Thursday, February 28, 2008

$100,000 has become Trivial

We watch the “Flip this House” TV shows with amusement and concern. A typical show has an inexperienced, young person remodeling a house for a month by painting the walls, adding granite countertops, replacing carpet, and netting $100,000. The house flipper uses credit to “buy” the house and their goal is to resell it before their first mortgage payment is due. If they miss, they are down the mortgage each month (cutting into their net profit) until it sells. But in these shows they usually sell the house effortlessly (unless they are losers) and come away smiling with $100,000 or more for their month of effort. These stories create a reality that $100,000 can be made effortlessly in a short time. Since there is no money down, and minimal money invested in the improvements, the only risk to the house flipper is an impact to their credit score, which they may not care about anyway.

We've slaved for every $10,000 we’ve saved over the past 30 years of employment. To us, one hundred thousand dollars is a very large amount of money. How is it that this amount of money has come to be so trivial? How did hundreds of thousands of dollars of debt come to represent just a few house flips to pay off?

2 comments:

kim said...

Also this Tv shows are very populars in Spain. Global world has bad TV around the world.

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