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We`re unprepared for coming financial crisis

Stephen1151

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When the financial crisis hit us very few expected it. I'm no economist but I tend to think that when everything is roses...be afraid. When everything looks bleak...that may be the time buy.
 

Rickson9

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[quote user=beachbum]When the financial crisis hit us very few expected it. I'm no economist but I tend to think that when everything is roses...be afraid. When everything looks bleak...that may be the time buy.




I agree. It's one of the easier ways to get rich. Desperate sellers don't negotiate - they beg.
 

Thomas Beyer

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[quote user=beachbum]When everything looks bleak...that may be the time buy.
I hear of great deals in Greece & Syria. Buy in cash and wait it out .. not for the faint of heart and with deep local expertise & trustworthy contacts only.



Otherwise, the article was overly negative and highlighted what might happen.



Of course first Greece, then Spain, Portugal and Italy, perhaps Ireland will leave the Euro. That makes total sense. All those countries have abdicated their monetary powers to the ECB, controlled by Germany and France. A great benefit for N-Europeans, especially Germany, but at the expense of S-Europe.



How can they compete ? They could lower the currency and sell wine, hotel rooms, car manufacturing labour or olives at far lower prices and have a humming economy. But they can't anymore. N-Europeans benefit at S-Europeans expense. Lutherans 1 vs Catholics 0. Call it what you may, but the Euro zone will split - as the alternative of a total top-down driven European democratic system will not happen. The earlier politicians and citizens will realize it the better.



So, don't buy that Greek Island quite yet. Buy it in Drachma in 2014 or so, then wait for the Greek currency to appreciate and the the economy grow!



That's why I do not invest in Germany, as the Euro will further deteriorate. Then, once the S-European neighbors are gone from Euro, wait for the Euro to strengthen. Maybe by 2014 or 2015.



Imagine Mexico, US and Canada having one currency, the North American $. Mexico's industry and tourism would suffer tremendously, and Canada would have an even lower unemployment rate.



Mexican peso is what, 14 peso per US $ .. used to be around 9 or 10 .. a 40-50% loss of purchasing power .. that is what will happen to the Greek Drachma and Italian Lira and Spanish peseta when they are re-introduced, and their pain will be over while N-Europe's pain will start then due to a strengthening currency and far lower exports.
 

invst4profit

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Let the chips fall where they may. I will manage nicely on my positive cash flow and pension.

Not so bright of a future for my kids employment wise unfortunately although a economic crash could create opportunities.

With a real estate crash I could assist them getting into investing. The up side for them could be very bright

coming out the other side. Plenty of time at their young age to reap the rewards of a crash with daddy's backing.



Maybe we should all hope for the worst assuming we have wisely invested in cash flow......
 

Rickson9

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[quote user=invst4profit]Maybe we should all hope for the worst assuming we have wisely invested in cash flow......




I agree. Although for us it wouldn't be 'the worst'. Having opportunity is always the best.
 

Stephen1151

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I have to admit that I do get afraid of what will happen in the future. I also find that if I listen to that fear that im afraid to make any financial moves. All I can do is remember that if I never take a risk, I will never have a chance to get ahead. That being said, anytime I purchase real estate I am afraid but I force myself to do it. In retrospect all I can say is I wish I had not been afraid and bought more places. I try to keep that as a lesson to myself to spur me on to buy more places if they make sense.



I was at the bank the other day and saw an ad saying "if you invest 50,000 dollars we will pay you a monthly cashflow of $160 dollars per month. I had to laugh to myself as I just spent $30,000 downpayment on a place that is now cashflowing 300 dollars a month. (thats after all expenses including property management fees). So....if there is a big crash and I lose it all...well then I gained a great learning experience and if the crash is not so big....well then I gained a learning experience and some monthly cash flow...



Hope that this helps thoese who feel fear as I do. It just seems to be somthing we have to battle and move past.
 

Thomas Beyer

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[quote user=beachbum]I just spent $30,000 downpayment on a place that is now cashflowing 300 dollars a month.
PLUS $200 or more in monthly mortgage paydown PLUS a likely value appreciation of $100 to $500/month depending on the region you bought in.



People need a place to live. It might as well be in YOUR house.



Buy it in economically strong regions (or least weak) with in-migration and job growth and you will be fine.



FEAR = False Evidence Appearing Real.



Fear too much fear !



Use common sense, in sensibly levered, well located and impeccably managed rental properties, and you will do better than 90% of the population
 

bellaswan

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The U.S. subprime mortgage crisis was a set of events and conditions that led to the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages.

The percentage of new lower-quality sub prime mortgages
rose from the historical 8% or lower range to approximately 20% from
2004 to 2006, with much higher ratios in some parts of the U.S.http://http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#cite_note-ssrn-0
 

Thomas Beyer

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[quote user=bellaswan]The percentage of new lower-quality sub prime mortgages
rose from the historical 8% or lower range to approximately 20% from
2004 to 2006, with much higher ratios in some parts of the U.S.
Indeed .. far too much government meddling in the housing & mortgage market ! I am glad Jim Flahery dialed down the Canadian rules .. and I still think that 5% down is far too low a downpayment, as far too many Canadian own too big a house at too young an age with too much debt !
 
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