Quote:
Originally Posted by Rochard
I've often mentioned my friends here - they bought a house they couldn't really afford, and then when prices of houses shot up they took money out and bought all kinds of toys. I mean, between the two of them they barely cleared $100k (she was a cashier at a big box store), yet they had a boat, a jeep, jet skis, ATVs, a HUGE expensive pick up truck, and always had the most recent iPhones.
When the recession hit he lost his job, more than half of their income, and they lost their house and everything else. They ended up renting a house, he got job again, and they started spending again. A new motorcycle, new Corvette (used really) new ATVs.... Really?
Guess what. Seems they can no longer afford their lifestyle. They are selling everything again, and this time most of their furniture including their huge pool table.
Whatever.
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I had an aunt and uncle who did much the same. In the late 70s they were on the ground floor of the ceramic hobby fad - they started a small business from their rural home that quickly swelled into one of the largest ceramic dealerships in Canada. Along with it, they began their spending spree - they bought a yacht, a posh luxury condo in Toronto, luxury car...exotic vacations, all the toys. They lived high-on-the-hog - never realizing the ceramic hobby craze was just a fad that died out after a decade or so.
And then the creditors came knockin'.
Meanwhile, they were stuck with payments on things they could no longer afford - and had to liquidate at fire sale prices. They stiffed a few suppliers and eventually disappeared out of the country for a while - meanwhile court bailiffs were serving papers on their remaining holdings and trying to track them down.
They never thought to set aside a nest egg - but just rode the wave crest until it was too late.