there's plenty of blame to go around when it comes to the subprime debacle. you can blame the legislators, the politicians, the bankers, the regulatory bodies... everyone gets a part of the blame. except for the home buyer, who was apparently "swindled" into buying into a mortgage or refinance loan when they clearly could not afford it. more accusations point towards a war against black america. a battle to repossess some of the hard-earned wealth achieved by black america.
now, was there some deception? yes. but is the home buyer completely innocent when it comes to the subprime debacle? no. there comes a point when you are buying something, or contemplating buying something, when you realize you probably can't afford it. however, you turn that switch off, or you justify it to yourself by saying, "but house prices will never stop going up..." which is what happened with the average american home buyer.
there is a big lie that continues to exist till this day: that somehow you need to own a home in order to be successful. that somehow you need to own a home to be a real adult. that the home is the be-all, end-all to the completion of a family unit. this is bullshit. homes cost money. lots of money. but a person can live a very respectable and fulfilling life renting for the rest of his or her life, so long as they save and invest their money. but people want to buy homes, and it's this delusion that helped spur people to sign into agreements for homes that they couldn't afford. homes are still seen as the ultimate in personal wealth. it's a status symbol. and that's where most of the problems lie.
i disagree that the subprime fiasco could be an issue of color. if it is, it's only about one color: green. too many people got too greedy too fast, including the home buyer, because for years people were just raking it in, only to realize too late that nothing lasts forever. was this foreseeable? of course. but no one bothered with the warning signs. if anything, markets, no matter what markets, tend to be cyclical. at some point in time, a market correction occurs. it was about time for one.
do i plan to be a homeowner at some point? yes. but not at the risk of my life savings, and not at the risk of my standard of living. does this mean i may have to rent for the rest of my life? probably. but that's okay.
bottom line: if somebody tells you something that is too good to be true... it usually is. it doesn't matter if it comes from your financial planner or your parents or your god. there are no guarantees in finance, just as there are no guarantees in life. because nothing goes up forever. not even housing prices.
now, was there some deception? yes. but is the home buyer completely innocent when it comes to the subprime debacle? no. there comes a point when you are buying something, or contemplating buying something, when you realize you probably can't afford it. however, you turn that switch off, or you justify it to yourself by saying, "but house prices will never stop going up..." which is what happened with the average american home buyer.
there is a big lie that continues to exist till this day: that somehow you need to own a home in order to be successful. that somehow you need to own a home to be a real adult. that the home is the be-all, end-all to the completion of a family unit. this is bullshit. homes cost money. lots of money. but a person can live a very respectable and fulfilling life renting for the rest of his or her life, so long as they save and invest their money. but people want to buy homes, and it's this delusion that helped spur people to sign into agreements for homes that they couldn't afford. homes are still seen as the ultimate in personal wealth. it's a status symbol. and that's where most of the problems lie.
i disagree that the subprime fiasco could be an issue of color. if it is, it's only about one color: green. too many people got too greedy too fast, including the home buyer, because for years people were just raking it in, only to realize too late that nothing lasts forever. was this foreseeable? of course. but no one bothered with the warning signs. if anything, markets, no matter what markets, tend to be cyclical. at some point in time, a market correction occurs. it was about time for one.
do i plan to be a homeowner at some point? yes. but not at the risk of my life savings, and not at the risk of my standard of living. does this mean i may have to rent for the rest of my life? probably. but that's okay.
bottom line: if somebody tells you something that is too good to be true... it usually is. it doesn't matter if it comes from your financial planner or your parents or your god. there are no guarantees in finance, just as there are no guarantees in life. because nothing goes up forever. not even housing prices.
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