Friday, October 19, 2012

Barefoot's Advice

From the BareFoot Investor email:

"You say that it's not good to be in too much debt. That makes a lot of sense to me, because I have two properties and I've just had a baby and I am in a huge amount of debt ... and ..."

And that was all she could get out before she started sobbing uncontrollably.

Turns out she works as an analyst at a major financial institution, and earns around $120,000 a year (i.e. she's not dumb, because dumb people generally don't earn six figures.)  Turns out she went to one of those property-flogging seminars I'm always warning you about - and ended up drawing the equity out of her home and buying a two-bedroom apartment in the currently deodorised armpit of Brisbane, for $490,000. Turns out that, after she signed the contract and bought the joint, she discovered she was pregnant. She wasn't in a committed relationship, but she'd made a commitment to her unborn child. She recognised that the financial stress was a danger to her pregnancy, so she decided to sell the property.

And guess what her half-a-million-buck apartment got passed in for at auction earlier this year?  $250,000.

This young woman is all alone. She has a two-month-old baby. She's scared about their future. And there's no fairytale ending coming her way. Despite improving property conditions, she's been stitched up good and proper.

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