………… “I found the house of my dreams. It’s in foreclosure and the bank will sell it to me for a great price.”
“How good is the price?” I asked. “Just before the real estate market crashed, the seller was asking $780,000 for the property. Today, I can buy it from the bank for $215,000. What do you think?” she asked.
“How would I know?” I replied. “All you’ve given me is the price.”
“Yes!” she squealed. “Now my husband and I can afford it.”
“Only cheap people buy on price,” I replied. “Just because something is cheap doesn’t mean it’s worth the cost.”
I then explained to her one of my most basic money principles: I buy value. I will pay more for value. ……..If I feel what I am buying is of value, I’ll pay the price. Value rather than price has made me rich.
Against my advice, my friend sought financing for her “dream” home. Fortunately, the bank turned her down. The house was on a busy street in a deteriorating neighborhood……… If her past is a crystal ball to her future, she will likely always be cheap and poor, even though she is a good, kind, educated, hard-working person.