In this downward economic cycle, where everything that can go wrong is going wrong, maybe it’s better to own nothing.
Last year at this time, I was talking to a friend of mine who has run into some bad luck in his career. John was down and out because he was middle aged without owning a home or having any money saved for retirement. The only thing he owned was the shirt on his back. I tried to cheer him up but was little help. The only good thing that I could come up with was – “if the market tanks, at least you won’t lose anything”. He agreed with me but reminded me that he wouldn’t gain anything either.
After nine months into this global economy slowdown – with no end in sight – John has not lost a thing. It fact, he has gained a house because the neighbor to the house John was renting could no longer pay for the house and John was able to work out a deal to take over the mortgage payments. Now John is looking for a car and low and behold the auto industry is just about giving them away.
John is in a great position to get a newer automobile at a very good price. In fact, it turns out that John has a very good credit record compared to most people applying for an auto loan. John doesn’t have a home equity loan because he didn’t own a home and he doesn’t have a prior auto loan because he couldn’t afford a newer vehicle. John owns nothing, yet he is the most qualified person in America to purchase a brand new vehicle – go figure.
Here is my idea: perhaps congress should create a new economy stimulus plan to boost the economy by issuing new cars to everyone that doesn’t have one!
As the stock market sinks, the rich are losing billions while John is moving into the middle class. In a little over a year, John has taken advantage of opportunities that have drastically improved his financial outlook. Perhaps, sometime it's better to be poor.