Inside look of a personal credit crisis

The health of the United States economy is not good. In fact, it has been really sick. The root cause of this sickness was cheap home loans to people who actually can't afford to pay. It's to hard to imagine how we have come to this situation. Many people blame the problem on irresponsible lenders and immoral investors. But, the truth is that the borrowers are also guilty as charged. Because they wanted to own beautiful and expensive houses with least amount of payments, they were willing to take on the worst possible kind of home loans and did so without asking any questions.  Personal greed for more materialistic rewards causes both educated and uneducated people to do stupid things.

The New York Times has an interesting article that describes a very personal story about how a upper-middle class family got itself into credit crisis. The main character of the story is Edmund L. Andrews and who is also the author of the article. Mr. Andrews is an educated personal, an economics report for the New York Times. From 2004 to 2009, for the desire to own a beautiful $460,000 home, Mr Andrews made every worst possible financial decisions he could have made to screwed up his life: took on high interests loans, ran up credit card debts to cover daily expenses, and use home equity to cover credit card debts after run dry on cash savings.

It is a sad but very educational story. Reading this story will give you a new perspective on how to manage personal finance and how to think about the value of material things in this world. Mr. Andrews is coming out with a new book, Busted: Life Inside the Great Mortgage Meltdown, that tells the story in full details. I wish his book can sell well and use the incomes to pay off his debts.