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Getting ahead by getting in over your head

people who buy houses they can't afford

Apparently, the best way to build wealth is to go into massive debt.

“You know, you really should consider buying a house,” said my friend, Wayne, as he looked around my dismal apartment, his lips curled in a condescending sneer. “Now is a terrific time to buy.”

“Really?” I said, settling across from him on my grungy couch. “Right now? You mean when inventory is depleted and prices are sky-high? Yeah, it sounds like an ideal time to pour all my hard-earned money into a ramshackle hovel. When was the last time I heard this advice? Early 2008?”

Wayne sniffed. “This time it’s different. Home prices can never go down. You don’t want to get left behind.”

“Take a look at my apartment,” I said. “I’ve already been left behind. I couldn’t buy a house in the aftermath of the recession because I had a low-paying job. And now that I have a better job, home prices have surged to outpace wages. I can’t win.”

“You’ll never learn,” Wayne said. “The only way to make it in life is to buy and sell houses. That’s the key. The only people who get ahead are the ones who buy homes.”

“Huh. I always thought the way to get ahead was to save your money and live below your means.”

Wayne laughed out loud. “Seriously? And where has that gotten you?”

I glanced around my dismal apartment. “Not far, I suppose.”

“That’s exactly right. Working hard and saving money are probably the stupidest things you can do. When you live below your means, you’re not living. That’s why you’re supposed to buy a house and borrow against the equity. How do you think people have RVs and ATVs and brand-new cars? They’re not working hard and saving the money, I can tell you that.”

“I believe it,” I said. “People don’t seem to have to work anymore. Everyone’s just rich for no reason.”

“It’s not for no reason,” Wayne said. “They’re rich because they live in enormous houses with rising values. You should take some notes. Like I said, now is a terrific time to buy.”

“People always say it’s a terrific time to buy,” I said. “When the market’s up, it’s a terrific time to buy. When the market’s down, it’s a terrific time to buy. When a zombie apocalypse hits the planet, it’s a terrific time to buy.”

“Actually,” Wayne said, “that would be an amazing time to buy. You could get in early when the prices were down. You’d just have to hose out the guts and rotting flesh.”

“Well, tell you what,” I said. “I’ll make you a deal. If a zombie apocalypse hits the planet, then maybe — just maybe — I’ll consider buying a house.”

“If you do, check out mine,” Wayne said. “I’m listing it for sale, and I’m looking for a buyer. I’m trying to move up.” 

“Move up?” I said. “And you want to use me as your stepladder?” 

He shrugged. “What can I say? If you knew anything about making money, you would have bought a house you couldn’t afford a long time ago.” 

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