Why I’ll Never Rent Again And Neither Should You
A financial adviser by the name of Carl Richards wrote a perplexing post called, “How A Financial Pro Lost His House”. To summarize, Carl bought more house than he could afford and decided to strategically stop making his mortgage payments and turn the keys over to the bank when the house lost value. Gee, how unoriginal.
What is original is that Carl proceeded to write a book entitled “The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money” coming out in January, 2012. Hot dog! He’s planning on making even more money off the rest of us who already bailed him out. At least he shouldn’t call himself a “financial pro”. Maybe he can do the right thing and donate his book’s proceeds to charity, or pay back the debt he ran away from! Nahh.
In the securities industry, if you cheat your clients and do the unethical thing, you lose your license. In the financial advisory industry, if you do the same, I guess you get to write for the NY Times, get a book contract, and make more money!
CRY FOR ME READERS AND GIVE ME ALL YOUR MONEY
What makes Carl’s article so polarizing is that he tells us his story is unique, and tries to garner sympathy from readers for having to move back to Utah from Las Vegas. Thousands of people have lost their homes Carl. You are only unique because you think you’re a financial pro and actually make money off of people for financial advice. He writes, “We love where we live now. Still, there are consequences. We lost our home. It’s not clear when we’ll be in a position to become homeowners again.” You better not dare get a home loan again after making the bank, and ultimately taxpayers foot your bill!
Carl took out a 100% loan, and then took out a home equity line of credit to live an even more extravagant lifestyle. So when he talks about “losing his home”, it’s a farce because it was never his to begin with. Now do you understand what happens when you have no skin in the game and pay no federal taxes? Essentially, Carl lived in a 3,800 square foot McMansion for years for FREE. It would be one thing if he put down 20-30%, and then lost his home. It would be another thing if he put 20% down, lost his home, and kept mum about it. But to put 0% down and lose his home is not losing his home!
Even more perplexing is that he writes how good he’s doing now. ”As for Cori and me, things are much better now. Moving back to Utah clearly was the right choice. The business is doing well, and we’ve managed to pay down most of our debt. It would be easy to say that we’ve learned our lesson, that we’ll never screw up again.”
In other words, he’s back to making more money off people who listen to him for financial advice, even though he was highly irresponsible with his money. Nowhere in the article does he write how he’s looking to pay his bank back for welching on his loan or doing anything to give back to the community. If the Carls of the world did not exist, the financial collapse and the loss of billions in retirement assets might have been prevented. Thanks buddy!
WHY GETTING AHEAD IS SO EASY TODAY
If you are a financial adviser who decides to take out a 100% loan and screw the bank and the taxpaying public, you do not deserve to be a financial adviser anymore. Your credentials should be stripped from you, just like how a convicted insider trader should be forever banned from working in the financial services industry.
After reading this article, why on earth would you ever rent? I sure as hell will never rent again. You can still borrow a ton of money from banks, live it up for years, and if you find yourself not wanting to pay, all you have to do is not pay, especially if you live in a non-recourse state!
The only consequence is a temporary hit to your credit score. But who cares? It comes back in several years. It’s not like you’re getting thrown in jail or jabbed in the eyes with 10-inch long needles. In fact, the government wants to help you out as much as possible. You can even make $50,000 a year for free from the government if you buy a home and can’t afford it!
Carl gets to write for the NY Times, promote his book, and earn money from dishing out money advice again. Isn’t America great?
Recommendations For Protecting Your Assets And Saving Money
* Check Your Credit Score: Take a moment to check your free TransUnion credit score through GoFreeCredit.com, a company I trust. 30% of credit reports have errors, which could put a serious hamper on your refinancing or new loan borrowing abilities. I had a $8 late payment I didn’t even know I owed crush my score by 100 points come up during my last refinance! The average credit score for rejected mortgage borrowers has risen to 722 due to more stringent lending requirements. Do you know what your score is? If you don’t want the credit monitoring service, simply cancel before the grace period is up.
* Make sure you refinance your mortgage. If you haven’t refinanced your mortgage in the past 6-12 months, I strongly suggest you at least check the latest rates online with Quicken Loans, the largest online mortgage retailer. They were founded by Dan Gilbert, also owner of the Cleveland Cavaliers. Because they have the largest online network, they can provide the lowest rates. They also seem more streamlined in the refinancing process than traditional bricks and mortar banks as well. Interest rates are at all time lows and won’t stay this low forever. My latest refinance was for a 5/1 jumbo ARM at 2.625% from 3.125%. Rates are ticking up due to the end of quantitative easing as of 4q2013. Might as well check because it’s free and there’s no obligation.
* Get the best home insurance possible. In order for your property to grow in value you must protect your property from damage. Fires, floods, leaks, theft, and other accidents happen all the time. If you have cut-rate insurance, you could very well pay way more than you should. I highly recommend checking with USInsurance.com online to find the best home insurance rates. They have a huge network of providers that will compete against each other to provide the most tailored home insurance coverage possible that is affordable. Mobile home insurance, renters insurance, condo insurance, and homeowners insurance are just a few of the options based on the type of home in which you reside. Leverage the internet to save money and protect your largest asset.
Photo: Happy Raccoon, PD.