By Porter Stansberry in the S&A Digest, in response to an e-mail from Colleen Fuglaar:

"According to your many editorials on the subject, I'm one of the deadbeat borrowers because I've applied for not one, but two, loan modifications. I can't handle my debt so I'm a deadbeat, right? Wrong. I've never drawn on a line of equity in my life and as you can see from below my expertise is real estate. I have a master's from USC in development as a matter of fact and (probably) know much more about how to evaluate real estate values than anyone on your newsletter.

"I put 20% down on one loan and 25% down on the other one, both high-priced properties in expensive markets. One was bought at auction in a market that continued to plummet after it had already declined 2 years. Even my boss, a millionaire many times over (and he seldom touches stocks) told me at the time it was a smart buy.

"Bottom line is that in real estate, just as in stocks, timing is everything. I'm as much a victim of market forces beyond my control as any corporate accountant with a 401K and a shocked look on his face. There are many, many, many honorable people out there like me trying to meet their obligations who are getting virtually no help from anyone. Not from the government that partly caused this problem, not from the media that loves to hype one side, and not even from supposed 'experts' whom I pay a goodly sum for expensive advice to help me navigate these troubled financial waters.

"Broaden your horizons. Your readers will benefit from it. I suspect if you look at the actual foreclosure numbers in depth you'll find that many of the NODs waiting in the wings are being sent to market victims, not greedy and inconsiderate credit hounds." - Paid-up subscriber Colleen Fuglaar, vice president, development, RTI Properties

Porter comment: As long as you believe you're a victim, you won't learn what life is trying to teach you here, Colleen. There's a tremendous difference between the actions you took and equity investors with their 401ks. It's simple: 401k investors didn't borrow money from other people and then refuse to pay it back. You did. That's why you're a deadbeat.

You took a risk with other people's capital. Once you do that, you're not working for yourself anymore. You're working for your creditors. Your first obligation is to pay back the money you've borrowed with interest. And apparently, you can't. So let's be clear about who the victim is here: Your creditors are the victim of your bad decisions. Blaming the lender who gave you the money is preposterous - these folks trusted you, backed you, and were willing to take a chance on you. Now, you're saying they've exploited you and you're a "victim." Give me a break.

You act as though someone came into your house one night, put a gun to your head, and forced you to sign a contract on two expensive condo buildings you couldn't really afford. Of course, that's not what happened. And we don't have any sympathy for you. Don't borrow the money if you have any doubt about your ability to pay it back. And, yes, the government certainly is to blame for creating an environment where too many people like you could borrow money to buy real estate. But no agent of the government forced you to make this or any other deal. You don't get a free pass from taking responsibility for your actions just because a lot of other people made the same bad decision. And you don't get a free pass because you have a degree in real estate "development." In fact, claiming to be an expert in something you've just bankrupted yourself doing is... delusional.

Finally... I must say... I got a real charge out of someone like you telling me to "broaden" my horizons. You might recall that I decided to fold our Real Estate Investor newsletter in 2006 because I knew there was going to be a disaster in U.S. real estate. You might also recall our numerous specific warnings about the condo market in particular. While I was telling folks to get out of the U.S. real estate market, I was working with Doug Casey and his group to select and then promote the Estancia Cafayate, a luxury project in Argentina, which has worked out very well. Also, I've been heavily involved in Nicaragua deals that have been very lucrative.

I didn't learn about real estate at USC. I learned from two masters - Bill Bonner and Doug Casey. These guys and their partners have made hundreds of millions of dollars in real estate over the last 30 years. The secret? It won't come as a surprise to any of our subscribers: We only buy real estate we can afford. We never borrow a penny. And we work hard to improve the perceived value of the land.

You're in quite a pickle, Colleen. You've dug a big hole for yourself, and you don't know the first thing about how to get out of it. It might take you a while to realize what you have to do. It's not easy. But it is simple: From this day forward, always take complete responsibility for your decisions. From this day forward, live up to all of your promises. Start by repaying every penny you owe - no matter how long it takes. Doing this hard work will teach you a lesson you need to learn about the risks of borrowing money. And the risks of buying expensive real estate. But... once you've really learned those lessons, your life will be incredibly enriched. You'll make far better decisions. And you'll attract the goodwill of everyone you meet.

Crux note: The S&A Digest comes free with a subscription to Porter Stansberry's Investment Advisory. In this month's edition, Porter is recommending a stock that he believes to be his best pick in three years. Shares will have to triple in order to reach their intrinsic value. To learn more, click here...

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