We’re A Nation of Suckers

It takes a long time to get through this blog post, by some dude named Jonathan on blogger.com, but it was worth it.  The writer is from Ireland, and, interestingly, he’s also a disillusioned former mortgage broker. 

Jonathan went through a period of credit-card debt in his 20s that taught him a lesson.

A wise and successful man made a comment to me once that has stuck out in my mind ever since. He told me there is one major difference between the wealthy and the destitute. “Rich people earn interest,” he said with a smirk. “Poor people pay it.”

Lots of people got rich during the real estate run-up — and, with a few exceptions, it wasn’t the people who bought homes.  The agents who sold homes, the lenders who sold mortgages, the appraisers, the escrow companies — they made a fortune by preying on people’s desire to look and be rich. 

The problem was, those people didn’t understand that debt is never the road to wealth.

The average American Jane and John Doe are completely financially illiterate. They treat credit like it was money in the bank and measure their ability to purchase big ticket items on the size of the lowest possible monthly payment, rather than the ultimate long term cost. The American Dream of home ownership is becoming a nightmare as countless “homeowners” realize just how badly they were screwed by the “nice Realtor they met at the cocktail party.”

The fact that your average Joe is clueless about personal finance is no accident – it is that way by design. The controlling upper class – the people that actually own everything – are on an endless mission to further entrench their status and create a deeper divide between the classes. The more financial illiteracy, the more secure they become.

The real estate boom, it turns out, was nothing more than a massive Ponzi scheme, where the people who got in at the beginning, and the people managing the scheme (i.e., lenders, agents, etc.), were the ones who made money.  Those who got in late — the millions of 2005/2006 buyers — got royally screwed.

If you were one of the lucky ones that timed the market, got out at the top and are renting through this collapse then you are one of the few beneficiaries of this economic disaster – which will likely spill more historian’s ink than the Great Depression.

Fortunately, financial dolts can reform themselves by simply refusing to play along — by hoarding their money, managing their debt and enjoying the simple, low-stress lifestyle that comes with living within your means.

But who’s going to tell them?

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