Interest rates are going up. That’s certainly putting the brakes on housing markets. It’s going to make borrowed money in general more expensive. I’ve seen it before. It’s been worse. When I bought my first house interest rates were around 16%. That sounds crazy high. However, I paid just $15,000 for the house. That’s not a typo. Sure, it was a small house and needed some work, but my monthly payment was less than $170.
As conditions change there were be winners and losers. If you have the cash there’s going to be some good deals. We aren’t quite there yet. There’s going to be a lot of pain before the really good deals show up. By pain I mean things like bankruptcies, foreclosures, repossessions -rinse and repeat for a few cycles. Right now businesses and individuals are doing their best to hold on but not everyone is going to make it financially.
In a couple years I expect to see some really good deals on used cars and I’m planning accordingly. Right now the prices on toys like boats and motorcycles are already softening. They toys are the first to go.
Historically I tend to do pretty well during tougher times. I don’t have the right mindset for hopping on financial bubbles. Boom times don’t really benefit me much. When things get tight, that’s where I tend to do better as I can make my limited income do more for me.
Of course, I’m no financial advisor. My finances have been messy from time to time over the years. There’s more to life than dollars and cents.
-Sixbears
As we are of similar age 6 Bears, neither of us have seen a real depression. Minor economic troubles, a recession or three.
ReplyDeleteWe both have knowledge of seniors back in the 70's having to decide between food, medicine and heat-taxes. That was an almost depression. A deep recession-stagflation I think they called it.
I've always been fascinated by my grandmothers' stories and reading the dairies of the Great Depression. On the German side of the family, they fled Weimar Germany with literally small gold coins hidden to get past the bribable train guards.
Once German middle class Bankers worked on NYC docks (using some of that gold to get into the job) to pay for shelter-food and to get some others of the family out of Germany.
Our "History" stories of the Great Depression are mostly fables. A lot of real suffering, loss of homes and farms on the courthouse steps as bankers bought them protected by Sheriffs. Grapes of Wrath stuff, hunger and violence as folks struggled to survive day to day.
There was human kindness, but the nasty side of humanity was also there. Folks sold bad eggs and lime water as "Milk" as the diaries mentioned.
Today I suspect Blackrock will be in the courts, well protected (as they give great re-election funding to Congress critters) buying on the cheap "Distressed Tax properties".
Prior to the US getting into that "European Conflict" folks fought for the right to work in the Civilian Conservation Corps for cheap wages but Real Food and issued clothing.
When WW2 started up folks were eager to get a REAL JOB, with Real Meals and Clothing, but medical records of the era showed that many American men were not fit for service due to malnutrition and lack of basic dental care.
As Hemmingway said in "The sun also rises"
"How did you go broke?, slowly at first then all at once".
No empire ever survived inflating-devaluating the value of its money.
As much as I'd like a new to me bigger sailboat, that money is far better spent with some more stored food, funds to keep the TAX MAN away from my home and such.
I've been building out the food storage some more. Also picked up a food dehydrator. That should come in handy. My grandparents had some stories from back in the day. Lots of lessons.
DeleteBigger sailboat is also on the back burner.
Everybody always thinks that "this time it'll be different." Wouldn't that be amazing if it actually was this time around. Not holding my breath.
Economic hard times are followed by economic whoopies. If we're smart we'll survive, we've been through this before. The last time I got rid of all credit cards and refuse to ever own another. I found out you can live quite comfortably without one. I have a low fixed rate on my mortgage, that doesn't effect our tax situation however, and I am expecting some negative fall out tax wise, but that happens. It took me a bunch of years to recover the last time, this time I have things in place. I'm not a real frugal person, however I'm no miser either. Sort of in-between and cautious. If I don't have money stuff doesn't get done, and that's ok. It'll get done when things chill. The rest will fall into place when they need to.
ReplyDeleteInteresting times, that's for sure.
DeleteAlways find enough coin of the realm to pay Taxes.
ReplyDeleteLong after things stagger into depression the TAX man will get His.
Gov.com rule #1 Survive and expand.
Gov.com rule #2 see #1.
Tax men will be the last to go.
DeleteDidn't Shakespeare say something about killing all the lawyers, and tax collectors, or am I stretching it abit?
Delete