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darkmarket

How a Financial Pro Lost His House

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http://www.nytimes.com/2011/11/09/business/how-a-financial-pro-lost-his-house.html

Tldr: Financial planner goes against all advice he's trained to give, loses his McMansion. Lesson learned: not to be too judgemental about others who make mistakes.

"I felt we could afford around $350,000.

...We ended up buying the house and paid the asking price of $575,000.

...We borrowed 100 percent of the purchase price. In fact, I was told I could borrow even more if I wanted.

...It was extravagant, but it seemed modest compared to what some of our neighbors were doing.

...This isn’t the place to explain the causes of the economic slump, and I’m not the guy to do it."

Interesting in relation to the psychological factors behind bad financial decisions, touching on the tension between homo economicus and behavioural economics, which perhaps does a better job of explaining the forces behind consumption.

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