29 September 2008

The Bailout

The Volokh Conspiracy - -

My finance friends are stressing to me that something needs to be done.  But in my gut, I'm against this bailout.  I'm a firm capitalist.  I believe in creative destruction. 

I remember when I was buying my Co-op in NYC, and my broker telling me that I could afford much more than I thought.  I told him that I didn't want to be in a spot where I was maxed out, I needed something that gave me some breathing room.  He told me that I could never find what I wanted in the price range that I was looking in.  And when I found a place that was perfect, and a FSBO, he was pissed.  "Why didn't you bring me in on the transaction?" he whined.  "It was an owner sale, no brokers involved.  Nothing to pull you in to."

I've got nothing in the stock market, except my pension, but that's years and years away.  And I don't control what stocks are invested anyway.  I've got a house on LI, it's lost value but I'm still ahead of the game.

I bought my first house in 1994, with a $5,000 down payment for a $105,000 house.  I remember my pastor telling me, "You're a lot braver than me" but it didn't seem like too much of a risk back then.  Even though I had marginal tenants, I still had enough to keep up the mortgage.  I bought 2 more house between 95-97, then I did missionary work in my time off rather than real estate, and my investments stalled.  In 2003 I decided to relocate to NYC and it took me quite awhile to sell two properties and raise the down payment.  But in 2005 I had the money in hand, decided to waste the capital gains tax and take the money home rather than try a risky "exchange" which would have saved me the capital gains.  I bought this place, and am satisfied with my decision, especially nowadays. with what's going on.

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