What You Should Know About Home Equity Lines Of Credit. What Is A Home Equity Line O: Fill & Download for Free

Let us understand this with a story of a beautiful couple Rohit and Ritika.Rohit and Ritika entered into a wedlock with arranged marriage in2010. Though their marriage was arranged but they got madly in love with each other in the phase between engagement and marriage.After marriage they started a new and a beautiful life. Vacations, expensive gifts, dining out was the routine for them. As they both were earning 15 LPA together so going out was never a concern.First two years of marriage sailed smoothly(but still nothing substantial they saved in these two years ), and they decided to have a child and they were blessed with a beautiful daughter in 2013. But now expenses have increased with addition of a family member and also income has reduced because of child rearing breaks by Ritika. They both were feeling a pinch now.4. Now as a parents of a beautiful daughter they were worried about her future too and Ritika also decided to leave the job for some years to help her daughter grow up in a perfect environment.5. With increasing expenses, rent to pay, income reduced to half there was nothing much left at the end of the month.6. But there was more to come in this worsening financial situation. You know society always plays its part. They were getting society pressure that they shall purchase their home rather than living on rent. They both decided to purchase home in 2015, taken home loan and did downpayment of Rs 15 Lakhs with the amount they accumulated prior to their marriage.7. Final nail in the coffin of their financial life was to purchase a CAR in 2016. They were living hand to mouth already with addition of home loan EMI. Now CAR LOAN EMI is addition to the debt trap.8. Rohit started using credit card for daily expenses now as he was always short of payment. But the worse Part is he used to miss the due date of payment or paid the minimum amount due and hence paying hefty interest on the rest amount. He is in complete debt trap now.9. Now in 2019 he is still under pressure of all loan EMI’s, credit card bills , increasing expenses. With god grace he hasn't faced any emergency situation like Job loss or medical emergency as with almost nothing in deposits or saving accounts they would have been in an horrible situation. But now Ritika is again thinking to join job to help his husband.what could have happened differently so that they should not have messed up their life and might have their dream run of first two years to continue forever and ever and ever ………..… let us see.RITIKA AND ROHIT MARRIED LIFE VERSION 2.OThey both got married in 2010. They went to a good honeymoon location, they still gifted each other , they still dined out but they also decided one more thing. They decided to create an emergency fund for them. They both decided to create a joint saving account and transfer some money from their salary account at the starting of the month. So they were following a rule “ Save first and then spend”. In first two years they accumulated 5 lakhs and decided to do Fixed deposit for 5 years. In case of emergency they still can liquidate this amount easily.In 2013 they were blessed with a beautiful daughter. Ritika had to leave job to take care of her daughter and now income is almost reduced to half. As with decrease in income and increase in expense they decided to go for a frugal living for two years and saved amount to get invested in “SAMRIDHI SUKANYA YOJNA for their daughter”. Their daughter future spendings seems to be secured now.They were getting societal pressure to purchase home. Both sat together discussed on pros and cons of taking home and decided to postpone the decision till the time ritika joins the Job again.CAR was need for them. Hence they decided to purchase hatchback of Rs 4 lakh. But they didn't took the loan, they funded this from the amount they accumulated prior to the marriage. With 11 lakhs left they decide to do Systematic Transfer plan to equity funds for their financial goals of retirement and home purchase some years down the line.They both are at mental peace and are in deeper love with each other as they both handled the situation smartly and also secured their financial future too.Now in 2019 Ritika is again thinking to join the job but before that they are planning a 10 days trip to Bali. It is costing them around 1 Lakhs and this is getting funded through interest income. Oh you forgot….. Their FD of 5 lakhs have given them maturity amount of 7.2 Lakhs. They deserve this trip for themselves as they handled their situation so beautifully.It is upto you now to select ‘Ritika and Rohit version 1.O’ or ‘ Ritika and Rohit version 2.O’Follow me at Kapil Kukreja so that you DON'T MISS any detailed personal finance tips

Without reading too much into the question, I think, that the person who asked it, wasn’t looking for excuses, defending one’s “work-life balance”. The real question was not about “Why”: you keep working for the man, but “How”: to get out of the rat race and convert your skills and ingenuity into financial independence. That’s how we, engineers, should approach problems.Being an engineer, I can’t help, but get to solving this particular one. I’ve been doing it for a while now. Not philosophizing. Not (just) founding startups, pivoting, and finding my niche. Establishing a clean, unambiguous, and reliable method to convert one’s programming skills into commercial success. Don’t you think if such reliable process existed, we’d have seen less excuses among the answers below?I am not pushing mine on you. Just merely saying, that I’ve heard enough bitching and moaning about luck and connections, let alone mythical “business skills” and “aptitude”. We, engineers, already have something more valuable: ability to solve incomprehensible for the 99% of the population problems. Everything else is just the matter of applying logical thinking and problem-solving to a different task.Our employers pay us to unconditionally solve tough (technical) problems, making things less uhm… statistical (luck) or dependent on the unpredictable human factor (connections). Most importantly, the problem is not mysteriously “managerial” or “entrepreneurial”. It’s 100% technical. I’m trying my best to explain it here in the shortest way possible, but the topic is long and nerdy, so if you are curious, read a deeper, more technical take on it in my Medium IT meritocracy series e.g. this post: IT Meritocracy. Part 4: Pedaling in a Higher Gear. Is Writing Less Code Better?Why?I wish I had Musk’s disdain for employment back in the 90s instead of happily living in the golden cage IT was at the time: wondering why I was paid $90/hr ($180K) for writing boilerplate code, which was a drastic change of pace compared to my first five years in the industry (back in Belarus) architecting and developing banking software. Never stopped wanting to do (and make) more. I just thought it’d happen automatically, through my “career”.As any ambitious software engineer, I reached my career (meaning salary) cap within two years. A few years later, in 2002, it was slashed in half by so-called “outsourcing”. You know the story.IT compensation remains half of its pre-2002 levels (including 90s, 80s, and even 70s) adjusted for inflation. Take a very conservative 1990’s $75/hr ($150K) and use the official inflation rate of 100% (also lower than actual). What do we get? $300K, which should have been paid (to senior developers) everywhere. Not just at Google, Facebook, and a handful of top consumer tech employers.Want to wait until the inflation dilutes your $75K income (in pre-2002 money) to $45K? Be my guest. Not going to happen? Everyone thought so in 2002 too. We’d just become dignified “architects” to oversee “offshore” code monkeys. Our bosses would still need us, right? There is a finite number of true programmers on Earth writing all of the code. Slave labor doesn’t work in our highly creative occupation.Everyone knew that, including our MBA bosses. But you thought they wouldn’t dare? To remove the “creative” from the equation above – instead of removing “slave”. That’s what happened in IT (meaning the world outside Googles). All projects were dumbed down to accommodate the cheapest eternally junior code monkeys and remove the dependence on “expensive” “resources” like you.Your skills are no longer needed, period. You are employed to keep alive some pre-Y2K mainframe crap and all spaghetti typed in circa-2002 enterprise Java. Plus of course make several layers of middlemen their commissions. Is it fraud? Colossal waste for sure. Does it lead to (project) failures? Yes, at 70-90% rate, and no one (other than pawns like you) gets fired. Can it kill the company? Sure. Then you get laid off too. Or the company gets bailed out (all debts forgiven). You still get laid off to “reduce costs”, because the chances are if you are asking about your own business, you know you’ve reached your cap and thus are at the top of the layoff list, being so “expensive”.One thing for sure. No matter how much good (programming) work you do – to save your project or even employer – not only you will not be paid for it, but most likely it will be perceived as aiming at your boss seat. Yes, there is only one outcome: you get laid off. I was once - for calmly telling my boss about doing their 18-month $30M project already nine months underway and going nowhere, in six months with six people instead of 50. It wasn’t a claim or promise. It was a detailed plan.Perils of dealing with the insecure second in command? Should have sought a one-on-one meeting with the founder who allegedly had skin in the game? Hoping the conversation would go smoother? It was my fault. I was overqualified, yet I allowed to be hired as a pawn. Did I have a chance to explain anyone there the founder-level generalist concept? That a generalist “back end” developer is already a business analyst (SME) knowing the domain better than any user, a UI designer, a DBA, a DevOps, and last but not least, a (very technical) manager. I think it was the moment my boss realized the latter, that sealed my fate there.Founder-level engineers don’t beg for promotions, responsibilities, and permissions to do things right. They found their own companies doing that right thing.It’s funny, how everyone sitting on his/her ass in some cubicle, sighs about luck and connections in the distant “business world”, not realizing that both invaded IT long time ago. Software engineering was one of the last occupations with meritocracy. One could grow (to some cap, but still) due to his skills and contribution instead of luck, connections, and ass-kissing politics. The brainpower mattered. No more.Forget meritocracy. Achievement-based job security is long gone. Both can only exist (for creative college-educated professionals) in countries with the sane birth rate. Once the third-world overpopulation and poverty were imported into American IT, meritocracy disappeared. The third world hiring is about being noticed by the master: either by luck (standing closer to the master at the right moment and shouting louder) or connections: being his/her relative. At least from the same clan/village. I’d say you have a much higher chance to make it as a startup founder, than grow even to 2/3 of Google’s salary at your current job.Who (Are You)?I am going to skip “perks”, “work-life balance”, and the rest of HR BS offered to soften the (pay cut) blow. I’ve changed 20+ projects during my IT consultant tenure. I’ve interviewed at several hundred companies. I’ve seen good and bad bosses, and plenty of bright and mediocre programmers. No, I haven’t worked at Google. Perhaps all the talent went there, as everyone says. Outside of Google and Facebook though, I am yet to see a laidback and happy with his compensation programming expert. Moving up is all about abandoning engineering and getting into “management”, you know.I don’t think a happy developer asked this question. Deciding between one’s comfortable “mid-career” cubicle life and entrepreneurial uncertainty is not really a question of choice. Or curiosity. It is a necessity – to earn more, while remaining technical and leveraging your engineering skills. The question clearly was for unhappy employees (like myself), who reached their cap and faced abandoning programming to make more.Reaching the cap happens very quickly for good engineers. In fact, with all today’s automation – to replace so called “coders” typing DAOs, DTOs, and other largely unneeded glue code, anyone unable to grow from junior to senior (making his/her own design decisions and working w/o supervision) in six months and reach the cap in two years, will remain junior for life regardless of the “years of experience”. He/she should do everyone a favor and leave the industry: getting out of the way of the few capable developers who end up doing all the work anyway: including rewriting (refactoring) 100% of the buggy code, originally typed by their mediocre colleagues.There are several reasons behind bloated teams where only 2 out of 10 programmers actually work. Kicked-back middleman man-hour revenue, manager’s ambitions and desire to command “outsourced” armies of code monkeys, realizing IT (R&D) budgets which would have been otherwise lost to taxes, making the rounds of funding worth at “funded” (vaporware) startups, etc. Remove that fraud, and even paid zero, juniors are the most expensive employees in the team. They require at least one (“expensive”) senior doing double work.I don’t want to insult anyone, but applying simple logic, anyone laid-back and happy with his/her pay deserves it, right? While unhappy employees want more because they can do more. That capacity can arguably be utilized (and appreciated) at Google, and for sure at your own company.The question wasn’t for “happy” employees at all. They are not ready for a startup – from the technical, not business perspective. Do logical and creative people top programmers always are, need MBA wisdoms taught in business schools? We can pick them up online, if any of such rounded advice is even relevant. No, it’s about the technical abilities and real inventions.It is the drastic mismatch between one’s high programming skills, expertise, ingenuity and the utilization, let alone reward, of thereof, that prompts underpaid, abused, and obviously very unhappy engineers to found startups.Who (Am I – to Offer This Advice)?Have I “made it” – joining the multi-millionaire “serial entrepreneurs” club? Not yet. Am I qualified to give any advice on the matter? You tell me. I ended my last contract, which was independent, direct, and could hardly pass for “employment” more than a year ago, because I believe in my own programming skills to develop my own product; And in my partner’s sales skills to sell it. I’ll cover it in depth in the ”What” section, but getting a bit ahead, any contract, “solution” or another single-customer project is not really a startup. You are still selling your time, not your product.I recently came across an interesting Quora question about one of the smartest people on Earth – Nassim Taleb. It read “Is Taleb really that smart?” implying how after all his genius blogs and books he is not the next Soros or Buffett, considering his financial background. Taleb is self-made and financially independent. He will never ever have to work for the man. That’s what you need to know first. Whether he just wanted to retire and write or getting higher required doing something dirty and dishonest (common for his industry) he did not condone, was his choice.It doesn’t matter in the context of this question anyway. Making your “first million” does, so to speak. After that a lot of doors open and things become exponentially easier. Let’s concentrate on the first, excruciatingly painful phase of achieving financial independence - self-funded: with a real product, through honest sales.Remember two Jobs movies? Which Jobs did you like more: the Kutcher’s or Fassbender’s? Definitely the former for me. Though the masses cared less about struggling young Steve and wanted to see the “established” icon they got used to buying their iPhones. Similarly, a lot of people still believe that Musk started with PayPal. Some divine voice must have put that idea into his head.If that was me right before I started my journey, I’d have definitely wanted to hear from people I was about to become: who started self-funded and were in the process of making their first million. Still do. Please tell your stories.Asking/researching someone who’s “made it big”, let alone a celebrity is pointless.If you are tracing one’s known success back to some pivoting point, the chances are you’d discover a tale of either luck (Zuckerberg) or networking/connections (Musk).Followed by lots of hard work and perseverance of course, but luck and connections nevertheless – the two variables I am trying to eliminate from the equation if you remember.Speaking of Google, that wasn’t luck at all. Larry and Sergey came close to pulling the plug and selling their (for the lack of a better term) algorithm to the first buyer for a $100K. Very few people remember, that the future of Internet (defined by VCs and other industry shapers with deep pockets) was about two things in 1998: obnoxious ad-heavy “portals” like Yahoo marginally above porn sites, and vague ideas about self-discovery B2B web service hubs. No one needed a yet another search engine. The page visitor’s duty was to click on ads, not search for information. An ad-less white page was a blasphemy.Reminds you of something? Every product today (blog, messenger, game, SaaS) must be “free”: an ad delivery vehicle and/or marketing data gathering tool. I’ll talk about it in a bit.In any case I am interested in success stories due to the product (sales of) instead of luck, networking, and “exits”. Which leads us to the next topic: what is success? Or simply…What?With all due respect, how one could bring up “exits”, answering this question? Thankfully one popular Quora “serial entrepreneur” (forgot his credentials: Stanford’s or Harvard’s) didn’t chime in with his typical startup advice: finding the best COO. I am sure the CFO too.Come on, you don’t honestly think, asking how you can turn your programming skills into money, that the big boys would happily invite you into their club to play exit games?You know why? Because your programming skills are not needed at all to hype some vaporware for four years, collecting rounds of funding, none of which, even the very first one, comes from personal money. Nor of course the big score. I am not going to speculate whether the person approving the acquisition receives a kickback or makes an honest mistake. What matters for you, is no one needs a working let alone good product to play that game, since it is not the product being sold - to real customers. It’s the company – to some alleged (bribed) “sucker” - on whatever hyped promises.Hey, a few smart and respectable people (Musk) played that game to become somebody and proceed to something real. If you have his charisma and think you can befriend serious people 20 years later, when they completely closed their cushy world to outsiders, you don’t need programming skills. If you have an MIT or Caltech diploma hanging on the wall or spent a couple of years at Google or Amazon, you don’t need programming skills either. You’d be a nominal CTO to show off to “investors” (churning somebody else’s money) to inspire “confidence”. Even though everyone knows the game.Unfortunately, if you are just a brilliant programmer w/o any of the above regalia, you will actually have to build something that works and sells. BTW, is raised money really revenue? Can you count it towards your net worth? Can you go and buy a Lamborghini? Everyone knows the answer, but come on. Why that BS is used as a measure of success? It’s not your money.Though in the current fraudulent economy… what is money? All of it ultimately comes from the government, that simply prints it. The printed money is “picked up” out of thin air through nano-trading and intentional business mistakes, followed by debt forgiveness. Failures are insured, while insurance companies are bailed out. Even individuals play that game living on credit cards and using home equity as an ATM – to default later.Am I one of the last suckers who pays his credit card bills in full every month? How can I compete with money-churners, making it out of thin air, while my partner and I plan to earn a living through honest sales of our better than competition products? Should we create our own cryptocurrency to move out of the rotten System, where we are clearly at a disadvantage – being robbed with the rest of the population every day simply by using the same currency others are distributed loads of w/o any effort?And why everything is expected to be free?There has to be a balance between the first/lucky with their free social networks, messengers, and portals making money on ads and other "marketing", and those, who don't believe in luck (competing with thousands of Facebook and Snapchat "re-inventors" for the widest user base to sell to advertisers), but develop more complex and precise software for narrower niches of willing to pay professionals. Will those professional offerings ever be as profitable, as "free" consumer ones, advertising/marketing to the lowest common denominator? Or absolutely every software product: site, app, etc. needs to be a "free" vehicle to deliver ads?The answer is simple. No one expects you to build anything robust (beyond blogs, messengers, and WordPress websites) - worthy of a price tag. That’s another big boy’s club: multi-million Oracle and Salesforce ERPs. Thankfully, the gates to that particular fortress can be blown open – with technology instead of Stanford and Harvard connections.Technology is KeyThere was a time, when one could make a fortune with a primitive website. That era is gone. All simple (consumer) niches have been taken. You can try to reinvent Facebook or Snapchat of course: with a slicker UI and trendier features, though everything is about “science” implying you can no longer build industrial products in your garage. It allegedly requires multi-million scientific research in some expensive “lab”.That’s what the system wants you to think: not intentionally, since the main target of such propaganda are alleged “suckers” to “exit” to. I somehow sense the person who asked this question is not a scientist. And a scientist is not an engineer. He/she would need a “team” to materialize some “algorithm”, meaning funding. Luck, connections, here we fucking go again…It’s not as grim, as one may think. Your barrier of entry is not mythical multi-million “scientific” or another equipment, absent in the virtual programming world. It’s the complexity of programming itself.Make no mistake. Today you have to offer something orders of magnitude more complex compared to the projects, that put Musk and Zuckerberg on the map. And that is actually great! Haven’t you wished for great challenging interview questions and assignments (no, not of stupid algorithmic kind at Google and Amazon)? Something only you can solve instead of hiring indiscriminately, meaning choosing the cheapest code monkey with some required abbreviation in the resume. It’s the same thing.Take advantage of more intense programming you are capable of, and others are not doing for whatever reason: lower IQ, laziness, or (you knew I couldn’t resist?) the lack of “funding”, allocated to trendy scientific vaporware, rather than unglamorous quality coding.Corporate IT has been celebrating the Y2K aversion for 18 years, doing nothing. Dumbing down programming to hire the cheapest third-world code monkeys predictably led to the industry stagnation. Your technically clueless boss may not need your skills, but many companies suffocating w/o the 21st Century business software definitely do.Oracle and friends simply cannot offer them anything, let alone at the right price. If you ask me, the Great IT Consulting Food Chain led by Oracle cannot offer even their typical big corporate customers stuff that works, as it requires exponentially more people every year to keep that shit running. Good for staffing middleman and others making money on man-hours. Bad for everyone else.The planet is running out of programmers even after annexing India to the Western labor pool. It needs the new technology to employ less people (true programmers like yourself) able to do 100x more.How? By NOT writing the glue code currently typed by code monkeys. By NOT fixing bugs that could have been prevented by good design. By NOT adding some package to integrate the 20% of another package, which couldn’t integrate 20% of the previous package, and so on, and so forth all the way to the original external package/service that needed to be “integrated”, while it could have been written internally in two days (or hours) with the right technology in the hands of the skilled professional armed with the new generation of industrial grade tools.Why IT always chooses “buy” over “build” for the simplest things, that can be developed in-house? Followed by the painful “integration” through more “buys”. Well, someone decided to remove “creative” (create == build) from “slave labor doesn’t work in creative occupations”, if you may recall. Remove “slave” instead and find out how creativity cuts the costs as exponentially, as IT departments typically increase their (slave) headcount. And still fail.Cut one slave (package, module, etc.) and you’ll discover, that you can cut two more. Then four more. Then eight. You get the picture. Now, a lot of people (particularly middlemen) would lose their revenue. Do you care? They never cared about you. And with all due respect, it’s war. With mediocrity, that tried to evict talent from IT.Do you need to sell your products to corporate IT? No. Let the outsourced IT die, eaten alive by the third-world parasites, it had no immunity against. There is a vast empty market outside it: projects under $500K, that even Salesforce (10x more efficient than archaic Oracle, SAP, and IBM) cannot take with its overhead. Screw projects. Do products: SaaS targeted for specific niches. Automate auto dealers, insurance agents, caterers, pool cleaners, and many others. There is a huge gap between QuickBooks and generic Zoho form-filling apps, and multi-million custom ERPs.Just keep one thing in mind. The System won’t help at all. You don’t need its help. You don’t need accelerators or angels. Just a salesperson cofounder.CofounderProgrammer’s brain is not wired to please the customer (while thinking “how the fuck am I going to do what I just promised?”). We speak in boring long sentences, turning a conversation into a logical argument - instead of projecting illogical positive emotions and looking at the client’s emotional response. There are many other little things, that prevent us from becoming salesmen. But even if we could make a conscious effort to sell, we have no time for it. It’s a full-time job like programming.A friend of mine used to go to LA CTO meetups. One thing that amazed him there was how slick and un-geeky some CTOs were: 100% salesmen. I asked him: “Do they write code?”There is not enough time in a day, and not enough space in one’s brain to combine both coding and sales. I can’t afford not coding at the moment. Not because I love programming. Not because the hired help is expensive. Because no matter how smart your first developer is, if you are doing something real: meaning trying to beat Salesforce and Oracle with better technology – today, in 2018, that technology must be fairly complex compared to crude websites and little frameworks 20 years ago, Musk made his fortune with (w/o even finishing one). Thus, it’d take me six months to a year to train my replacement and offload at least one product to him.We are talking about the first years and the first million here. You’ll be in the same shoes. You won’t have time or energy for sales. Thankfully finding the right salesperson cofounder is easier than one thinks.I am not a classic nerd, but I was very shy in high school. My beauty standards were rather high. I worshipped girls. I envied alpha males, who seemed to get them easy. Sorry for a corny remark, it was a shocking discovery for me at the time, that girls also wanted to fuck.You won’t believe how much talented and ambitious salespeople long to meet capable developers – yes, the Earth has a limited supply of. Salespeople too. I’ve changed two would be cofounders before I found the right one: a street hustler instead of a slick all-talk VP of Sales type. A true soulmate.You can network at startup meetups in search of an investor or “influencer” to take you under his/her wing, which wouldn’t be different from employment, since you’d immediately surrender 60-90% of your equity in exchange for some pre-pre-pre-seed $50K. Or you can look for a salesperson cofounder. We met here, on Quora. We both write, sharing the same view on employment and meritocracy.Doing a Better Job Than Your Employer.Without a salesperson cofounder… you are back in the luck and connections world. Forget about enterprise sales. You are not part of that world. You can hype some cute little framework on GitHub, hoping some investor would notice your open-source stuff and nurture it enough to “exit” to Oracle. You can write little couple-form data entry SaaS competing with Zoho and small-time freelancers, that offers that stuff for free. You can write a ubiquitous database administration or another DevOps tool and apply to 500 Startups with it. Lastly you can compete with thousands of fresh grads trying to reinvent Facebook and Snapchat.Can you take on something more substantial e.g. your spaghetti-ridden project at work? Not really. Not with the current technology. It serves two groups: corporate IT churning man-hours, and freelancers churning out single-purpose (eCommerce, etc.) websites. There is nothing in between.No matter how diligent and hard-working you are, you would end up with the same effort and “team”, as your current dysfunctional one. Or would deliver something already available for free, written by some local high school kid in WordPress, or developed dirt-cheap by an Indian dev shop.Come on, what would you do differently? Write perfectly object-oriented DAOs, DTOs, and other glue code required by the “three-tier” architecture? Add more micro-services and REST layers which further complicate things? Find and access third-party APIs (for something you can easily do yourself), since everyone is doing it because “it is all about integration”, “buy over build”, and other IT dogmas? Can you just write 100 lines (or less) of great code instead? No. That’s not what you (I mean the bloated “team” at your work) is supposed to solve the problem with.People forgot how to program. Programming has been dumbed down. It’s never been strong in (corporate) IT to begin with. Even before “outsourcing”. It’s the same three-tier relational technology, that failed to replace COBOL and other Y2K-vulnerable crap 20 years ago. Because even with powerful languages like C++ and Java it’s never been about good (object-oriented, functional, etc.) programming. Programming is complex and hard. There is a finite number of people in the world capable of leveraging powerful industrial languages. Everyone outside of that group is looking for a slightest excuse to avoid quality programming.But being smarter than your underpaid and abused coworkers is not enough. You need to start operating outside of their realm. You need to define your own “stacks”. Otherwise you’d end up just like them: a dysfunctional group of narrowly specialized individuals in need of some daddy: investor or employer doesn’t matter.* * *It’s only hard to make the first million, right? After that scaling is straightforward ($N in, $N + $M out), killing Zoho and eventually retiring Oracle. Why not? I didn’t write it to complain. Just telling you what it feels like: making that “first million” with my bare programming skills and my partner’s sales sorcery. Still won’t return to the outsourced IT in any (employee) capacity. Only as an Oracle killer.

This is a very complex problem to answer. Thanks for the ATA. Here is my explanation, some background, and why, in my opinion, we got to where we got to. "Willful Blindness" comes to mind...but I digress. http://new.ted.com/talks/margaret_heffernan_the_dangers_of_willful_blindnessWhen you are seeking to maintain power, by staying in office you need money and votes. You become "stupid", and pass whatever legislation you can to give people what they want.Demands for housing do not come with reasonableness. Housing is one of the underpinnings of the U.S. economy. You have builders, developers, carpenters, brick layers, landscapers, appliance makers, you could go on and on. Housing employs millions of people. Housing starts and housing sales drive this economy and are reported from bls.gov every month.Let me step back in time. A "thousand years ago" when I bought my first house. It was decided socially in the 70's that "you had made it" when you moved out of an apartment and into your own home! Your debts were under control, your education and experience was sufficient enough to go to a bank and borrow $16,000 for a house. You had to meet these standards, income, job security, debt to pay check ratio. You got the loan. You were part of "the community". You were responsible.30 years later, everything became different. Down payments. Not required. Balloon mortgages would adjust 5 years out in the future, but for the time being your payment was low. Artificially. Your were essentially allowed to have a mortgage like a lease on an apartment. You deserved it. You were being "discriminated against" and "you were being kept out of the housing market!" Housing should be a right!!Life liberty and the pursuit of happiness, PLUS a great job, a nice house, and free health care!! Why not throw in subsidized food, extended unemployment checks, cheap student loans. Life could be so much better if life was fairer.Politicians listened. Regulations were eased and more and more people got houses. No down payment, low and affordable teaser-loans. Problem solved! ... or was it? Did we build a ticking time bomb? Surely the pols in D.C. knew what they were doing.But "The Law of UNINTENDED Consequences" was still in effect. It can never be amended or repealed, or replaced.The economy turns down and unemployment goes to double digits and mortgage payment jump. Interest rates are up and loan payments are up. What to do? The repo man who takes your car when you miss 6 months of payments, is now your banker who takes your house for missing 2 years of payments. You put nothing down on that car or that house. You can't make the note. You lose your "stuff".The bank has become the owner of your house. The government didn't see this coming . Bankers are not able to sit on empty houses, and hold a loan that is in default.Bankers realize they must remove these bad loans from their books so they re-sell them to other banks—en masse. They package them up as 100 mortgages, their value being the property value of the land and building. Some are valuable some are not. They use a value as "mark to market". http://investopedia.com/terms/m/marktomarket.asp/Market value of the property is an unknown in this market situation. The bankers knew this, but followed currently accepted accounting practices. In a down market these assets became less and less valuable; there were increasing numbers of "distressed" properties now on the housing market. The Law of Unintended Consequences", was in force. Banks became insolvent holding bad loans that politicians thought was a good plan to help people and get them votes.It was a "House of Cards", to use a movie metaphor, it could not stand. Banks began to buy other banks and homeowners filed for bankruptcy. All for a vote!http://finance.fortune.cnn.com/2010/12/23/how-the-roof-fell-in-on-countrywide/Editor’s note: This week FORTUNE is publishing excerpts from its favorite business books of 2010. This excerpt from Bethany McLean and Joe Nocera’s All the Devils are Here talks about how Countrywide’s Angelo Mozilo was blind to the risky mortgages that would eventually wound his firm and contribute to the global financial crisis.CEO and co-founder Angelo Mozilo saw a subprime mortgage crisis coming — for everyone except his own company.Mozilo “is a great salesman, and great salesmen are often the ones who get sold,” a former Countrywide executive says.It was one of the more hotly anticipated shows of the fall. On Oct. 18, the trial of Countrywide’s former CEO, Angelo Mozilo, along with David Sambol, its president, and Eric Sieracki, the CFO, was set to begin. Mozilo has been publicly excoriated as one of the real villains of the subprime scandal — and the case against him was one of the few the government has brought in the wake of the financial crisis. But almost on the eve of trial, the two sides announced that they’d settled, with Mozilo agreeing to pay a $67.5 million penalty and reparations to investors, and accepting a permanent ban from serving as an officer or director of a public company. (Sambol and Sieracki agreed to far lesser penalties.)The settlement makes sense for both sides. At the heart of the case was the SEC’s contention that the men didn’t tell investors the truth about Countrywide’s exposure to risky mortgages. But however much we may want to lay the blame for the crisis at Mozilo’s feet — at anyone’s feet! — the government didn’t have a rock-solid case. At the same time, the widespread public outrage, along with some damning e-mails, means that the former executives didn’t want to risk a trial.In any event, even a trial might not have brought out the real story of Angelo Mozilo, the butcher’s son from the Bronx, and the company he built — his “baby,” as he referred to Countrywide. Far from founding subprime lending, Mozilo’s Countrywide played catch-up to those really at the vanguard. Nor did Mozilo’s flaws include any callousness about homeownership.He was a true believer.No, Mozilo’s fatal flaws were different. One was a desperate hunger to be No. 1, which led Countrywide into a race to the bottom as the mortgage market spiraled out of control. The other was an unwillingness to relinquish control of his baby, which led to an upheaval in Countrywide’s executive ranks at the worst possible time. In other words, the real story of what went wrong at Countrywide is a classic business tale of self-delusion, betrayal, and ambition gone awry. –Bethany McLeanWhat follows is excerpted from All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera.The birth of mortgage-backed securities didn’t change just Wall Street. It changed the mortgage business on Main Street too. Mortgage origination — that is, the act of making a loan to someone who wants to buy a home — had always been the province of the banks and the S&Ls, which relied on savings and checking accounts to fund the loans. Securitization mooted that business model. Instead, securitization itself became the essential form of funding. Which meant, in turn, that all kinds of new mortgage companies could be formed — companies that competed with banks and S&Ls for mortgage customers, yet operated outside the banking system and were therefore largely unregulated. Not surprisingly, these new companies were run by men who were worlds apart from the local businessmen who ran the nation’s S&Ls and banks. They were hard-charging, entrepreneurial, and intensely ambitious — natural salesmen who found in the changing mortgage market a way to make their mark in American business. Some of them may have genuinely cared about putting people in homes. All of them cared about getting rich. None of them remotely resembled George Bailey.Countrywide Financial, co-founded in 1968 by Angelo Mozilo and David Loeb, was by 1992 the largest originator of single-family mortgages in the country, issuing close to $40 billion in mortgages that year alone. Just as rising rates had crushed the S&Ls a decade before, so did falling interest rates now turbocharge Countrywide’s growth. Lower interest rates helped more people afford homes. But Countrywide began advertising a technique that allowed people who already owned their home to take advantage of lower rates. Refinancing, it was called.By 2006, there was a distinct Dr. Jekyll and Mr. Hyde–like quality to Angelo Mozilo. The good Angelo had been warning for a surprisingly long time that his industry was heading into dangerous territory. “I’m deeply concerned about credit quality in the overall industry,” he said in the spring of 2005. “I think that the amount of capacity that’s been developed for subprime is much greater than the quality of subprime loans available.” A year later he said to a group of analysts, “I believe there’s a lot of fraud” in stated-income loans. And he flatly told CNBC’s Maria Bartiromo that a housing recession was on the way. “I would expect a general decline of 5% to 10% [in housing prices] throughout the country — some areas 20%. And in areas where you have had heavy speculation, you could have 30%,” he said.The bad Angelo insisted that none of this would be a problem for Country wide. Countrywide wasn’t just some fly-by-nightsubprime lender; it was “America’s No. 1 home loan lender!” Mozilo and other executives repeatedly stressed the high standards that Countrywide used to make its mortgages. Country wide’s “proprietary technology” would help it “avoid any foreclosure,” Mozilo told investors, according to the Los Angeles Times.Inside Countrywide, however, Mozilo was not so sanguine. In the spring of 2006 he wrote an e-mail describing Countrywide’s 80/20 subprime loan as “the most dangerous product in existence and there can be nothing more toxic.” Around the same time, Mozilo sent another e-mail saying that he had “personally observed a serious lack of compliance within our origination system as it relates to documentation and generally a deterioration in the quality of loans originated versus the pricing of those loan[s].” He clearly seemed worried.The discrepancy between private worry and public proclamation would later cause the SEC to charge Mozilo and several of his top aides with fraud for not disclosing Country­wide’s growing risks to investors. In Mozilo’s case, the government also charged him with insider trading: From November 2006 through August 2007, he got total proceeds of almost $140 million from cashing in stock options. A judge overseeing a class-action lawsuit filed against Countrywide wrote in one ruling that it was “extraordinary” how the “company’s essential operations were so at odds with the company’s public statements.”There is little question that the money, and the accolades, had come to matter too much to Mozilo. And yet it’s unclear whether Mozilo was, in fact, trying to deceive Countrywide’s investors, or whether he was so desperate to win the market share battle that he simply couldn’t see the ultimate cost of the bad loans Country wide was making. He remained, quite simply, the truest of true believers, both in his company and in the transcendent virtue of subprime loans Countrywide made. He used to say that if 10% of subprime borrowers defaulted, that meant 90% were paying their mortgages on time, every last one of them a borrower who wouldn’t have otherwise had a shot at the American dream. “Angelo — he totally believed,” says a former executive. “He’d say, ‘When I look a home owner in the eye, I can tell if they’ll pay.’ We’d say, ‘Angelo, we don’t even do a personal interview anymore — would you stop saying you can see it in their eyes?’”As for Countrywide, Mozilo was convinced that it had become so big and so strong that it was impregnable. By 2006 it ranked 122 on the Fortune 500, with $18.5 billion in 2005 revenue, $2.4 billion in profits, and a mortgage-origination engine that had generated a staggering $490 billion in loans. Surely, a company with that kind of financial might could weather even a severe housing downturn. It might even help Countrywide in the long run, by putting some of its subprime-only competitors out of business. During an investor presentation in 2006, Mozilo read the names of some of the companies that had exited the business: Great Western, Home Savings, GlenFed, American Residential, and others. “These are the very ones that equity analysts told me that I should be fearing … all gone,” he said. “And 10 years from now when we read this list, you’ll see that most of the players today will be gone. Except for Country wide.”Yes, Mozilo saw that Countrywide was making some risky loans, but what he didn’t see — what he couldn’t see — was that these loans could make his company every bit as vulnerable as the competitors he disparaged. “If you’re a true believer, you can ignore things you shouldn’t ignore!” says one former Countrywide executive. “That was Angelo Mozilo’s problem.” Another puts it a little differently: “He’s a great salesman, and great salesmen are often the guys who get sold.”Like other mortgage originators, Countrywide kept the riskiest piece of a securitization, the residuals, on its own balance sheet. By the end of 2006, Countrywide had $2.8 billion worth of residuals on its balance sheet, representing about 15% of its equity. The company’s internal enterprise risk-assessment map — a key risk report — was flashing orange.Then, starting in 2005, Countrywide began to keep both pay-option ARMs and a chunk of home-equity loans — both the loans themselves and the residuals from home-equity securitizations –on its balance sheet as well.In theory this made sense. Country wide wasn’t just a mortgage shop, dependent on the vicissitudes of the mortgage market — it was a financial institution that could thrive in all markets. The rationale was that while there would be some delinquencies, the income stream from these loans would provide stability during tougher times. But, of course, that depended on the quality of the loans.By the end of 2006, Countrywide had $32.7 billion worth of pay-option ARMs on its balance sheet, up from just $4.7 billion at the end of 2004. As Mozilo later wrote in an e-mail, “We have no way, with any reasonable certainty, to assess the real risk of holding these loans on our balance sheet … The bottom line is that we are flying blind on how these loans will perform in a stressed environment.” The risk of Countrywide’s dependence on the market could be mitigated if it were tightly managed. But the more loans and residuals that were put on Countrywide’s balance sheet, the harder that became.If the market ever got spooked about Countrywide’s health — if, say, investors began to question the value of the residuals or the loans on Country wide’s balance sheet — and shut off the supply of cash, Countrywide could be in jeopardy. Says an analyst: “I told Angelo that his Achilles’ heel was funding. In his typical way, Angelo said, ‘You’re all wrong.’”On July 24, 2007, two weeks after the rating agencies made their first big downgrade move and one week before the bankruptcy of the Bear Stearns hedge funds, Countrywide announced its results for the first half of the year.In a last, desperate grab for market share, Countrywide had waited until March 2007 to stop offering “piggy back” loans that allowed borrowers to purchase a home with no money down. As other, weaker correspondent lenders — those that made loans themselves but then sold their loans to bigger lenders — began to go under, Countrywide ramped up its business of buying loans. Since Countrywide was no longer entering into agreements to sell its loans before they were made or purchased, the company was bearing all the risk that the market would crack on its own books.The rot Mozilo had long insisted wouldn’t infect Countrywide had started to spread. Although the company announced a profitable quarter, investors were shocked to hear that its earnings had declined for the third quarter in a row on a year-over-year basis — and that delinquency rates on Countrywide’s subprime mortgages had more than doubled, to 23.7%, from less than 10% at the end of March.Delinquencies in prime mortgages — prime mortgages — also spiked. And the company revealed that it was taking several other hits, including $417 million worth of impairments, mostly due to declines in the value of home-equity residuals, and another $293 million in losses in loans held on its balance sheet.“We are experiencing home price depreciation almost like never before, with the exception of the Great Depression,” said Mozilo on the company’s conference call that day. Morgan Stanley analyst Ken Posner was startled by the news. “That is just not a charge-off ratio one would expect for a — at least for an old-fashioned prime portfolio,” he said on the conference call. “Countrywide is a mortgage supermarket,” responded chief risk officer John McMurray. “So it is my belief that the portfolio that we have for the most part is going to be a good reference for what exists on a broader basis.”At another point during the conference call, McMurray noted, “So the way I think about prime is that it covers a very vast spectrum …” The implication was clear. Countrywide was acknowledging that prime and subprime weren’t as clearly delineated as most had believed. While investors who dug through the prospectuses for Countrywide’s mortgage-backed securities might have known that, it came as a shock to many. McMurray also had two messages that were contrary to everything Mozilo had preached over the years. “Leverage at origination matters,” he said. “More leverage means more serious delinquencies.” That is, the more debt the customer borrowed, the more likely he was going to default. And he said, “Documentation matters. The less documentation, the higher the serious delinquency, all else equal.”That day Countrywide’s stock fell more than 10%, to close at $30.50.Most companies file their official quarterly documents with the SEC several weeks after announcing their results to Wall Street. Thus it was that on Aug. 9, several weeks after its disastrous conference call, Countrywide filed its quarterly report with the SEC. In it Countrywide cited “unprecedented market conditions,” and wrote that while “we believe we have adequate funding liquidity … the situation is rapidly evolving and the impact on the Company is unknown.” The next day Countrywide held a special board meeting, the board members participating by phone.Countrywide had always assumed that in desperate times it would be able to pledge its prime mortgages as collateral for a loan. But they couldn’t. Wall Street firms “in almost every case had a very large exposure to mortgages,” as Countrywide treasurer Jennifer Sandefur later put it, and they didn’t want more. Plus, everyone was suddenly asking Wall Street for money. “It was an Armageddon … scenario,” Sandefur said. “It was — you know, a worst-case scenario of kind of epic proportions.”As soon as he read Countrywide’s filing, Kenneth Bruce, a Merrill Lynch analyst who followed the company, knew that it was at risk. “LIQUIDITY IS THE ACHILLES’ HEEL,” read the headline of his report to his clients. “We cannot understate the importance of liquidity for a specialty finance company like CFC,” wrote Bruce. “If enough financial pressure is placed on CFC” — Countrywide’s ticker — “or if the market loses confidence in its ability to function properly, then the model can break.” His shocking conclusion: “[I]t is possible for CFC to go bankrupt.”Within days, Countrywide drew down its entire $11.5 billion credit facility — an obvious sign of desperation. It also tried to get the Fed to use its emergency lending authority, but the Fed refused.On Aug. 23, 2007, shortly before the market opened, Countrywide announced that Bank of America (BAC) would invest $2 billion, giving the market the confidence that Countrywide had access to the deep pockets it needed to keep running. (The bank had loaned Mozilo $75,000 in 1969, allowing him to start up Countrywide.) In an interview with CNBC’s Maria Bartiromo, Mozilo blasted Bruce’s report: “[T]o yell fire in a very crowded theater where you had, you know, panic was already setting in … was totally irresponsible and baseless.” He added, “At the end of the day, we’re the only game left in town.”After watching Mozilo, Kerry Killinger, the CEO of Washington Mutual, sent an e-mail to Steve Rotella, WaMu’s chief operating officer. “By the way,” he wrote, “that great orange-skinned prophet from Calabasas was in fine form today on CNBC. He went after the analyst at Merrill, predicted housing would lead us into a recession, said the chance of CFC bankruptcy was no greater than when the stock was at 40, and said, ‘What doesn’t kill us makes us stronger.’ He continues to give the class-action lawyers good fodder for their stock-drop lawsuits.”In his inimitable way, Mozilo tried to fend off the inevitable. In the fall of 2007, Countrywide hired a public relations firm to help launch a “game plan to regain control of the agenda,” according to a memo obtained by the Wall Street Journal. Although the memo was meant to serve as talking points for another top Countrywide executive — Drew Gissinger — the pugnacious tone had all the earmarks of Angelo Mozilo.“Our position in the industry makes us a huge and very visible target,” the memo read. “[W]e’re being attacked from all sides today in large part because we’re No. 1. Not just No. 1 overall, but for the first time in mortgage banking history, we’re No. 1 in each of the 4 major divisions — Wholesale, Retail, Correspondence, and Consumer Direct. This is what makes us such a huge threat to our competitors.“[I]t’s gotten to the point where our integrity is being attacked,” the memo continued. “NOW IT’S PERSONAL! … WE’RE NOT GOING TO TAKE IT.” It ended by asking Countrywide’s employees to sign a pledge that they would “protect our house” — that is, defend the company from the growing storm of accusations about its lending practices. The stock continued to fall.In January 2008, Countrywide hired Sandler O’Neill, a boutique investment bank, to explore its options. According to one person who was there, Countrywide CFO Eric Sieracki presented a “base-case scenario,” a “stress scenario,” and a “severe scenario.” Jimmy Dunne, Sandler’s blunt CEO, dismissed the base-case scenario out of hand. What was coming was likely to be even worse than Countrywide’s severe scenario, he said. Countrywide needed to sell. And the best — maybe the only — buyer was Bank of America. “Ken Lewis, when he covets a target, cannot say no,” Dunne said. (Lewis, the CEO of Bank of America, would become infamous for buying Merrill Lynch during the height of the crisis in a deal that was surrounded by controversy and criticism.Ultimately, that acquisition would cost him his job.) Says one person who was there: “Mozilo and all these guys, they thought they were making widgets. They got too far away from understanding the real risk in the balance sheet. Even at the end, they were saying that things were okay. They believed it. They were crazy.”In January 2008, Bank of America acquired Countrywide for $4 billion; less than a year earlier its market capitalization had been more than six times that amount, at nearly $25 billion. During the second half of 2007, Countrywide took $5.2 billion in write-downs and increases to loan loss reserves, according to a shareholder lawsuit later filed against the company. The write-downs essentially wiped out Countrywide’s earnings for 2005 and 2006.Just before the acquisition, Mozilo told investors, “I believe very strongly that no entity in this nation has done more to help American homeowners achieve and maintain the dream of homeownership than Countrywide.”http://m.washingtonpost.com/business/economy/jpmorgan-close-to-13-billion-deal-with-justice/2013/10/19/7f51c918-38f8-11e3-80c6-7e6dd8d22d8f_story.htmlJPMorgan agrees to tentative $13 billion settlement with U.S. over bad mortgagesAs a result of bailing out a bank that wrote bad loans, JPMC was fined, in what some describe as "extortion".Why did politicians do this? How careless was this? Here is a detailed explanation with graphs and technical reasons for this self-inflicted wound to our economy.Look into the "Community Reinvestment Act of 1977" for clues, and the genesis of this "crash".http://www.sjsu.edu/faculty/watkins/subprime.htm