Quote:
Originally Posted by SilentKnight
Generally speaking...you may be right.
Although...
In the 70s my aunt and uncle made it big when the ceramic fad was the 'pet rock' of the era. They started small - teaching classes in a spare room in their farmhouse. Within a few years they expanded to a modest store in a commercial plaza...then opened a large store and distribution warehouse in Toronto. They built a multi-million dollar business out of it, one of the largest in Canada at the time. They sold kilns, greenware, finished ceramic pieces...the works. They even opened a coast-to-coast catalog service.
Along with it, they bought a luxury condo, a huge yacht, luxury car...lavish vacations. They lived high on the hog - demonstrating to the rest of the family just how 'successful' they were.
Trouble was - while they were living the grandiose lifestyle - they failed to realize ceramics was a short-lived fad. Demand died off, creditors came knocking...the business tanked. Yacht was sold, along with the condo...the car.
Sure, they worked hard and took risks and gambles. But they never saw the crash coming before it was too late.
Moral to the story - don't bank too heavily on a fad.
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That happens to a lot of people from the poor to the rich. On the rich side of things I saw a story a while back about a guy who worked for a Wall Street hedge fund for several years then left it, moved to Florida and started his own fund. For a few years it did fantastic. They bought a big house, he had a membership at the local country club and golf course and they blew through money. Then the housing collapse hit and with it his business was destroyed.
At the time of the story they were in foreclosure and he was working as a delivery driver for Dominos so he could make enough money that the family would be able to move into a small apartment when the foreclosure went through.
On the lower side of things I know a lot of people who spend every dime they make. Right now my brother and a friend of mine are both in the same situation. They both make about $100K a year and both have daughters that are juniors in high school and want to go to college. Both can't understand why their kids to qualify for financial aid/need based grants. They both say the same thing, "I know I make a good living, but I have a lot of bills so the money is gone." It is because they live in expensive houses, have cars that they are financing, my friend has a time share and they pay for crap they don't even use like they both have every cable channel you can get even though they both admit to not watching it very much. I point out to them that they make twice the average household income and they still think that bills and expenses should be taken into consideration.