The United States have become Nation of Debt... - Posted by Michael Morrongiello

Real Estate Investing Retail
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Posted by dave on September 16, 2007 at 24:31:40:

I remember my dad made me save 1/2 of everyone of my paychecks in high school up to age 17. It was the best habit I ever learned. Then in my early 20’s when money was tight and I was on my own saving still came easy cause I would literally sacrifice basic needs just to retain money for savings and investments. When you have cash saved you can do deals like I did last week. I bought an 4 plex that needs total rehab for 8000 dollars. The property after 15k rehab will generate 1600 per month. I borrowed zero on this deal and the 23k I use in this deal requires no partners. No bankers , brokers or appraisers. More Americans might consider saving cause when you save and play with cash its more powerful then being a servant to the lender. I am doing 3 small deals this month like this. When the sub prime blows up and markets are in chaos and you have cash set aside you can really get great deals!

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The United States have become Nation of Debt… - Posted by Michael Morrongiello

Posted by Michael Morrongiello on August 10, 2007 at 17:49:23:

The appropriatly named sub prme “meltdown” is causing all sorts of concern like a person who has the jitters from drinking too much coffee. This concern is not only pervasive throughout our banks, securitizers, mortgage lenders, and Wall Street, but also abroad as many foreign nations have invested in our supposedly “safe” mortgage back securities and growing concerns…

Savings rates for individuals in the United States is at an all time low compared to China, India, and other emerging countries. There the propensity to save is engrained in thier culture.

The sad thing to see is how this great nation which was a productive manufacturing powerhouse has now become a “Nation of Debt” - with constant marketing targeting a “have to have it now” consumerism mentality and the encouragement of taking on more and more debt which has become the norm Vs saving for investments, to acquire something and the future.

Are you proud to be an American from the Nation of Debt…?

Michael Morrongiello

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Re:The United States have become Nation - Posted by Ken-Orlando

Posted by Ken-Orlando on August 26, 2007 at 11:58:57:

The dollar has been crashing for the past year due to our mountain of debt.

How low do you think it will go before it bottoms? Where should we put our cash to protect it?

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no more “old school”… - Posted by lukeNC

Posted by lukeNC on August 14, 2007 at 18:24:43:

“old school” values are gone…

We are a nation of reapers. The sowers are few and far between.

We have forgotten that it takes sacrifice.

Old school values are gone:

  1. If you cant pay cash-- you cant afford it.
  2. Save money.
  3. Hard work and perserverance does payoff.

I think about my parents and grandparents. They’ve lived in the same house for 20 years or more. Owe nothing on the house or very little. Driven the same cars for over 10 years probably. Worked hard at multiple jobs over their lifetimes – but were always working.

I always thought I get all that too, but faster. I’m still paying for those stupid mistakes. Now, I’m doing all I can to be like them.

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The United States have become Nation of Debt… - Posted by Tom Henderson

Posted by Tom Henderson on August 12, 2007 at 13:49:30:

Hello Mike
From an economic standpoint, we are witnessing the decay of a once free market mindset to that of a more socialist mindset. For the past century we have been taught that production need not preceed consumption, and that all that is needed to solve economic problems is to print more money, or vote for a politician that will provide for us. The printing of currency has been substituted for the production of values. Likewise, voting for politicians to provide for us has been substituted for economic laws.

Nature has dictated we cannot consume more than is produced, no matter what politician we elect, or how much currency a government prints.

Debt not repaid is a form of consuming without producing. The price of real estate is directly proportional to the financing available. These subprime loans were nothing but foreclosures in embryo, which artifically inflated the price of real estate. Add to this the refinancing programs available where homeowners were using their homes as an ATM machine, and the problem starts magnifying.

Nature has now stepped in and said, “No more”. This is going to have ripple effects as people can no longer refi their homes to spend from everything from going out to eat to taking trips to Vegas.

Consumption cannot exceed production. But how much do you want to bet that politicians from both sides will not mention this axiom, but rather try to everyone from China to the Republicans to the Democrats, rather than questioning a system where consuming without producting is deemed to be workable and without consequences. For some reason, politicians seem to think that the laws of economics can be over ridden by legislation or regulation.

It will be interesting to witness this economic phenomenom play out.

And if elected, I will not serve.

See you in Vegas.

Tom Henderson
H&P Capital Investments LLC

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There’s a Plus side to this… - Posted by acw

Posted by acw on August 11, 2007 at 09:25:39:

American’s are consumers…its a market that is Envied by many nations. We not only spend our money…but our kids money and the nations money…years ahead. That’s why the market is somewhat healthy (albeit not perfect). China and the manufactoring nations love us. We buy everything of theirs and very cheaply i might ad.

The downside is of course…we produce NOTHING! This more than the debtor nation issue is the real downfall of our economy…and it makes it VUNERALBLE.

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Proud to be Different - Posted by Jimmy

Posted by Jimmy on August 11, 2007 at 08:48:07:

there’s nothing new here. 90% of the people in this country (this world!!) have no clue about money, savings, economics…they live paycheck to paycheck, buy an occasional lottery ticket, hope a rich uncle will leave them money…

another 8% do have a clue, but do not act in accordance. these folks earn excellent incomes, but spend all of it on lifestyle. and about 2% absolutely get it, and own everything in sight.

and that is OK with me. [it is my belief that if we took all of the world’s wealth and redistributed it equally, within a generation, we would be right back where we started. ]

I had the pleasure of representing wealthy business owner clients in my tax law practice from 1985-2005. My clients represented a slice of that 2.5%. Inveterate savers all. They lived well below their means. They did not inherit their money, contrary to the popular myth among poor folks. allowing excess income to pile up is a necessary pre-condition to wealth accumulation. and because they saved themselves into liquidity, they did not have to rely on 100% financing or creative REI techniques. which means their investments were A LOT HEALTHIER than the 100% people. they could tolerate down markets, when the over-leveraged folk were wiped out.

but that’s only half the story. its what they did with that excess income that made them wealthy. and guess what that was? yep. u got it. REI.

generally speaking, these clients did not park their wealth in the stock market. Rather, my clients were avid real estate investors. they made their money in 100 different businesses, trades and professions. but the common thread was strip malls, apartment buildings, rent houses, office parks, secured firsts and seconds, even some mobile homes.

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Re:The United States have become Nation - Posted by Abdenour

Posted by Abdenour on September 14, 2007 at 24:13:40:

Hi Ken,

I protected myself against a drop in the dollar by borrowing US dollars and buying stock in a Canadian company (Platinex) that explores for Platinum and Platinum Group Elements, since those commodities are needed worldwide. Every time the US dollar drops against major world currencies, my networth goes up, whether you measure it in US dollars (since the value of my stock goes up in US dollars, even when it’s flat in Candian dollars) or in other major currencies (since the money I borrowed is devalued, and I have to pay it back with devalued dollars).

You can look up Canadian stocks on tsx.com, and buy them using TD*Ameritrade in the US (place your orders by phone, not online).

Abdenour

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NOTHING except 1/2 of the worlds food supply - Posted by sarcasm

Posted by sarcasm on September 05, 2007 at 14:25:07:

nt

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Re: There’s a Plus side to this… - Posted by IB (NJ)

Posted by IB (NJ) on August 12, 2007 at 10:13:08:

If all you are is a consumer and not a producer (i.e. entrepreneur) then you are merely a slave within a capitalist society. Eeeewwww the envy…

Ib

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Re: Proud to be Different - Posted by Lonnie

Posted by Lonnie on September 12, 2007 at 09:41:56:

very true. Save 10% of your check every week, I dont mean for gas money and beer for thursday, save it. There are only 3 ways to get ahead, live below your means, make more money than your ex-wife and invest it. thats it.

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True… - Posted by acw

Posted by acw on August 13, 2007 at 05:39:33:

True IB…

But what about the manufactors who produce products for NO PROFIT! (ie, china, vietnam, etc).