Wealth Built on Debt, How Is That?

My high school classmate was back recently from the United States. She invited me for chit chat the other week. We were so pleased to see each other, both saying that not much really changed except for some grey hair and additional pounds on her end and less on mine. She's been a U.S. resident for almost 10 years now.

Between sips of our favorite coffee drinks, she announced that she and the husband was planning to move back to the country. She's been displaying the symptoms of a hypertensive and would not want to exacerbate the condition. One reason she says, is her home mortgage. The possibility of a foreclosure seems inevitable. At this point, her initial happy aura slowly turned to gloom.

Two to three years ago she was on a roll. She was heavy into investments, buying a new car even when the old ones were still usable, buying a new home, travels, signing up with 2-3 credit card companies. Only because her co-teachers in a California middle school were doing it. Suddenly, "I was into heavy debt-financed investments without me knowing why", she said sadly.

I have not seen my friend this devastated before. She is a winner this woman, a chemistry college professor in one of the top universities around, with consulting work on the side to boot, I was surprised to find out that her vacation to the United States one summer became a permanent thing.

Those were the good times, she intimated. Credit was accessible, interest rates were manageable that not to avail it, illicited "whats? and hellos?" from the rest of her co-workers. She admitted being on a buying spree. Heady and irresponsible, she was swayed by the seduction of the consumerists. She was splurging. Not because her income significantly improved - it was just there was this open availability of home and credit financing that led her into the mess she is in right now.

"So what's your plan now?" I asked.

'Not sure', calmly she said, "I thought I understood everything. I failed to understand the exact implication of taking on what was definitely not within my financial capacity. I wanted wealth but fell into debt and now foreclosure." :-(

I could only feel for her desolation.