good money after bad

GOOD MONEY AFTER BAD
I pretty much like to harp on one subject long enough for everybody to do as I suggest, if for no other reason than to shut me up. Being married as many times as I have ( still on my forth one- she moved back in so I failed to get rid of her ) I have picked up that unpleasant habit. Whine, bitch, and scold enough and the other person eventually gives in. Just to shut you up. Today, I am going to tackle the subject on throwing good money after bad, accompanying all my other anti-mortgage tirades. I am not opposed to other people being in debt for thirty years ( not for me, thanks ) but that presupposes a healthy economy for the life of the loan. I don’t think we are in a healthy economy any longer.
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The trick to all this is that you must be emotionally detached enough to admit this to yourself. Most people can’t do that. They can give you 101 reasons why a house is a good investment. But they can’t step back objectively and say, is this a good idea? If you had sold your soul to the company store, sure, what the hell. You weren’t going anywhere. Why not set down roots? You were working for the Man for the next fifty years, might as well have something to give to the kids or grandkids. But that was old school. There is no more corporate loyalty to the workers. None. Oh, some of them play the game. Try to get on the Fortune Best Companies To Work For list. But come crunch time, you can bet you will get a pink slip. And I don’t know why so many folks bought into this anyway. The worker holding the upper hand had a really short history. I’m not being anti-capitalism here. Perhaps anti-mercantilism. But mostly a realist. Betting the house and the kids college on the generosity of your boss was almost always a mistake. It definitely is now, and for the foreseeable future.
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A mortgage is just one of many ways that you become emotionally blinded. A place where you live and the work that you do and your lifestyle are others. You make a choice and then deny it was a bad one. Someone with twenty years into a mortgage is loathe to admit the area he lives in is bad. Or that his gum and glue dwelling doesn’t stand a chance without cheap oil supplies. He won’t admit commuting is a bad idea in an era of scarce oil. How can, for instance, twelve million people actually believe that living in New York City is anything other than a death sentence? How can folks think their houses will be a safe investment after our economy collapses? How can they spend thirty grand on a SUV when we are running out of oil? How can they live in a large metropolitan area knowing how bad crime is just to make a few extra grand a year? It is self delusion.
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Number one, you need to learn to be honest with yourself. Then, number two, you need to learn to walk away from bad decisions regardless of how much you have invested in them. Being honest with yourself is the harder of the two, so once you have that licked the other is easy. Look, we live in a money society. You can’t escape it. It cost 90-110% of your income to live every year. Your money is gone as soon as you make it. Don’t look back at what you spent and try to see what you can keep for it. It is all wasted money. Over priced rent or house payments. Cars that are 70% interest payment, taxes or overblown Union wages. Mandatory car insurance even if you never use it ( actually, if you do use it your cost rises so it is just extortion money to drive ). About the only bargain for the American consumer is food, and that is only because the true costs are hidden.
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Your money is gone. Forget about it. Don’t try to hold on to things just because they represent that money. Such as a overpriced house or car. Both are energy pigs and we are running out of cheap oil. Fast. Or staying at a job because it pays a little better. Or living in a dangerous area because of your house or job. Just stop throwing good money after bad. You can never recover the money already spent but you can save the money you would keep throwing down that money pit. Look at the Jews before World War II. A lot had no idea anything bad would happen to them. But I’m sure many were also blinded by their economic or emotional investment in where they were. They blinded themselves. And no, I don’t think leaving this country is a good idea. There is enough space here to get lost. We can still buy guns and carry them ( if you are in an area where you can’t- move ). And I think must folks that leave either have government pension checks sent to them or have telecommuting jobs dependant on a good economy. At least here you are on familiar territory.
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Before Y2K, a lot of you said, it can’t happen. What you meant was, I can’t believe it will happen because of my economic and emotional investment here. The few that did move, you just reacted a bit premature to a calamity. It will come, just hang in there. You can’t allow yourself to be blinded by the odds of disaster striking just because of poor past decisions. At the time you made the decision it was the correct one. Now circumstances have changed. You weren’t an idiot then, don’t be one now. It is not your fault a good decision based on old circumstances changed into a bad decision. But it will be your fault if you continue on the old course of action. Things change. Stuff happens. Be a willow and bend with that. An oak looks tough and majestic until a wind blows it down. Than the willow doesn’t look so puny anymore ( or at least it doesn’t look like firewood ).
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Too many things are lining up to form a perfect storm. It may not happen. Then your traditional investments are safe. But if it does, you are dead. You can gamble all you want. But don’t think wishing hard makes any difference in the end.
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