4 posts tagged “debt”

I love cars.  I've followed the car market since the mid 70's and not owned a USA domestic name plate until recently. 

But things are set to change.

GM is marketing the 2008 Malibu as "the car you can't ignore" and that is the truth.  This car is a game changer and gives me great hope that the US Domestic Auto Industry may survive into the coming decades.  If this car is just the start, GM should do well over the next few years!

Take a tour with "Maximum Bob!"  (Bob Lutz, GM's Design Czar)

PS - regular followers of this blog will remember that I traded my '04 Mazda RX8 for a used Chrysler PT Convertible.  I must confess, while this car lacks a nice interior, I'm very much convinced that the US Auto Industry IS capable of building desirable, reliable vehicles.  In 3 months, my PT has been trouble-free and fun.  The tires were well worn when I bought the car and recently I punctured both driver-side tires on road-debris.... I was pleasantly surprised that replacing ALL FOUR tires cost less than $250!  That all inclusive... mounting, spin balance, new stems, California disposal fee for old tires... EVERYTHING.... out the door for less than $250.  This car is the best financial decision I've made... and I'm loving the sunshine with the top down!

Lately, I'm feeling very, very smart.  I've been highly skeptical of California Real Estate for several years.  I went so far as to sit out the market, which I believe to be overvalued.   Now, it's too soon to know if I'm right, but evidence is stacking up. 

Part of the reason I believe it is a bubble is the amazing "herd mentality" involved.  The topic of California Real Estate absolutely makes people nuts.  Rather than assessing it as "a purchase that you live in," people get all starry eyed as they count their future appreciation.  They never stop to ask if the price "makes sense" (maybe that should be cents!)

My hometown, Rochester NY, has sat out this insanity.  Their property values have risen in a way consistent with the historical mean.  When I talk to my sister or my friends back home, they are quite bemused by the insanity of the real estate boom in California.

But what has happened in California (and Florida, and Nevada, and Arizona....) is quite common in our history.  What we've lived through over the last few years is a classic bubble.  Learn more about bubbles and the related mania here.  The think to remember about bubbles is that they always end badly for those that get sucked in!

Like I said earlier, I'm feeling smart because the evidence is piling up, BIG TIME

Firstly, those that bought with the belief they "could not lose money" in real estate are still clueless and have no idea what they've signed on for... and when they figure out the reality of their debt slavery, they make decisions that would shock many... I'm not talking about bankruptcy but things much, much more drastic.

While so many are blindly keeping their head in the sand, foreclosures are becoming rampant and pricing reality is starting to catch up with people.  Many are resisting the inevitable and trying almost anything stay afloat, but it's not working.

It's important to note, that this bubble was created by cheap credit and now the "collateralized securities" markets are in free fall.  Any hope of new buyers propping up the market is gone because the banks have stopped making loans.

The question becomes, how bad will it get?

Personally, I'm planning to profit from all this... as I believe that anyone that is debt-free and has cash on hand in 2010 will have the world by a string!  I just hope I can turn my finances around in time! 

ENOUGH BUMMER TALK! 

Media Tidbit
in honor of the above post: Anxiety (Get Nervous) by Pat Benatar... gawd, she was great!

I follow a great blog about personal finances called "blogging away debt."  Today's posting is about the psychology of ending up in debt.  It's titled "Why do we Struggle being forced into Frugality?"

I got interested in this topic when I did a personal financial statement in January.  In spite of earning six figures last year, as of Jan 1, 2007 I was slightly more than $40,000 in debt!  Therefore, 2007 became the year of paying down debt and I will periodically update you on that.

I will say, it is more difficult than it should be!  Not because it's difficult, but because our "consume NOW!" culture seems to encourage "buy now/pay later" at a fever pitch these days.

Following the blogs of other people trying to beat this demon really helps me stay on track.  I took a vacation in May, so I haven't made as much progress as I hoped but I am hoping to stop being a debt-slave sometime in 2008.

Double Tidbits today

I was listening to Big & Rich's new CD on the way to work today and just love them! 

They are the craziest party band in country pop.  Heck, some of their stuff sounds more rock-n-roll than country... and they definitely cross-genres when they include rappers on their albums (Wyclef Jean on the new one).  In a way, they remind me of the B-52's (The Craziest Party Band from Athen GA). 

Two songs for the price of one!  Their original break out hit "Save a Horse, Ride a Cowboy" and their brilliantly lyrical "Never Mind Me."

Both songs take common phrases and turn them in to lyrical spun gold.  I mean, who else could write a song based on a popular bumper sticker (See pic to the left)?