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To: Victor Lazlo who wrote (121949)	3/28/2001 9:19:31 AM
From: GST	Read Replies (2) \| Respond to of 164684

Victor: I know lots of people in Hawaii who used their house as equity -- as their main form of "savings". They saved money for ten years and used it as down payments for a house. Borrowed money from relatives to get just enough money together for the down payment if they were a little short. Unfortunately something very, very strange happened. The price of houses went down by 40% and there are a lot of people who now have lost their equity -- all their equity. And now they owe more for the house than it could be sold for. So they waited -- and now, ten years later they are still waiting. Imagine that! There is a reason why "home equity" is not the same as savings. I don't recall anybody saying home ownership is not a good idea, but if you are in a real estate market that is in a bubble it is a bad idea. Same with stocks -- a different class of asset. And nobody says that owning stocks is a bad idea -- although buying into a bubble might not be too bright. Certainly the Japanese have found ways to screw up that we never even considered -- I certainly don't want their problems. But there is a point here on savings -- it is smart to have a little actual money tucked away. It is not smart to arrange your finances in such a way that you are eaten alive by monthly debt payments while having zippo in the bank. It is not smart to live beyond your means -- and heaven knows, Americans have means -- but also a bad habit of living just a little beyond their means. There is a reason it is called "savings". We do everything but save. And doing a little more saving than we do would be good for us.