
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Recessions make the rich richer and the poor poorer.
I've been on the fence about giving advice to others:
A: prevent them from making mistakes, crashing the market, increasing taxes, causing inflation or deflation... OR
B: encourage them, hope for a crash, buy up cheap assets after
This example makes me lean more towards B, cause sheep never learn, so I might as well profit from it rather than waste my breath.
I'll join you in being an opportunist asshole
Quote:
Originally Posted by Chuck Norris
You do and you don't. I think you're the kind of person who'd rather do it themselves. You know how it is with hand outs. It's just like a baller version of the soup kitchen.
The bums are right back the next day waiting for the next bowl. Very few learn to make their own soup  |
I could write a book on this. I'm going to go far OT:
My family used to be worth millions, several businesses, the 90s recession caused them to all go belly-up and bankrupt. I went from driving mom's Jag to school, to taking the bus to university. Best financial lesson of my life. So I know both sides of being a baller and being broke, and it it much nicer being a baller.
I'd gladly take $100K if my parents would lend it to me, yet I'd know what to do with it and it wouldn't include buying a house.
I just moved with my roommate and had to laugh at what a sorry state our generation is in. I handed him a socket wrench to put together an Ikea bookshelf, and he looked at me perplexed of how to use it. He didn't know how to crank it, make it switch directions to tighten/loosen, ... what the hell?
My family was worth millions, yet my father still insisted on doing most things ourselves. I learned welding, plumbing, electrical and electronics repair, drywall, painting, car maintenance and repair, ... from my father and learned accounting while in the office with my mother.
To learn all these things I'd have to go to school for a very long time. What happened to parents teaching their kids this?