How much is a trillion? A while ago, I wrote an article about that exact question. And today it seems more important than ever that there is a clear understanding of what that number means.
” Declining property values have wiped out more than $4 trillion in real estate wealth over four years, according to the Federal Reserve, and left almost a third of U.S. mortgage payers owing more than the value of their house“.
Four trillion dollars in real estate wealth gone!
A third of U.S. mortgage payers owe more than their home is worth!
No wonder that America is becoming a nation of renters. Why would anyone stay in a home that they purchased for $400,000 with a mortgage of $300,000 and the property today is worth about $100,00? Would you pay a $300,000 mortgage on a $100,00 property? Of course not. You’d turn the keys in at the bank and go rent a home. That would be the intelligent, prudent thing to do.
And that’s exactly what Americans are doing.
The question for us is “who are they going to rent from?”
Might as well be us!
Now, how much is a trillion? Here’s some context for you.
Imagine that you have a fantastic job that pays you one dollar for every second you work. There are 60 seconds in a minute and 60 minutes in an hour. If you were getting paid for every second of the year, you would take in $31,536,000 for the entire year. At that rate, to earn a trillion dollars, you would have to work more than 31,709 years! Or over 126,836 years at a dollar per second would about cover the 4 trillion dollars that is now gone forever in US real estate.