Lets discuss how EVIL Debt is!!!!

[moparfreak360]

Pharm u missed what I was trying to say.... have I overextended? No I make good money and can afford my mortgage......do I wish at times my morgage was slightly lower? Yea......I think the OP may be saying the same thing.......its not that u CANT pay the debts, its that once u make a decision to be in debt be it for a house or whatever, or pretty much stuck with the same paying job u have............

Example: i work away from home and my wife stays at home with our baby and takes classes.... if something happened to her health wise and I NEEDED to be around closer to home for my family, my hands would be tied somewhat due to the bills I have....maybe I couldn't get a job at home that pays what I get paid now....and trust me, I couldnt where I live.....

That's why I think its kind of a blanket statement to say that debt cannot change your way of life.. I'm as financially responsible as they come, ( my dad taught me such things from young age) but you have to look at the picture of WHAT IF........


Sometimes I feel like I make sense in my head and not in my words lol

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[Crazytall]

10 years ago, when I was 25 I had no debt and a nice savings account. I never used credit cards and bragged about how I would never be in debt. Now 10 years later Im over 20k in debt. Funny how things that are out of your control can effect you.

 

[Pharm_Fed]

Pharm u missed what I was trying to say.... have I overextended? No I make good money and can afford my mortgage......do I wish at times my morgage was slightly lower? Yea......I think the OP may be saying the same thing.......its not that u CANT pay the debts, its that once u make a decision to be in debt be it for a house or whatever, or pretty much stuck with the same paying job u have............

Example: i work away from home and my wife stays at home with our baby and takes classes.... if something happened to her health wise and I NEEDED to be around closer to home for my family, my hands would be tied somewhat due to the bills I have....maybe I couldn't get a job at home that pays what I get paid now....and trust me, I couldnt where I live.....

That's why I think its kind of a blanket statement to say that debt cannot change your way of life.. I'm as financially responsible as they come, ( my dad taught me such things from young age) but you have to look at the picture of WHAT IF........


Sometimes I feel like I make sense in my head and not in my words lol

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That's my whole point brother. I work as a mechanic so my pay can cary greatly from week to week. There are weeks I make $3k+ and there are weeks I only make $1500. It all depends on how busy we are. So do I base my budget on the hopes that I make $2500 a week and pray that we are that busy EVERY WEEK, or do I base my bills on something much lower, like $1500 a week so I know I can pay them and then when I make more than that, it's just gravy?

And while my pay actually varies the same principle applies. If you make $100k a year, but base your bills off a salary of $60k a year, then it becomes much easier to switch jobs, take time off, adapt to whatever comes up, etc.

THAT was my point

 

[zee-man]

It is not the lenders or debtors fault that you owe money. Just like its your job to go to work every day and perform your role, it is their job to lend money and then collect on that debt. It is also their job to try and make things work to make the sale.

It is YOUR responsibility to decide whether the offer is acceptable, you can handle the additional debt, and then to pay it off.

Instead of being negative Im going to provide you solutions to get back in the black/green and out of the red.
1. Figure out your monthly expenditures. What do you have to pay for necessities, utilities, etc.
2. Once you know1. Calculate how much extra you have. Use that to pay down your highest interest first. Usually credit cards. Once they are paid off stop using them.
3. Put extra funds towards your big long term loans, like mortgages. You will pay it off years in advance saving thousands in interest and getting debt free faster. There are online calculators to show how great this is.
4. Dont buy a brand new vehicle every few years or once youve paid yours off. The vehicle still works looks good and you now have more money to put elsewhere.
5. Once you get rid of easy debt, take extra funds and save a nest egg for a rainy day. Look atnnumber 1. That will be the base for the amount you puut in savings if youd lose your job. Based on your tolerance for risk and how quickly you could find a new equally paying jb should dictate whether you want 1, 3, or 6 months worth in savings. I recommend 3-6.
7. Now that you have a nest egg work on saving for the future. Look into a Roth IRA. Tax free investing. If you already have a 401k make sure youre matching yourcompany to get the maximum they contribute. After that either invest to your own max, or do the Roth IRA.

Enjoy and good luck. Youre no longer a slave to the financial world.

 

[BigNJ]

This is a very multi-headed topic.

Debt can occur due to many reasons, and not necessarily a person's fault.

In most cases, people get in debt because of a bad habit such as gambling, drugs, etc... However people also get in debt because of a situation that they have no control over, eg: illness, loss of job etc....


Now granted, most people spend what they don't have, i.e. credit cards, loans, car loans..... those people usually the ones who live paycheck to paycheck and have no idea how to be financially responsible.

You would be surprised how many people would rather spend what little they have on steroids, supplements or drugs, whatever the addiction is.

I know lots of people who work very hard, they are good people, but they waste all their money on for example bodybuilding crap, while they still live in their parents home.

I know people in their 40s who are like that, I know kids who are like that.

If people don't take responsibility early in life and learn to save their money rather than spend it, maybe people wouldn't be in much debt.

How many people here percentage wise have any decent savings?

My guess is that the number is pretty low.

And those are the ones who will probably never be able to save.

 

[highergame]

very good post I have been a mortgage broker for over 7 years and let me tell you after pulling credit report after credit report. I'd say almost 90% of our nation lives way beyond there means and is living paycheck to pay check. I just don't see the reason It's made me want to drop it all move to a beach some were in south America and live off very little and just enjoy my life with my family. I mean lets face it America isn't the place it used to be anyways.

 

[moparfreak360]

Smart thing is if that bank says u can afford X amount, don't believe them. Go wayyyyyyyy less then their "accepted" amount based on your salary......because in the end its not the bills that get you, its the unexpected expenses........stuff breaking down ext...........yes pharm I do understand what you are saying and I agree with u... some people just hear what the bank says though and don't foresee the big picture

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[anarchocapitalist]

A large part of the problem is the central banksters keep the interest rates artificially low which encourages spending rather than savings. We falsely measure the health of the economy on spending (GDP).

Also when the government prints money (inflation) people are more likely to want to get rid of their dollars in exchange for things since prices rise.

The soln of course is the END THE FED and the FED GOVT.

 

[tree33]

Wow, amazing how much I got bashed for making a post about the evils of Debt. I have some debt, but not a lot. I was trying to make a broad statement by saying that when you are in debt, then you potentially become a slave to it. I threw out some small examples of how it can happen.

standard donkey: I am responsible. I have no credit card debt, 1 mortgage and 1 car payment, and its less then a 1/4 of what I make. That is not the case for most people that's the point I'm trying to make.

burst: I was in a hurry when I wrote that. I never said it was the banks fault. I said debt is evil and can enslave you. Try reading what I wrote next time before making comments.

 

[warrenpeace]

No, we all don't. That's just a cop out to make yourself feel better. My wife and I are very fiscally responsible, and have never needed anyone to bail us out. If we can't afford something, we don't buy it. Don't spend money on gear if you don't have enough for your mortgage, and don't buy new clothes if you need to pay the power bill. Pretty simple if you ask me.

Maybe the people whining about debt were let out into the world having no clue what RESPONSIBILITY it.

And PeterBobJohn, I see where you're coming from with the lender:lendee:redatorrey analogy but I disagree. The bank doesn't coerce anyone into signing, doesn't recruit people for loans, etc. A person walks in with the intention already rooted. It's not the bank's job to teach everyone that comes through the doors about finance and responsibility, that's a parent's job...or worst case, *gasp*, an individual's own job. That whole mentality is the reason we have much bullshit is government. People want someone else to tell them what to do instead of putting in the work to figure it out themselves.

Again, debt isn't evil...people are just stupid.

I take it you haven't had kids? I'm in the same boat you are, always been rather prudent with my money, but friends with kids haven't had the luxury. It all adds up.

 

[Pharm_Fed]

I take it you haven't had kids? I'm in the same boat you are, always been rather prudent with my money, but friends with kids haven't had the luxury. It all adds up.

No kids here. That's a legitimate point though. I'm sure that does take a lot of planning.

 

[moparfreak360]

Well kids are expensive....I have 3 (2 step girls and 1 biological son).....in reality though if you arent in the financial state to have children, it would be irresponsible to try and have kids.

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[richiec]

Not everyone who needed bailing out was an idiot, the banks were a part of it as well. There were many instances of predatory lending, hence The Truth In Lending Act which requires that all consumers be provided with accurate information concerning the cost of credit and that such disclosures are provided in a timely manner and disclosed using a
special format to ensure the disclosures are clear and conspicuous.

You have somewhat of a point, BUT, when someone takes a loan for $200k and is making $10/hr who is responsible for this? Sure, the finance guy should be talking to them about worse case scenario (losing job etc and making payments), the realtor should be showing them homes that are more in their price range etc. At the end of the day, the person who signs the contract is responsible, simple as that.

If you make $3,000/month as a family and your mortgage is $1,250 you should walk away and find a more reasonable home. However, people didn't do that, they signed away. Then one lost their job and income is cut in half, enough to cover the mortgage and now the home is foreclosed. The reason why we are in the situation we are in now is one word, GREED. When my wife and I were looking for our home, our realtor was a friend. We gave her our price range and she kept showing us homes higher than our price range. And this is a FRIEND! Realtors want to make more money, finance people want to make more money, Wall Street guys want to make more money etc etc

I'm an insurance agent and I have to sell policies to make a living. BUT, I sell a policy that is good for what people can afford. NOT the most expensive and not the cheapest, I try to do what's best for my customer.

We, as a society, have passed the blame card around for far to long. When my wife and I signed the car loan docs and the mortgage docs, we agreed to pay them on time every month regardless of our job status. We took out enough that if one of us lost our jobs we could still pay all the bills. I wish we hadn't taken out a car loan, but that's a lesson learned! I signed the papers and I take responsibility for it, I just wish more people would do that and stop blaming everyone else. The banks did some real shady stuff, but don't dismiss the people who signed these loans responsibility in this matter

 

[PeterBobJohn]

You have somewhat of a point, BUT, when someone takes a loan for $200k and is making $10/hr who is responsible for this? Sure, the finance guy should be talking to them about worse case scenario (losing job etc and making payments), the realtor should be showing them homes that are more in their price range etc. At the end of the day, the person who signs the contract is responsible, simple as that.

If you make $3,000/month as a family and your mortgage is $1,250 you should walk away and find a more reasonable home. However, people didn't do that, they signed away. Then one lost their job and income is cut in half, enough to cover the mortgage and now the home is foreclosed. The reason why we are in the situation we are in now is one word, GREED. When my wife and I were looking for our home, our realtor was a friend. We gave her our price range and she kept showing us homes higher than our price range. And this is a FRIEND! Realtors want to make more money, finance people want to make more money, Wall Street guys want to make more money etc etc

I'm an insurance agent and I have to sell policies to make a living. BUT, I sell a policy that is good for what people can afford. NOT the most expensive and not the cheapest, I try to do what's best for my customer.

We, as a society, have passed the blame card around for far to long. When my wife and I signed the car loan docs and the mortgage docs, we agreed to pay them on time every month regardless of our job status. We took out enough that if one of us lost our jobs we could still pay all the bills. I wish we hadn't taken out a car loan, but that's a lesson learned! I signed the papers and I take responsibility for it, I just wish more people would do that and stop blaming everyone else. The banks did some real shady stuff, but don't dismiss the people who signed these loans responsibility in this matter

Yes, as I said you cant paint in such broad strokes when you categorize people as either to blame or not to blame.

 

[anarchocapitalist]

Clearly if no one defaulted on their mortgage the housing bubble would not have collapsed.

Stating that we are responsible for our own actions getting into debt is self evident.

I think this is missing the forest for the trees.

The big picture is that politicians promised affordable housing and used government to made laws and created policies that distorted the natural signals from the free market. When government distorts these natural signals homeowners & business owners make malinvestments.

A bubble collapses. Thats the nature of things.

Yes wallstreet and banksters were drunk. But who bought the alcohol? The federal reserve and the government.

 

[Incognito1]

Consumerism is the true evil.

If most people didnt secome to consumerism, they wouldnt be in the situation they are.
Debt is fine providing that you look at it correctly and make your money do the hard work
I simplified my life about a year ago, constantly asking myself whether I need that object or whether I want it. Most of the time its a want. I have now shifted my thought process so much that I will have my home paid off in 5 years time (im 33) along with alot of other investments.
I do work for big business, but due to my change in thought processes I dont by any means believe that I am chained to my work like some do.

 

[anarchocapitalist]

^ What made America great was savings and the accumulation of capital for production.

Whats destroying America is spending, the consumption of capital, and service jobs.

Rather than making cars and selling them overseas Americans are making tanning salons and selling to each other.

 

[timmy123]

Debt is something I have always been scared of. Growing up my parents always had debt they couldn't pay off. The only thing I owe money on is a car and house and I only purchased a house and car that I could easily afford and still save a good amount of money monthly

 

[jockhead]

Debt is something I have always been scared of. Growing up my parents always had debt they couldn't pay off. The only thing I owe money on is a car and house and I only purchased a house and car that I could easily afford and still save a good amount of money monthly

I'M on the same page bro!

 

[jockhead]

Dave Ramsey is a great resource.