"It's going to get worse before it gets worse."

[bcassill]

Re: "It's going to get worse before it gets worse."

This debate makes me remember when my wife and I decided to buy our first home about 25 years ago. We researched the hell out of the question,"What can we afford?". (And that was much tougher research prior to the internet).

We were NOT swayed by mortgage brokers, real estate agents or others that had an obvious conflict of interest. We asked for their input, but we had to make sound judgements about who to believe and what made sense.

We were NOT swayed by peer pressure and getting the biggest, most expensive house we could get into so as to trick family or friends into thinking we were somehow "better" because of the size of our house.

We were NOT swayed by ARM's or other gimmicks that would allow us to bet on the come.

What we did was to make logical, sensible, clear-headed, and conservative decisions as is our responsibility.

I used to have more compassion for the homeless, downtrodden, less fortunate, etc., but I'm sorry, the older and more experience I gain, the more I believe in personal responsibility and the more I see that many, many people are homeless and downtrodden as a result of bad personal choices. I don't have any compassion for people that are experiencing the obvious, likely outcomes of their own actions. Two examples...

We know two couples that have recently divorced as a result of financial strains created by the housing bust.

The first couple bought an "investment" home at exactly the wrong time. Nothing wrong with that, right?. Bad timing, happened to a lot of people. These knuckleheads, however, bought an investment home that was $1,400,000...more than 3x the price they paid for their primary residence! That's just bad decision making and I have little compassion for them as they now fight over the scraps, each trying to maintain their own personal status quo.

The other couple sold their custom home before the collapse for over $100,000 more than they paid for it. The gain isn't staggering, but they sold it after living in it for less than 2 weeks. These knuckleheads built a custom "home" together for them and their 4 kids, then flipped it after 2 weeks for the $100,000+ profit and in spite of the dislocation and inconvenience it caused the kids. I kept saying to him "But it was your HOME." To which he replied, "Do you know how hard it is to make $100,000?!". In my mind, the divorce here was no surprise as this guy had his priorities wrong and his head up his ass.

Though not homeless, these couples are fairing far worse as individuals than they were as married couples. My point being, I simply don't have sympathy for idiots that take gambles and make bad decisions once those gambles and decisions play-out to their likely conclusions...especially while me and my fellow iTuliper's are working hard to make good decisions, protect what we have, and intelligently increase our net worth without taking on too much risk. The hell if I'm willingly giving-up my hard-earned, dilligently protected and nurtured assets for those knuckleheads, and the hell if I'd give one of my 5 houses to a homeless person (if I had 5 houses that is).

The problem is that economic downturns are a bit like going to war. You have a thing called "collateral damage." If you are grown up and are able to physically fend for yourself, then by all means go and make stupid decisions (as in your example) and suffer the consequences. What upsets me are the kids who become the victims of other people's stupid decisions or the elderly who get snookered by predatory lenders. It is those victims who do not have the means to fend for themselves that I refer to as "collateral damage." An able bodied adult, if they are industrious enough and presented with sufficient opportunity can work themselves out of almost anything. It's just a little harder pill to swallow when you are talking about someone's 90 year old grandmother or their 6 year old son.;)