Tuesday, August 14, 2007

Lesson learned: Don't buy stuff you can't afford.

When reading the news today, I came across this article about the people at the Florida Trailer Park who were promised between $500K to $1Mill by a development company for waterfront, trailer-home property. Yes, trailer-home lots were being sold for up to $1,000,000 a piece. But the deal fell through and the people there have found themselves in financial trouble. Why? Because in anticipation of getting that "promised" money, many of them bought boats and cars and houses. Someone should have shown them the SNL Skit: Don't Buy Stuff You Can't Afford.

I really enjoyed that Saturday Night Live skit with Steve Martin called Saturday Night Live: Don't Buy Stuff You Can't Afford

Here's an excerpt from the article:

Millionaire hopefuls' cash gone with breeze
BRINY BREEZES, Fla. — Who wants to be a millionaire?
Never mind.
That's the come-on, and ultimate torment, recently served up to Briny Breezes, a 43-acre mobile home community on Florida's Gold Coast.
In January, Ocean Land Investments of Boca Raton agreed to pay Briny trailer owners $510 million for their oceanfront property, a defiantly unpretentious middle-class oasis wedged amid mansions, high-priced condominiums and opulent hotels.
Ocean Land planned a development featuring 900 condos, a 349-room hotel, a marina and 300 time shares, including several 15-story buildings. Owners of each of the 488 trailers, many of whom paid less than $50,000 for their units and the lots they occupy, stood to make an average of slightly more than $1 million. Briny's 1,100 inhabitants were instant celebrities. Trailer park millionaires.
But two weeks ago, Ocean Land, facing an Aug. 10 deadline to pay the rest of a $5 million non-refundable deposit (it had put down $500,000) asked for a 45-day extension to talk to nearby towns opposed to the project.
Briny's board of directors refused, and the deal is off.
Okay, here is what I've learned:

1. Credit is really not your friend. It's a great tool when you can guarantee future earnings -- which really most people can not.

2. Don't spend money you don't have.

3. If someone wants to make an outrageous deal with you, do it quickly, take the money and run.

4. Don't buy trucks, cars, boats and other depreciating objects unless you have the million dollars in an interest bearing account or investments that allow you buy such objects with the interest not the actual principal.

5. Rule 3 and 4 is moot if you follow rule 2! Don't spend money you don't have.


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