I know how they can steal my finacials, but what I haven't figured out is how they steal my paid for real estate. Other than raising property taxes so high I can't pay them and eat too. Yes I know what inflation can do - the question is how they can kick me out of my house.
Any ideas?

dilbert dogbert...

Do you have a job? Is your job recession proof? If you are retired, are your pensions & retirement income 100% safe? Untouchable by market forces or gov't? If so you are lucky - few are.

If you don't need a job, or customers, or clients to support your lifestyle... and your debt load is small or managable even in a decline and the taxes aren't too severe nor likely to become severe... and your health is good and you have insurance that can't be easily revoked if your emploter goes BK... then no one can 'kick' you out... even if the home is valued at nothing and your income is almost nothing... you can stay as long as you want... probably.

The trouble is a lot of people who think their debt is managable and everything is okay will find out it isn't... and the threats could come from income decline as much from asset valuation decline... attack either position even if thought to be well defended.

A few weeks back CR ran a series on what a RE crash might do to the overall economy... not pretty. Possible effects can be far from the direct RE associated sectors... manufacturing, financial services, consumer spending related activities... even gov't. Take that much wealth out and who knows what falls with it...

I had this same talk with my in-laws one of which is a doctor, their property is not heavily leveraged relative to their income but they have debt. She says there is no way a doctor will ever be effected unless they borrow too much... after all they have a guaranteed income stream... right? People always get sick.

I told her NOTHING except death and taxes are guaranteed and I'm not even sure about taxes... and that while people always get sick they may or may not be able to pay for the treatment. There are two factors to 'demand'... (1) desire for the product/service (2) ability to pay for the product/service.

Even the health care sector could implode if the economy gets bad enough... I mean somebody pays the premiums that pays for the policies all these people have who show up at her clinic... damn few pay for her services 'out of pocket'... and in a recession even fewer will have policies or be able to pay out of pocket. Then what?

So can she still live in her lakefront home making 50% or less than she makes now? Can she live in her lakefront home if she is paid what doctors are paid in Canada or Europe? Her reply was - 'no'... at that level her managable debt becomes unmanagable.

Now that is an extreme case... one not likely to happen. But there are a whole lot of other people closer to the edge yet who do not know just how close to the edge they are... how severely their income might be effected if we have a severe RE crash related recession... and also how far the value of their assets might fall in such a scenario (all assets too - stocks, bonds, RE... all of it). No one knows.

So Dil Dog if you manage your assets well and are far removed from the effects of any RE crash, you