Wow, it’s great to see my first guest post ever go live! I’m going to be missing in action most of the weekend starting this afternoon, but I plan to squeeze in some time to respond to all the comments.

“You should take all your money out of stocks and put it someplace safe.”

LOL

a classic one. Being in the PF culture, I have heard it all.

@ Ron, that’s a good tip about asking if they’re following their own advice. I guess if the answer is no, you can simply tell them to try it and let you know how it goes. But if you know it’s a bad idea, should you tell them not to do it? Hmmm…

@ Moneymonk, all the time I hear people talking about stocks being risky, but I think these people have never owned or even researched any stocks themselves. Someone hears about Enron, and that puts a stigma on the entire asset class of stocks.

Ian, I like the phrase “pub talk.” Hearsay and rumor from non-experts who’ve had too much to drink–who doesn’t see a problem there? Having a list of experts you can refer people to is a good idea. You can also use these experts to create your mastermind group.

Plouffey, that’s strange that someone got mad at you for that. I could see someone disagreeing with you about it, but why do you think they got mad? I think ARMs are usually a better deal than fixed rate mortgages, but anytime you can only afford a property with a certain type of mortgage, that’s a sign that it’s way too expensive. Glad to hear you didn’t overextend yourself.

I just spoke to one of my pals who didn’t give me unwanted advice but was taking drastically stupid steps in his life ( i think 🙂 ).

He is a design engineer by profession and six months back he was promoted to a project leader position where he had to make money out of the project for his firm. He was excellent at his work but did not know what managing a team was and has made many a professional mistakes which are eventually gong to backfire on him.

Now he is not bothered about the outcome and he says i don’t care if they fire me (he is actually hoping they do it). When I ask how is he going to service the loan he took a couple of months back he says he has many ideas which can bring him the money . A little more probing told me that those plans were not feasible at least in the short term but he was willing to take the risk.

I am also convinced despite the odds he will quit his job and do something worthwhile.
Whats my point? some people might be successful eventually, yet you need not follow their advice as it is highly unlikely to work for you.

“Its not necessary to have so much money to start on your own rather you take the plunge and the money will arrange itself” is his motto.

Do i believe him? in his case i guess i do.

@Gene – One thing to consider is that a government can also impose capital controls essentially seizing all foreign currencies within its borders. If the money is outside the country, you have to have someway of getting to it, that is, a plan for moving out of the country (a second passport).

Responding to Jacob: Yes, access to that foreign account is definitely important..that plan is already in place and working well:-) The real estate question is quite complex and that’s why it’s got me in quite a quandary. factors:

1) it’s a condo that I bought in early 2000’s as one unit in a multi-property purchase. I sold off the other properties in 2005-6 and this condo is the last one left. Am currently living in it when I am in the states.

2) my preference would be to (if I own at ALL) would be to have 50+ acres of land with a low-profile house on it and short airstrip, and not have a condo at all…but this is what I have at the moment.

3) am mainly concerned with IRS and other govt agencies that could apply leverage on me if I owned property in US free and clear. If property has a high % loan remaining then there is less political risk

4) selling and replacing the property is not really a good option for me at the moment

So the options are basically 1) pay only the scheduled payments 2) continue accelerated payoff 3) pay off loan in full

I suppose the question really isn’t answerable since we don’t know at this point whether the American economic decline will be gradual or sudden. Gradual decline over time should be manageable, Sudden collapse requiring putting my exit strategy to work would probably result in 100% loss of the asset (at least that will be my assumption). Remember that real estate only has value due to contract law. If a government collapses, contract law is compromised.

Ron said, “I try to make it a habit to only heed the advice of people who have done what I want to accomplish.”

That’s brilliant.

What I find fascinating, though, is how often people give advice in areas in which they are doing poorly. For example, the person in a bad marriage who doles out relationship advice. In fact, it seems that the amount and frequency of advice-giving is inversely proportional to how well a person is doing.

I think it’s a misery-loves-company sort of thing. Either that, or they are so deluded as to think they are doing well.

I look at advice the way I look at buying stuff. If someone approaches me to sell me something/give advice, that’s a red flag right there. If I see someone doing something that I want to do, I approach them and ask them how they did it.

I have a friend with an MBA degree and seems perfectly content with debt. I, on the other hand, am not comfortable with any debt including a mortgage. I am debt free except my mortgage. I am working very hard to pay off my mortgage within the next 3 yrs. When I discuss my plans with my friend, he always tell me some other financial alternative for me to consider and it always includes taking on more debt. I don’t get it?! I ignore him and continue with my plan and we subtly agree to disagree. IMO, you have to be very careful about giving financial advice as this could be a sure way of ruining a relationship for life.