I spent most of the 90's in deep, deep credit card debt, because I used cards to 'bail out' my sport card losses. I don't regret it, though it caused me and Linda a great deal of stress at the time, because we came out the other end with our business intact, the ability to open another business without debt and profitable from day one.
We ended up buying a house just prior to the price surge, (a matter of mere months), with a fixed rate, and we were able to get to the 20% down within a couple of years. The house may very well end up being worth about what we paid for it; but our mortgage payment is manageable and our interest rate was at a 'historic low' when we took it on.
Anyway, for the last half decade, even during a time of fast growth in my business and downtown, I have not been the least bit tempted to take on debt. It's been pay as I go.
In a way, having dug myself out of debt, inoculated me from the more severe abuses that might have occurred in a time of easy credit.
Also, while pogs and houses are a little different; the dynamic that takes place with bubbles is very, very familiar to me. Pogs, beanie babies, pokemon, comics, etc. etc. have a similar psychology involved, and a similar trajectory and dynamic.
I know what happens when a bubble bursts, and as I've been saying for a couple of years now, it's always way worst than you can possibly expect, and takes way longer to unwind.
And they rarely come back. When this financial crisis is over, and houses finally hit bottom, they aren't going to suddenly shoot back up again. Money will be harder to come by, and houses will probably go back to being a place you live.
Funny how it all works out.
1 week ago