Buying a Porsche with House Money
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Sure, wages are going up in Calgary and there some pretty good value in stock options for those of us in the oil and gas business, but the cost of living is also going up tremendously. As an individual in the HR field, I have a pretty good idea of what people are earning out there and there is no way that the number of people buying these big ticket items is in line with wages. Even at $100,000+ in salary (or double that for the double income no kids crowd), most of these young people would still be struggling to live here while buying these items at the same time. The only way I can figure it is working is via debt tied to skyrocketing home prices.
Many properties in Calgary have double in the last year. This makes it SUPER easy to go an get a LOC against the house. In know because my bank called me and asked me if I wanted one. These things are being bought using borrowed money, and I think that anyone with a head on their shoulders knows what that means. Frankly, it scares the sh!& out of me. What happens when it bursts? Not a position I want to put my family in, that is for sure. Anyway, I know this seems like just another doom and gloom article about the economy, but I really believe that this “trend” will come around and bite some of these people. What is more important to me is socking away money so that I earn more passively and enjoy life with my kids – hence my dividend investment strategy.
But at least they will have had a Porsche.
5 Comments on this post
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Tyler said:
You are right on the money sir!
Cash flow is king.
Maybe you can buy one of the Porsche’s that get repo’s with your dividend checks when the “House of Cards” comes tumbling down.
Discipline + Cashflow = WealthSeptember 29th, 2006 at 2:09 pm -
cdntrader said:
Rather havea nicely loaded Subaru Outback myself.
September 29th, 2006 at 8:26 pm -
skidmark997 said:
I’m from the UK and found your blog having googled “porsche blogs.” I think the attitude to money in Europe is very different to you, our cousins across the pond. I travel to the US and Canada regularly and I’m amazed by the finance deals and zero percent options offered by retailers to consumers. I’m guessing that most people look in the short term and think “hey, those monthly payments are low, let’s have two!” Yes, we in the UK borrow lots of money to buy houses but generally we save for everything else. I’ve got a Porsche and I saved up for mine. I don’t have any credit card debt or loans. You might consider that I have a sensible approach to my finances but to be honest anyone who spends £80K on a Porsche has no sense with money whatsoever. My argument : You’re a long time dead and when I’m wheezing my last breath in the nursing home, I won’t be thinking “wasnt that car a waste of money.” PL
October 4th, 2006 at 3:45 pm -
Tom Allen said:
Considering that buying a house is likely to be the single biggest financial undertaking that most individuals will make in their lives, it always amazes me that a lot of people don’t have a better understanding of the mortgage and real estate industries.
Any information like what you give here that can inform people and help them to make better decisions for themselves is a good thing. I run a mortgage information site myself and I always try to help.
July 16th, 2007 at 1:58 pm
[...] We’re getting really low on funds. Hopefully we’ll be able to buy a home with zero down payment in Oregon. And once lots of people start moving to Oregon, the property value of our home will skyrocket, and we’ll take out a HELOC and buy a Porsche if they’ve been invented by then. [...]