A couple weeks ago, we found out our friend's cancer that has been in remission for around five years, has metastasized and spread into the lungs. Tonight, my wife got a message from a woman who she considers her second mother, that her cancer has returned with a vengeance also and she is sending her goodbyes to those closest to her. For my wife, this is bringing up her past of losing her brother-in-law, for me, my mother - at this rate, it is not shaping up to be the most festive of seasons.
Cancer doesn't give AF about whether you look after yourself these days or not - it just indiscriminately rains firehose misery on pretty much everyone. But, I don't think that is a very good excuse to not look after oneself - though I suspect that many take the "gotta die of something" approach to life these days.
I actually think that this is one of the reasons that so many people get into so much debt, as there is a an attitude of "what's a little more, it doesn't matter anyway". For instance, I was reading an article on mortgage debt from Australia and while the average debt to yearly income ratio was 2.5 30 years ago, it is now over 6. That is an incredible shift and while interest rates are at "record lows", there is only one way they are going to go and when they do - it is going to be apocalyptic for those who have extended to their range.
The mortgage is a big thing of course, but rising interest rates are coupled by rapidly increasing inflation on core items like fuel and groceries, and people are very rapidly having to decide whether they get to work, or eat. Then, because many are simultaneously holding other debt obligations like BNPL and credit cards, and suddenly they have more going out than coming in by a fair margin - soon, defaults start happening, collectors are on the march and people are struggling heavily to make ends meet.
I think a lot of people have become quite blasé about taking on debt and managing their finances at all, with many falling "victim" to the media-driven FOMO and very short memories. Perhaps it is an age thing, but I remember the recessions of the early 90s and I was only a kid, so why don't people remember the GFC from 2008? Did it just pass by them in the background while they were filling their feeds with selfies and pictures of their overpriced salads and vitamin-infused smoothies?
While there are many reasons for the increases in housing prices, it is still dictated by supply and demand and if buyers are willing to pay exorbitant amounts, sellers will be willing to sell. And, those who have been able to buy low and sell high, are now just waiting for their buyback in at the next low, and I don't think they are going to have to wait very long.
With the confluence of all of the streams of economic pressure coming together, many people are going to be forced into selling assets to service their debt obligations. This means that since they won't want to get rid of their house immediately, there will likely be a stock selloff for those who have some, while the people who don't will start the coordinated collapse in house prices. Then, once the near-liquid assets are depleted, the next phase of real-estate sales will begin and those with the means, will *still be biding their time - waiting for the bottom. That way, they can rebuy what they have already sold at the top for around a third of the price, after already making 100% on it over the last decade. This isn't their first rodeo.
A similar thing happened back in 2008 with many investors able to snap up bargains that have since increased rapidly in price as people have been more comfortable taking on more debt to get their "dream" home, or that holiday they "so deserve".
As said, think the attitude of gotta die of something is relevant here, as it is an indicator of the inability to predict what dying of something like cancer actually feels like, or what it feels like to be so burdened with debt that one has to make decisions about whether to eat or not. But, we aren't actually that good at learning from others, which means we have to make the same mistakes as they did in the past for us to realize our own folly - but of course by then, we will have forgotten out own role in what has led us here and instead, find someone to blame for our poor condition.
Maybe we can't do much about whether we get cancer or not, but when it comes to our financial wellbeing, we can at least heavily influence the outcome. Do you know what is worse than being very ill? Being very ill and drowning in debt.
Money might be cheap now - but the true cost is paid in the future.
There are many ways to die...
Maybe the number one cause in the future is going to be, from debt.
A "mortgage" is well-named.
Taraz
[ Gen1: Hive ]
