Luxury Real Estate

By Robert Lockard

I am sorry to keep talking about sad things in my luxury real estate blog entries, but I just read an article in CNN entitled “Ex-bankers on pushing customers to rack up debt” and it once again brought up many familiar concerns to my mind on the topic of consumer debt. I wish that I could talk about happy topics. I would much prefer to discuss luxury properties or any other topic, including how getting adequate sleep can lead to more success, but, alas, I feel it much more pressing to focus on the problems upon us.

I am absolutely disgusted by the state of our financial markets. It seems to me that dishonesty is rampant and the very people who are responsible for this mess are asking for a great deal of money to supposedly solve the problem. But I care about people much more than institutions. And, based upon the testimony of the two honest women in the CNN article, who both have good consciences, I see little difference between the practices of certain banks and lenders and the practices of drug pushers. Many lenders trick people into taking more money than they need, they strive to get young people addicted and they keep people in a state of dependency for extended periods of time. All of that adds up to trouble.

Debt is a plague that, when handled unwisely, can lead to all sorts of problems that I think are even worse than the horrible effects of drug abuse. People can at least stop taking drugs and eventually go through a process of withdrawal and recovery. But with debt, even if a person stops going into more debt, they still have interest building up on the money they owe and they face all sorts of roadblocks on the way to recovery.

The very institutions that have pushed so many people to get addicted to debt are now suffering from a major withdrawal (pardon the banking pun) and seem on the verge of collapse… wait a minute – collapse? How is this possible? It starts with how good people are treated. We have not been treated fairly and now those who have been engaging in dishonest practices are reaping the bitter fruit. We have become a nation of debtors, instead of a nation of wealth.

Perhaps our financial market, as it currently stands, should not be saved. Perhaps we must soon create an entirely new and honest way of working with our money. Whatever we choose, we cannot keep doing what we have been doing.

I feel like I’ve been ending every blog entry with an apology for being so negative. I just don’t want to leave my readers with a sense of anger or hopelessness. I think that there is much to hope about. There are plenty of good people in this world and in our wonderful nation, the United States. I am confident we will make it through this sad time. I just want to make sure this never happens again.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate's newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. The photo of the parrot biting a credit card is from www.flickr.com/photos/djkbird214/2695122732 and it is the copyright of dj-squared.

By Robert Lockard

A while ago I stepped back from writing about luxury real estate to discuss a terribly destructive force that threatens to destroy families and make people miserable: debt. I would like to discuss something that I find to be just as dangerous as addiction to debt – the illogically high cost of earning a college degree.

I read a potentially explosive story on CNN yesterday about a bubble in the cost of higher education that makes the real-estate bubble or the tech crash in 2000 look tame in comparison.

I’d like to start by talking about my experience in college. When I attended college not too long ago, tuition and book costs were already getting out of hand, although they were manageable. I attended a community college in Washington state for my first two years to obtain my Associate’s degree. I had hoped to transfer to the University of Washington to complete my Bachelor of Arts in Communications, but the cost was prohibitive and, even though I graduated with honors and on the Dean’s list, I still had to wait a long time to enter that college.

Instead, I decided to accept a scholarship at Brigham Young University in Provo, Utah and that turned out to be a very smart decision. In addition to the positive environment that beautiful campus offered, the cost of attending there was relatively low compared to my other options and I was able to pay for my entire education without going into hardly any debt. I am one of nine children, and my parents wisely told me that I would have to find a way to pay for my education by myself. Through a great deal of hard work and tight budgeting, I made it through without having to burden my family members.

During my time in college, I kept my mind focused on why I was there. I wasn’t there to waste time or take frivolous classes; I was there to finish my degree as quickly and as meaningfully as possible so that I could put my skills to use. I am grateful for the opportunities my college degree has opened for me. However, education costs are rising so fast that there might not be much reason for people to attend college in the future.

I would probably be sympathetic to colleges if the reason for the rise in education costs was because they were improving their education techniques or doing other things that would warrant such cost increases. But the truth is that this is not the case. Many colleges are increasing tuition costs for no other reason than because they want more students to apply. It seems to defy logic, but it’s true. Colleges appear to be playing a game that they will eventually lose. When they raise prices, people assume that they must have done so because they are more prestigious or offer better learning opportunities and so the colleges usually receive an increase in applications. This pattern cannot last forever.


Education is extremely important. It allows people to rise from humble circumstances and it also helps them make informed decisions about where they want to go in life. By making education worthless, colleges are doing a great disservice to their students. By worthless, I mean that the cost far exceeds the rewards. Greater cost does not always mean greater return on investment.

Increases in healthcare, energy and real-estate costs don’t even come close to touching the rise in education costs, as you can see in the graph in the CNN article. Knowledge is power, and if the cost of education becomes so high that that the benefits of earning it become small in comparison then we will be in big trouble. I am not suggesting that college degrees be easier to obtain or that unqualified people should receive an education without working hard. I am suggesting that colleges are in danger. They spend much of their increasing amount of money on frivolous amenities that do not improve their educational services or make their students’ diplomas any more valuable. Posh restaurants, nicer dorms and other foolish perks are unimportant for students who are simply hoping to receive the education they need to progress in life.

At some point people are going to realize that an education is not worth living under such an extreme amount of debt to obtain. When that day comes and colleges must cut their tuitions drastically, many cherished institutions will most certainly be unable to cope with this dramatic shift and they will come crashing down. Destroyed by their own pride and haughtiness. They will discover that they have spent their money on things that have no value and they are unable to offer students what they promised: an honest education.

I dislike focusing on something so negative as this, but I think it deserves special attention. Thank you very much for your comments. Feel free to let me know what you think of the state of higher education.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. I apologize again for sounding so negative. I am a very hopeful person and I trust that things will turn out right in the end. The photo of the bleeding wallet is from www.flickr.com/photos/adobemac/161319144 and it is the copyright of adobemac. The photo of the door is from www.flickr.com/photos/ben-zvan-photography/468487548 and it is the copyright of Ben Zvan.

By Robert Lockard

I’d like to talk about a topic that is not necessarily a pressing matter for people buying luxury real estate, but which I still find very important: Debt. It is very sad to me to see so many people struggling with the enormous burden of debt.

I recently read a wonderful editorial in The Seattle Post-Intelligencer entitled “The great seduction,” in which author David Brooks points out the astonishing truth about debt. Brooks notes that for the past 30 years Americans have forgotten our noble heritage of frugality and living within our means. We have even forgotten the lessons of the Great Depression that we should not overextend ourselves on credit.

I have heard people argue that easy credit is a good thing because it leads to additional economic growth and a wealth of new capital to expand business operations and ventures. I politely disagree. Yes, debt gives us more money in the short term to grow, but it is a false growth based upon a false sense of stability.

Debt has a way of perpetuating itself. Years ago, homebuyers paid off their home loans as quickly as possible because they understood the disadvantages of being indebted and paying interest. However, now we are encouraged to stay in debt and use our unpaid-for assets as leverage to go into even more debt.

I am not desirous to abolish all debt because it serves a useful purpose in moderation. But I would like to see debt portrayed as less of a convenience and more of an obligation and hardship that should not be undertaken lightly.

Many people who declare bankruptcy do so after facing unexpected medical issues, job loss or other life-changing events. I think that people are smart and that they can make it through these tough times if they are prepared. But many of us are not saving money and we are drowning in ever-growing debt.

I want to see this change. No matter if you are rich, poor or somewhere in between, simply living within your means will help you avoid the unhappiness and stress of living in debt.

The above picture is from www.anxietyculture.com/debt.htm.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. Feel free to share your thoughts on what can be done about this sad issue. I definitely think that people are smart and I hope that we will figure out a solution to this problem.