Vlog #89: One of the biggest things in life that I fear is debt.
So now I understand why you don't want to get a mortgage to buy a house!
When Bianca spoke those words to me this week I was so happy.
It's like everything came together Crypto, debt, house.
One of the biggest things in life that I fear is debt.
I don't mean the kind where you lend 10 bucks from a friend to buy a round of beers. But the one that enslaves you for a while.
The mortgage.
I used to be like everyone else. Thinking a mortgage to be an honest way to buy a house.
This all changed when I learned how the money for the mortgage is created.
It's so simple that when I try to explain it to people they usually don't believe me.
It works like this:
The moment you sign the mortgage the money for that loan is created out of thin air by the bank. It never existed before, they didn't have it, it's not money from other depositors. It's new money created by the bank.
The loan is based on your ability to create value over a certain amount of time (aka work) in the real world.
But in case you fail to pay (let's say you get sick) the bank can still sell the house that you bought with the money they never had in the first place.
But in case you don't get sick and be a good lender they still have the audacity to charge interest over the loan (money) they created out of thin air.
You what now? yes, I know. It just doesn't sit right with me.
It's an honest way for the debtor but not for the lender is it?
Cryptocurrencies can't be created like this. That's why I like them so much. It's freedom.
I talk about it more in my vlog.
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I thought it was all over when we had some green yesterday but the downtrend is back again. One huge benefit I have had is that I've been able to scoop up some EOS at $0.80. I thought it would never drop below $1.50 but I guess if you are patient enough opportunities will arise.
I don't think I'll ever be able to buy a house in my life and I really don't want to get a mortgage. When you do get a mortgage it is true, someone hasn't really bought the house and it is on loan. I think with something as big as a mortgage comes huge financial pressures and it isn't a risk I'm willing to take.
Houses cost way too much in the UK so I'll probably be hopping around rented properties from the rest of my life which may cause some financial issues later on in my life but I won't have to fork hundreds of thousands of pounds (which I don't have) and give it to the banks.
Banks just creates it purely out of thin air and this system based on debt benefits no one expects for the banks and that is why they are so inclined to holding on to it rather than moving to something more distributed and equal such as bitcoin.
All this does is hurt us normal citizens as everything gets inflated in price and the value of fiat depreciates. It disgusts me how everything is based off debt and interest which really is unfair and we are like cattle being farmed.
At least people are waking up and realising how this is a terribly unjust system and we can start using crypto in the future where money is not created from a few numbers being generated. I think people are naive or are just purely trying to scaremonger when people say ' crypto is leading to all this criminal activity ' when regimes are being funded with USD.
Let's see if we will see this revolution in our lifetime but they may not be the case @exyle
You know, it isn't such a bad thing to rent for your whole life. Even if we "own" homes, we don't take them with us when we die, so is it that different from a rental that you can comfortably inhabit?
Of course, you can't pass on a rental to your kids... but you can pass on all that saved money, and they can buy or rent as they'd like. I'm with you, and @exyle, and everybody else in the thread espousing this idea - NO WAY, NO MORTGAGE!
bitter truth we dont take them with us when we die *
This is one of the reasons why I joined Steemit. It provided me with a good intro about cryptos, blockchain... And this has allowed me to buy other cryptos like ETH.
While the bank is taking its share for my loan, I am planning to repay them before time to not lose to interest.
But the sacrifice required is getting bigger day by day with that beast called inflation
I love how steemit is acting as a stepping stone for people into the cryptoworld
Inflation is constantly going to consume the world as we keep printing money and creating it out of thin air giving this false valuations
Ethereum coins are created also out of pure air. Pay attention. Ethereum is very similar to current paper nation currencies.
BITCOIN is debt free
Great video, my bro! And highlights the dangers of getting involved in the dreaded "mortgage". I can think of two of my friends off the top of my head who are already up to their necks in debt. And you know what? They are absolutely happy with it and readily accept it for what it is. Very dangerous territory if you ask me.
I say that because from the moment you sign that piece of paper tying you up financially for X amount of years, nothing would make them happier than for you to default on that agreement. They would suddenly get a huge cash injection from that customers plight, rinse them dry and repeat the whole cycle once more to another pair of unsuspecting victims.
After all, they were the main instigators of the great economic downturn of 2007-2008. Doling out mortgages like there's no tomorrow, except the problem was the people back then declared themselves bankrupt instead. Now the checks are much more thorough so that if the same things happens now, you can bet they will recoup all the money back. And then some!
Well thought out and awesome vlog, yet again, bro! :)
I'm 29 years old and the idea of buying a house doesn't frighten me because it will be near impossible for me to ever buy a house despite having a middle class job. Im a structural engineer and make okay pay but based on other people's pay scale and with current home prices, starting a family with a wife and a single kid would require me to nearly double my pay just to be able to save enough to put a down payment on a house.
That says a lot about the job market (somehow employment is at 4.7% in the US and we cant seem to save anything).
So what do you do? I'm not sure to be honest... I ended up investing in crypto and stocks. What do you guys do with your money?
I ended up doing the same. But I no longer have stocks, only crypto.
Are you trading crypto with a long-term outlook, or is it purely trading for profit and moving into and out of positions?
I have done day trading and swing trading for profit, but it requires a lot of time and commitment, of which I don't really have given the nature of my day job. Most of money goes to crypto because I don't see saving it as useful right now.
In order to accumulate enough to buy a house, I'd have to work almost 15 years to be able to afford something in NYC. But investing in crypto, like any asset class is much risker than anything else.
Alternatively I could find a new job that pays more!
Long-term outlook. I buy and hold. I used to trade but it's like you said takes a lot of time and buy and hold has proven way more profitable for me.
I am fortunate to live in an area where home prices are still "reasonable", let's say. But yes the inflation in the economy has occured in assets like homes, so basically the baby boomers in the end obtained a large appreciation in their investment, but now with stagnant wages the next gen has nowhere to live. add this to nearly double digit yearly increase in education and healthcare many years and it means many family generations need to live together.
I definitely agree that incurring debt is a bad way to go. The process you just mentioned is one way money is created out of nowhere. It's called the fractional reserve system and it's a method of leveraging and multiplying money within the banking system.
We have a long way to go about informing.
Steemit and @exyle at its best.
It is frightening how the mortgage system works.
Keep on steemit!
Yes, the economy nowadays is a game where the biggest players set the rules themselves. It is really bullshit if you understand how it works and we already get ripped off by this scam for decennia. Now with decentralized systems like Bitcoin we can create our own fair game where the rules are set by free market forces. Join the revolution, educate yourself and get involved in cryptocurrencies! Stop playing their evil game!
Educating oneself is so important indeed!
well i think you are right the most obvious disadvantage of mortgage is that you are carrying an enormous debt over a long time. The other major drawback is that since the mortgage is secured on your property, you have to be able to keep up with your mortgage repayments or you could lose your home.
During the credit crunch, lenders worked hard at keeping even those struggling with the mortgage in their home. But if homeowners really can’t make the repayments, their home will be repossessed. The bank or building society will then sell it to recover their money.
Although the monthly amount you’re paying may seem reasonable, the total amount you pay back over the years is huge. For example, someone who borrowed $160,000 over a 25-year term would repay $280,600 in total once interest is added on! (This assumes the rate of interest averages 5% over the term.)
Good morning @exyle
Thanks for today's insight and real world examples as to why crypto is the place to be long term. I never wished to buy a house, and pay almost double for it, giving the mortgage company (bank) something like 75% of the total value in interest. The system is a joke.
Crypto is the new ladder to replace property i hope!
Have a good afternoon
Asher
p.s. bought 265 Steem this morning at around $1.06 :)
Congrats on your buy!
Looks like i caught the dip quite well! Still possibilities of further lows but i suspect many would like to collect some Steem under a dollar so we shall see :)
Banks have enslaved people for a long time. The evils of central banks do the same with banks either by enabling then or restricting them. After mortgages are created, they are bundled with other mortgages and sold as an asset to investors. The banks create an asset out of nothing and sell it? Total fraud!
You are wise not to play the game! If projections hold true, in a few years you will be able to buy a house with a bitcoin or two.
I'm banking on crypto indeed :)