Money, money, money

[Fenton Lum]

Wall Street and Goldman Sachs will do well as they always do and the societal wealth extraction continues unabated.

That happens because too many people "stretch" and bother to live in places like this....

....instead of saving more of their money and instead living here

...and "stretching" to also buy a (or another) modest income producing property so they will eventually have the means to live in a real mansion instead of a "McMansion," or not and come to their senses and ignore the cultural stimuli associated with outward symbols of status and success.

Doing that all but guarantees one won't ever be able to live here.

Quite simply a simple rule of thumb that's very easy to follow is this: until one has actually "made it, live in a property valued at 1/4 to 1/2 of the total value of one's income producing assets. What's "made it?" Well that varies by location, but in all locations it's greater than $5M in net worth. Why? Because in America, the way to make it is to be a capitalist in some regard. One of the easiest ways to do that is to be a landlord.

I'm not intimating that folks not buy a big house. I'm saying that far too many people do so "one their way up" instead of upon or after "arriving." Doing that is one of the surest ways to slow one's "arrival," especially if the only means one has for getting there is one's salary, unless one happens early-ish in one's life to command a very high salary.

Now I can't say that's going on everywhere, but I can say that in my part of the country, about all that people seem to demand, as evidenced by the types of new homes that are primarily built, is a big house, even though they don't lead a lifestyle that calls for actually needing a big house.

At the urging of Goldman Sachs and your private banker controlled monetary system. That's how they generate wealth. This entire economic system runs on the generation of debt. If they don’t create more and more debt the entire system crashes under its own weight. And it will someday, just a matter of time.

 

[usmbguest5318]

Wall Street and Goldman Sachs will do well as they always do and the societal wealth extraction continues unabated.

That happens because too many people "stretch" and bother to live in places like this....

....instead of saving more of their money and instead living here

...and "stretching" to also buy a (or another) modest income producing property so they will eventually have the means to live in a real mansion instead of a "McMansion," or not and come to their senses and ignore the cultural stimuli associated with outward symbols of status and success.

Doing that all but guarantees one won't ever be able to live here.

Quite simply a simple rule of thumb that's very easy to follow is this: until one has actually "made it, live in a property valued at 1/4 to 1/2 of the total value of one's income producing assets. What's "made it?" Well that varies by location, but in all locations it's greater than $5M in net worth. Why? Because in America, the way to make it is to be a capitalist in some regard. One of the easiest ways to do that is to be a landlord.

I'm not intimating that folks not buy a big house. I'm saying that far too many people do so "one their way up" instead of upon or after "arriving." Doing that is one of the surest ways to slow one's "arrival," especially if the only means one has for getting there is one's salary, unless one happens early-ish in one's life to command a very high salary.

Now I can't say that's going on everywhere, but I can say that in my part of the country, about all that people seem to demand, as evidenced by the types of new homes that are primarily built, is a big house, even though they don't lead a lifestyle that calls for actually needing a big house.

At the urging of Goldman Sachs and your private banker controlled monetary system. That's how they generate wealth. This entire economic system runs on the generation of debt. If they don’t create more and more debt the entire system crashes under its own weight. And it will someday, just a matter of time.

At the urging of Goldman Sachs and your private banker controlled monetary system.

I presume by that you mean that people make too many discretionary purchases, as contrasted with investment purchases and saving, because bankers encouraged them to do so. Is that correct?

 

[tigerred59]

Wall Street and Goldman Sachs will do well as they always do and the societal wealth extraction continues unabated.

That happens because too many people "stretch" and bother to live in places like this....

....instead of saving more of their money and instead living here

...and "stretching" to also buy a (or another) modest income producing property so they will eventually have the means to live in a real mansion instead of a "McMansion," or not and come to their senses and ignore the cultural stimuli associated with outward symbols of status and success.

Doing that all but guarantees one won't ever be able to live here.

Quite simply a simple rule of thumb that's very easy to follow is this: until one has actually "made it, live in a property valued at 1/4 to 1/2 of the total value of one's income producing assets. What's "made it?" Well that varies by location, but in all locations it's greater than $5M in net worth. Why? Because in America, the way to make it is to be a capitalist in some regard. One of the easiest ways to do that is to be a landlord.

I'm not intimating that folks not buy a big house. I'm saying that far too many people do so "one their way up" instead of upon or after "arriving." Doing that is one of the surest ways to slow one's "arrival," especially if the only means one has for getting there is one's salary, unless one happens early-ish in one's life to command a very high salary.

Now I can't say that's going on everywhere, but I can say that in my part of the country, about all that people seem to demand, as evidenced by the types of new homes that are primarily built, is a big house, even though they don't lead a lifestyle that calls for actually needing a big house.

Can I add to your brilliant analogy.....there is also a sense of entitlement that comes with those desires to live outside one's means. Take for instance rural america....you have all these subdivisions being built, all based on some one hit wonder manufactoring base that paid good wages that sustained a community and created middle income existance for generations of families. Then one day, due to globalization and NAFTA, it ups and leave...meanwhile you got these families, refusing to either move or downsize, but instead want to whine their misery and adversities onto minorities and the former president. They turn into victims of white suppression.

I was with you until your final sentence. The emotions that inspire individuals to excess and/or suboptimally prudent financial decision making have nothing to do with race. I don't know why you injected that into what would have been an excellent addendum to/amplification of my comments.....

Ya know, there's an old saying if looks like a duck, quacks like a duck, than dangit, its a duck!!! 90% of rural america comprise of whites, that is just fact. Its white people in this country; along with a few minority strays that have whined endlessly since the big bailout of 2007 of their so called privelege no longer carrying its weight in this country, now either you've been on another planet or as most whites tend to be, your in denial. I work in finance, I work with mortgages every single day and I was there when all this shit hit the fan, when huge banks were buying up small banks and mortgage companies. I saw first hand, home values balloon out of control and deflate. I am also witness to the endless bankruptcies that came through our office afterwards. Most were home flippers, lots of hispanics, but the majority came out of rural areas where job loss was massive. Now I can either deny my reality and co sign with you or keep it 100, acknowledging that real recognizes real.

 

[usmbguest5318]

Wall Street and Goldman Sachs will do well as they always do and the societal wealth extraction continues unabated.

That happens because too many people "stretch" and bother to live in places like this....

....instead of saving more of their money and instead living here

...and "stretching" to also buy a (or another) modest income producing property so they will eventually have the means to live in a real mansion instead of a "McMansion," or not and come to their senses and ignore the cultural stimuli associated with outward symbols of status and success.

Doing that all but guarantees one won't ever be able to live here.

Quite simply a simple rule of thumb that's very easy to follow is this: until one has actually "made it, live in a property valued at 1/4 to 1/2 of the total value of one's income producing assets. What's "made it?" Well that varies by location, but in all locations it's greater than $5M in net worth. Why? Because in America, the way to make it is to be a capitalist in some regard. One of the easiest ways to do that is to be a landlord.

I'm not intimating that folks not buy a big house. I'm saying that far too many people do so "one their way up" instead of upon or after "arriving." Doing that is one of the surest ways to slow one's "arrival," especially if the only means one has for getting there is one's salary, unless one happens early-ish in one's life to command a very high salary.

Now I can't say that's going on everywhere, but I can say that in my part of the country, about all that people seem to demand, as evidenced by the types of new homes that are primarily built, is a big house, even though they don't lead a lifestyle that calls for actually needing a big house.

Can I add to your brilliant analogy.....there is also a sense of entitlement that comes with those desires to live outside one's means. Take for instance rural america....you have all these subdivisions being built, all based on some one hit wonder manufactoring base that paid good wages that sustained a community and created middle income existance for generations of families. Then one day, due to globalization and NAFTA, it ups and leave...meanwhile you got these families, refusing to either move or downsize, but instead want to whine their misery and adversities onto minorities and the former president. They turn into victims of white suppression.

I was with you until your final sentence. The emotions that inspire individuals to excess and/or suboptimally prudent financial decision making have nothing to do with race. I don't know why you injected that into what would have been an excellent addendum to/amplification of my comments.....

Ya know, there's an old saying if looks like a duck, quacks like a duck, than dangit, its a duck!!!

It is an old saying. It's one that only fools take seriously and apply without thorough analysis to serious matters. Wise men use it too, but only as a concluding remark, not to introduce the their argument.

I work in finance, I work with mortgages every single day and I was there when all this shit hit the fan, when huge banks were buying up small banks and mortgage companies. I saw first hand, home values balloon out of control and deflate. I am also witness to the endless bankruptcies that came through our office afterwards. Most were home flippers, lots of hispanics, but the majority came out of rural areas where job loss was massive. Now I can either deny my reality and co sign with you or keep it 100, acknowledging that real recognizes real.

Or you might consider that the matter is not binary in nature. Would that these flippers were less speculative and instead were to have purchased properties more suited to their actual means -- that is, were they to reach quite so high so soon -- the calamity of 2008 - 2009 would not have led them to the ruin you witnessed.

Put in more detail, instead of endeavoring to buy the "dream" properties for which they contracted, buoyed by financiers' offerings of balloon and other "creative" loan terms the downside of which triggered by the transpiring of events over which the buyers had no control, they would not have found themselves so "f*cked over" when those woeful events materialized. You see, the reality of such "rosey" mortgages is that one must be equally able to pay them when things were "all good" and when the tables turn. That simply was not the case for many, thus the foreclosures you witnessed.

There is also the basic matter of whether the property in question is actually worth the agreed purchase price, which when compounded with one's buying a property by contributing nothing to one's equity share in it, and the dilemma and risk increases. Be that as it may, the reality is that when buys real property with one of the traditional means of financing, the consequence of the property value's rise and fall of is no matter unless one is forced to sell the property.

As a small buyer/investor in real estate, it was but a simple rule to follow: assume ownership by having an equity state in the property at least equal to the interest one must pay over the life of the loan one uses to buy it. If that means I buy a less grand home because I haven't the money to do that, well, so be it. Better not to risk my financial solvency for momentary emotional satisfaction for I can assure you I will be more than emotionally devastated when the market moves against me. It is then that my "duck" of a property will show itself to indeed be a goose and those lenders snakes in the grass set to devour me, the mouse who allowed himself to by them be deceived.