It's coming clearer to me why Bush recommended everyone buy a home (at exactly the wrong time).
It's becoming crystal clear to me why Greenspan recommended Americans get ARM loans versus fixed, right before he started to raise interest rates fourteen straight times.
The rich get richer, the poor get poorer, and it's never been more clear than right now. This is why the rich are rich, and why the poor are poor. And it'll never change.
The wealthy are smarter than the poor, and they, and their sons, run the world. Deal with it.
Wealthy Escape Home Market
California's wealthy investors are choosing to invest less and less in real estate, a trend that local experts say should serve as a beacon to all real estate investors in the county.
The message some financial advisors in San Diego are giving wealthy investors is clear: Those clients who can afford to sell their investment properties should do so.
"If you have an investment property, this is a wonderful time to get the heck out," said Richard Ashburn, an investment manager and financial columnist in La Jolla. "If you're in a negative cash flow situation, you're nuts to hold onto it," he said.
Dorvillier said the wealthy investors he works for have recently been moving to liquidate their real estate assets. He said the situation is analogous to what happened during the dot-com crash.
"A lot of those affluent investors learned their lesson with their Qualcomm stocks and their Enron stocks, and they don't want to see that happen again," Dorvillier said.
April 19, 2006
The wealthy get out, just as the poor get in. Any questions?
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27 comments:
I would highly recommend reading this book:
What Has Government Done To Our Money?
Maybe wealthy people are wealthy because they make fewer dumb decisions than poor people. I read that Warren Buffett sold his one CA property last year for $6M. It was a tiny house on a 1/10 acre lot. He figured the house was worth nothing, and the fact that the land had appreciated to $60M/acre meant the RE bubble was peaking.
Now some friggin' idiot bought that property from Buffett, and the dufus probably will loose his shirt in the coming collapse. Why should we feel sorry or blame Buffett for the other guy's predicament?
How can you become rich if you rent an apartment or house? Everyone knows it's a fact property owners are overall wealthier than renters.
How can you become rich if you rent an apartment or house? Everyone knows it's a fact property owners are overall wealthier than renters.
It's also a fact that people who own Mercedes S-Class's are overall wealthier than people who own Toyota Corollas. So I'll buy 10 Mercedes, then I'm guaranteed to be rich, right??? LOL!
Oh come. You know tha car rule of thumb: they depreciate as soon as they are driven off the lot. House on the otherhand..well let's just say..it only goes up!
>> How can you become rich if you rent an apartment or house?
In the olden days (pre-2000) people did something called "work". They also invested in business (often their own businesses) and engaged in something called "commerce". Often enough, people made lots of money and became rich.
Believe you me, this "work" thing will become popular again soon.
Oh come. You know tha..
My point is that the correlation you cite is stupid. It's like saying people who have lots of money in their bank accounts are overall wealthier than those who don't. Duh!!!!!!!!!
"Wealthy people" is a self selecting group. Dumb decisions drop you out and a string of good decisions gets you in the club. Don't confuse association with causation.
Doesn't it seem a little late to be getting out of the market if profits were the goal?
These people who are just cluing in now are not really THAT smart.
The smart ones got out last spring and summer.
This latest batch is going to have an awful lot of competition.
I live in a special bubble calles Riverside/San Bernardino county where well priced, noce homes are still selling like hotcakes. I just sold 1 and made a killing. I paid 130k for it back in 96 and sold it for 55k. Swwweeeeeeeet.
oops 550k that is
"How can you become rich if you rent an apartment". . .my aunt who was a school teacher and then a principal always rented in San Francisco. . .when she died at age 90, she left the family over $600K in stocks and bonds. . .she bought nice safe utilities, oil companies, and bonds. . .she reinvented the dividends, and during her retirement, lived off the income. (an interesting side note. . .she owned Pacific Gas and Electric since 1951, and when it was down to $8 a share during the California power crisis, she estimated that her cost was about $1.50 a share based on splits. . .she kept it for us, and PGE is now trading at $37 and has resumed its dividend. . .who says it doesn't pay to buy and hold")
People get rich by buying low and selling high. The people who bought the past 2 years and this year are buying at the high. This is true in bubble markets. I know there are some areas where the prices are normal and people can still afford to buy a house without taking an interest only ARM 50 year mortgage.
This is not a surprise. Herd mentality has taken over this country. That's one reason I banned any kind of People, US entertainment, etc magazines from my house. People are taught to be sheeple and just do what others are doing. Whatever happened to being original? BUying a monster SUV is not original. Buying a McMansion is not original. Buying SOMETHING because someone at the water cooler told you about the killing he made is the American way today.
IN essence it's just a trap set up by smarter people to suck money and create a slave bill paying class out of people too stupid to identify the trend.
Rich people have the resources to ride out crashes, poor people don't. It's easy for Warren Buffett to buy and hold a stock as it goes up and down. It's not so easy for granny to hold a stock as it is plunging and she sees her retirement account melt away. She sells then the stock recovers to new highs. It's the same in a real estate crash. People with investment homes will be forced to sell at a loss or foreclosed on, while the rich can ride it out and see new RE highs in 5 or 10 years.
Yeah. My father made 800,000 dollars in Qualcomm. But I agree, anyone stupid enough to buy now deserves what they get, really. We need more catastrophe's because people think they can keep making irresponsible decisions and the government is going to rescue them.
People with investment homes will be forced to sell at a loss or foreclosed on, while the rich can ride it out and see new RE highs in 5 or 10 years.
Don't hold your breath...
Sometimes people get wealthy because:
1.) they have a brain and use it
2.) they live within their means and don't give a hoot about impressing others
3.) they have good health and some good luck as well
4.) they work hard
5.) they manage to meet/know people in a position to further their cause
and sometimes they are just born into it, and have none of the above attributes...these tend to be the most unhappy of people because they have been robbed of the chance to create wealth on their own, a highly rewarding endeavor
And sometimes someone who was just born into it pretends to be President because it makes him feel important.
Again with the sensationalized and generalized easy put downs. Some poor people have had ongoing severe health problems that prevent them from working.
Keith, try using your brain more and ease up on the judgements. It's getting old.
Greenspan told congress that people could save a lot of money by using arms, he just didnt tell people that he would be sawing off their arms with rate hikes.
Let me add something here. My neighbor who makes a lot less money than I do drives a Cadillac Escalade. One of my friends said "that guy must be wealthy". That to me symbolizes what is wrong with this world. Of course I look like the idiot when I reply that owing a Escalade doesn't show wealth, it shows the ability to get a loan.
Most of the people who I know that are well off drive old paid off cars and live modest lives. One millionaire I know has the smallest house on the block and drives a Sebring. Sam Walton, the richest man in American at a time, drove a 1979 Ford pickup truck to the grave.
People who own a Ferrari are rich. I'm going out to buy a Ferrari tomorrow so I can be rich
http://biz.yahoo.com/pfg/e03greenspan/
"That's why I was so shocked a few weeks ago when Chairman Greenspan let loose with a real doozy: he asserted that homeowners could save a ton of money if they took out an adjustable rate mortgage instead of a fixed rate mortgage. For his evidence, he pointed to what would have happened if you had taken out an ARM 10 years ago. Back in 1994, fixed rate mortgages were around 8 percent and adjustables were in the 6 percent range. Since then, rates have been on a strong downward trend: a 30-year fixed rate currently carries a 5.5 interest rate, while an ARM can be 4 percent or lower. So if you took out that adjustable 10 years ago, every time the ARM rate came up for an adjustment - back then you had your ARM rates reset every 12 months based on the then current rate - chances were slim that your payment would increase, since rates were falling, not climbing"
in any asset market, either stocks, bonds, or real estate, money always changes from the weak hands to the strong hands. that's the reason we have those financial markets in the first place.
better financial education = more financial sophistication = more independent thinking = better financial well-being = richer
in any asset market, either stocks, bonds, or real estate, money always changes from the weak hands to the strong hands. that's the reason we have those financial markets in the first place.
better financial education = more financial sophistication = more independent thinking = better financial well-being = richer
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
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