American Dream Rant.....

[MossRoad]

.....Your method of progression seems sound, but would NOT work in my particular area. .....

Move to an area where it works and be debt free.

Life is full of choices that we all have to make... education, carreer, spouse, home, savings, children, retirement, etc...

If anyone lives in an area that is too expensive, and they realize it is too expensive they have choices... stay or leave are two of them.

 

[Podunkadunk]

If you have to ask "how much?", you can't afford it.

 

[BillyP]

If you have to ask "how much?", you can't afford it.

If you don't ask "how much", you're pretty stupid

 

[MossRoad]

If you don't ask "how much", you're pretty stupid

Hahahahahha!!!! THAT should be the quote of the decade! Nice one.

 

[40Kchicks]

A loan is just an advance on future income.

I have a good friend that two years ago was a small scale farmer who decided that he wanted to be big. He took the risks and borrowed a couple million dollars to expand his business. He now makes about 20K NET a month and has employees to do the dirty work for him so he bought two more businesses just like his and when he gets done expanding those businesses his NET monthly will be about 60K a month. He is using about 8 million in loans which he is on schedule to pay off in 10 years.

The ability to borrowing money can be a great tool. Living dept free is great for some but not everyone.

Eric

 

[ultrarunner]

Well said 40Kchicks!

 

[Bob_Skurka]

A loan is just an advance on future income.

I have a good friend that two years ago was a small scale farmer who decided that he wanted to be big. He took the risks and borrowed a couple million dollars to expand his business. He now makes about 20K NET a month and has employees to do the dirty work for him so he bought two more businesses just like his and when he gets done expanding those businesses his NET monthly will be about 60K a month. He is using about 8 million in loans which he is on schedule to pay off in 10 years.

The ability to borrowing money can be a great tool. Living dept free is great for some but not everyone.

Eric

Eric that is a great story, no doubt very true and it is a real American success story. But taking out loans with a sound business idea and the ability to put that idea into action is much different that the idiots who buy their houses with idiotic loans, no savings all the while depending on others for their income and depending on the mortage market not to go up and the housing market not to go down. Your story is far different than what we have been talking about with regards to the sub-prime home loans, but thank you for showing that Americans who work hard can be successful.

 

[ultrarunner]

It seems that we have almost come full circle... 20 years ago congress was investigating lenders for NOT lending and today it looks like lenders will be investigated for lending. (As an aside, anyone remember 17% mortgages in the 70's?)

In the 1980's, most of Oakland was effectively "Red-lined" by Lenders. It was just about impossible to find a bank or savings and loan willing to do business in the "Flatlands" As a consequence, the percentage of Homeowners dropped and the number of Rentals increased. The Government became involved and made "Redlining" illegal.

Fast forward 20 years later... Oakland Home Ownership is at an all time high, young families are buying former rental homes and transforming neighborhoods. This transformation would not have been possible without making sub prime loans more available.

I'm one that believes home ownership is the cornerstone of the American Dream. The Bay Area news is filled with stories of "Investor" homes being foreclosed. Last night the story profiled a Bay Area man that bought 5 homes in 2 years... his business plan consisted of "Flipping" and now he is loosing them, one by one.

Relaxed lending rules have given thousands of families a chance to obtain the American Dream... Home Ownership

For the most part, I believe the government effort to avert a post 911 economic depression is responsible for the unprecedented manner liquidity and credit were made available at record low interest rates.

Only time will tell how many Home Owners actually lost owner-occupied homes through foreclosure.

 

[MossRoad]

A loan is just an advance on future income.

That is where people, businesses and governments get into trouble. There is no guarantee that you will make that future income. It is speculation. Sure, some of it may be 95% a sure thing, but it is still speculation none the less. Our local government bases its next year budget on PROJECTED income from taxes. Guess what? Property tax restructuring killed their projections. Now they have to cut all non-essential services to make ends meet, and they may not make that as it is looking now.

I feel much better having actual cash making money for me than taking out loans and possibly being on the hook for large notes when catastrophy strikes.

The ability to borrowing money can be a great tool.

I agree. And I'll bet if your friend adds up everything he owns and sells it, then pays back all his loans, he will be in the black, won't he.

 

[BillyP]

A loan is just an advance on future income.

I have a good friend that two years ago was a small scale farmer who decided that he wanted to be big. He took the risks and borrowed a couple million dollars to expand his business. He now makes about 20K NET a month and has employees to do the dirty work for him so he bought two more businesses just like his and when he gets done expanding those businesses his NET monthly will be about 60K a month. He is using about 8 million in loans which he is on schedule to pay off in 10 years.

The ability to borrowing money can be a great tool. Living dept free is great for some but not everyone.

Eric

Eric, I live what you're saying every day and I know you do too. It a shame that most people don't understand the situation and how they are fed.