AIG is going down.  I had heard of this company but never knew how big and significant this company is (or was the case could be!).

It is basically bankrupt.  It is going to have a massive effect on the whole of the world and will bring the FTSE and the British economy downwards.  They even insure some homes in the UK and these will now be invalid as this company will not be able to pay out.  I must check my building insurance tomorrow!

It almost makes me belive that the only wealth you can really rely on is assets and more specifically cash producing assets like property.

Since the Lehman Brothers collapse it made me start wondering if my bank went bankrupt.  I have more than the £35,000 safety limit so that if Abbey went bankrupt I would be in serious trouble.  The money in my bank is really only a figure on a computer screen which could simply disappear.  SCARY STUFF.

One thing I am glad of, I own property.  Even if property prices collapse because no one is lending at least I own 200 of them to produce me some cash!  If I am one of the lucky ones which the bank would want to lend to (which is very likely as I haven't defaulted and have experience in buy to let for at least 8 years) I will be able to buy loads of bargains.

And when I say loads I really do mean loads.  I remember the days when properties in my home town in Essex where £17,000, properties in Corby were £9,000, new build properties in Manchester were £8,000 and 2 bed terraced in Salford were £5,000.

I think there are going to be around 5,000 landlords who are going to become very VERY rich over the next 3 years.  I suggest you start building your credit record, landlord experience and beefing up your attitude to risk.

Remember its much better to get in loads of debt than the other way round.  As long as you want to work and become successful you need to leverage up and get ready to buy big time!

It will be interesting watching the news tomorrow.  I wonder what is in store.

Ajay

 

 

Posted on: 17th Sep 2008