While in graduate school, I decided to buy a house rather than rent. Fortunately for me, I got what was a comparatively good deal in the local market, and when my funding in graduate school dried up, I was able to sell the house for a handsome profit. One of my neighbors was not so lucky. At the time I sold my one house, he owned three, and it was all he could do to work enough overtime to make the three payments. These were not the only ones he owned, he having previously flipped two other homes in the rising market of 2005. The problem was that in his haste to make a quick buck, he took on more than he could chew, and when the market tanked and he found himself owning houses that he could not sell, it may have destroyed his credit, his career, and his family. I moved away and never found out what happened, but last time we spoke, he was worried because he was stuck holding the hot potato.
Entire industries exist encouraging you to use other people’s money in order to make a quick profit. When they can, government officials warn us of these ponzi schemes, but the government is involved in them too. Social Security looks a lot like a pyramid scheme, and no matter how innocuous the term multi level marketing sounds, companies like Mary Kay exist because the people at the top sell the idea of quick money to people at the bottom. The trouble for the lay person is that the quick money comes easiest to the people at the top; just ask Bernie Madoff. In fact, a blogger I follow suggests to his readers that they take out credit cards, use balance transfers with low fees to generate cash flow, and then invest the cash for a return of interest, and then pay it back in full before any payment is due, essentially getting interest free loans. Eventually someone has to pay for this, and the people who make borrowing easy are counting on you not being able to pay the piper.
Sometimes, the scams are people trying to make a quick dime at other’s expense. The same people involved in ammo fleecing on a petty scale probably rail against “evil corporations” who go after “corporate profits” while they excuse themselves because it’s only a few boxes or only $20. The scale is not what makes it wrong. Furthermore, what happens when you end up with ammo you can’t fire? Like my neighbor who ended up with houses he could not sell, you have things that are of no use, and eventually the ammo market will recover, and some people will have “invested” in ammo they cannot sell. I will not be surprised to discover that certain politicians made bank on rising stock prices for Smith and Wesson or Sturm, Ruger, and Co. It is also a matter of public record that some people manipulate the rules to benefit themselves. Harry Reid manipulated land prices to enrich himself and his sons. They think you are selfish, but they are totally justified because they “work for you”. I’m sorry, but none of those people, including Harry Reid, have ever done anything specifically at my request or that specifically benefitted me. Most of it was coincidental and accidental.
Using debt to make money is a popular notion and an old one, but it is a game of hot potato. The only ways in which I am aware that indemnity ever dies is when civilizations or governments collapse and reform in new ways under new leaders. Even at death sometimes your debt passes to your descendants, and even the death of Richard did not free John Lackland from the debt of the crusades or Richard’s redemption from Leopold. Eventually, someone is left holding the bag, on the hook for everything, and it would be both foolish and arrogant to assume that we will not be the ones stuck with the obligation to pay back what we borrow. My neighbor hopefully found a way; I have a sneaking suspicion that his life collapsed under the burden of debt. I find it odd that so many people warn me that “if it sounds too good to be true, it probably is” and then dive right into something just like that. When the pied piper came to collect his debt, he took the children. Unless we learn from that tale, we may suffer the same fate. Release yourself from bondage. Free yourself from debt. Then you don’t even have to touch the potato or worry about getting burnt.
No comments:
Post a Comment