Petey's
Pipeline E-zine
Issue #22
January 2, 2006
Contents
Business
First Speculating in Real Estate
Random Ramblings and Miscellaneous Musings
Runner's High
Write Thinking The Mighty
Apostrophe
Business
First (Editorial)
Speculating in Real Estate
by Phil Hanson
Speculating
in real estate (also commonly, if somewhat erroneously, called
real estate investing) has always been among the most cherished
ways of making piles of unearned money. While real estate speculation
doesn't require much in the way of actual work, a good sense
of timing is helpful, if not essential. The idea is to buy into
as much house as you can afford when the bubble is just starting
to form, ride the bubble while it grows, and then cash out or
trade down before it pops.
In
theory, it seems like a great idea.
As
long as populations continue to grow there will be a demand
for additional housing. But when normal demand, low interest
rates, double-digit percentages of annual appreciation and perceived
opportunity converge, the dynamics of real estate investing
change dramatically. Add creative financing strategies to the
mix and you have a formula for huge profits—or a financial
disaster.
Take
the current real estate boom, for instance.
As
low interest rates and increased demand drove real estate values
higher, more than a few people used some or all of their savings
to make a down payment on an overpriced home, financing the
purchase with an interest-only mortgage loan. It was the interest-only
mortgage that brought an otherwise unaffordable home into the
realm of affordability for many low-stakes speculators who wanted
to play in a high-stakes game.
It's
a perfectly good scheme when everything goes according to plan.
Simply get into the market, make the barely affordable interest
payments while you watch the value of your house blast through
the roof, then sell before the principal part of the loan payment
kicks in (typically five years down the road).
But,
in certain circumstances, major pitfalls can leap into the path
of those using this particular wealth-building strategy. The
plan tends to come unraveled when appreciation growth slows
to the point where the hapless buyer can't recoup the initial
investment, including fees and other costs associated with buying
a home, before payments on the mortgage principal kick in. If
you can barely afford to make the interest payment, how are
you going to make the principal payment plus interest?
Another
alligator in the swimming pool is when the real estate market
crashes. If real estate values suddenly head south, the eager
buyers that have been fueling the housing market will surely
abandon real estate in favor of less
risky investments. Many real estate speculators who expected
to sell at a big profit may be forced to sell at a huge loss,
instead. For sure, those who came to the table late and can't
get out before the bubble bursts will get an unintended screwing.
K-Y
Jelly, anyone?
Copyright
© 2006 by Phil Hanson
All rights reserved.
Random
Ramblings & Miscellaneous Musings
Runner's
High
by Phil Hanson
Researchers
at Georgia Institute of Technology and the University of California,
Irvine, not long ago discovered that the legendary "runner's
high" is actually caused by cannabinoids occurring naturally
in the human body as the result of prolonged vigorous exercise.
This
sheds some light on earlier research that found a precise match
between cannabinoid molecules, derived from the hemp plant,
and neural receptor sites in the human brain (a "lock and
key" analogy is accurate).
Both
areas of research indicate that the human brain is hard-wired
to get high.
The
research results, of course, beg a couple of questions. Now
that the U.S. Government has lost its only real justification
for banning hemp (not that it ever had one to begin with), will
it do the sane thing and legalize hemp? Or, will it continue
on its present course of madness and outlaw exercise?
Copyright
© 2006 by Phil Hanson
All rights reserved.
Write
Thinking
The
Mighty Apostrophe
Although
they're small devices, apostrophes serve several important functions.
They form contractions, denote possessives, and form plurals
of numbers, letters and symbols.
Place
apostrophes with as much care as you would any letter that's
used in a word. Because apostrophes show possession or substitute
for missing letters or syllables, putting an apostrophe in the
wrong place means you've misspelled the word.
Below
are some examples demonstrating the various uses of apostrophes.
Each is followed by a brief explanation of the apostrophe's
use (in parentheses).
Contractions
She
can't come. (Contraction of cannot)
He won't arrive on time. (Contraction of will not)
They don't know. (Contraction of do not)
That doesn't make sense. (Contraction of does not)
Who's in charge? (Contraction of who is)
It's not important. (Contraction of it is)
They're running late. (Contraction of they are)
A
K'eremu native, Sequi'aranaqua'na'senemu is one
of the primary characters in Alan Dean Foster's sci-fi novel
The
Light-years Beneath My Feet.
(Here,
the contrived names in the top line are contracted by the use
of apostrophes. However, we have no way of knowing whether the
apostrophes substitute for single letters or entire strings
of letters which make up one or more syllables; we assume that
each apostrophe stands for one or more missing letters, but
in this case it's not important to know what those letters are.
The 's in Foster's denotes a possessive, signifying
that the sci-fi novel does indeed belong to Foster.)
Possessives
That
is Roger's bike.
That is the men's team.
(When
the noun form is either singular or plural, and ends with any
letter but s, add apostrophe s to the end of the
word to show possession.)
Mrs.
Rogers' house is across the street.
Those are the bosses' cars.
(When
the noun form is either singular or plural, and ends with s,
add only an apostrophe to the end of the word to show possession.)
Farming
is his brother-in-law's occupation. (Singular possessive
– one brother-in-law engaged in farming.)
Farming
is his brothers-in-law's occupation. (Plural possessive
– two or more brothers-in-law engaged in farming.)
Note
1:
For compound words, possession is always shown at the end of
the word. This applies regardless of whether—or which part
of—the compound word is pluralized.
Note
2: Personal possessive pronouns don't use apostrophes.
(his, hers, ours, theirs, yours, mine, its, whose)
