Talk about blowing an opportunity, according to the article,they had 290k in savings when they decided to lay down their bets. Buying a 1.5 million dollar pad and a 700k rental on 150k income with 8 mouths to feed and insure is a gamble, it makes no long term sense, it’s purely a speculative play, The rental would probably yield 2k a month on a 5k mortgage so the only reason to do that was an appreciation gamble. Had they been reading piggington instead of shopping for pizza ovens, they would be rolling in money right now.
Let’s say they went piggington circa 2006, started dabbling on the boards, reading financial fundamentals, more than likely they would have found a 2k a month rental, hoarded cash for the reckoning and would be out shopping right now for either a ranch in the 600k market (borrowing about 300k) or just paying cash for a 5 br, 3000+ sq ft tract mcmansion, hell they could have bought it last year for less than 300k.
When I was married years ago and had only two kids to feed, we made about 15k a month combined and took out a mortgage for about 250k that caused me not to sleep for a week, all the while playing the “what if” game in my mind. It took about three months for my blood pressure to return to normal. If I had borrowed that kind of money with that amount of kids on that salary, the only uncertainty would be which would happen first, would I have a heart attack in the esrow office or burst into flames. What did Ben Franklin say about a fool and his money?
