Thread: Investing 102
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Old 02-16-2018, 08:03 AM
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GregWeld GregWeld is offline
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Originally Posted by AU Doc View Post
Debt is an interesting topic for me at the moment. I'm pushing 40, and I see a lot of people my age and younger that are working furiously to get out of debt (myself included). A lot of people older than me have already made it there. I don't know if I see more of it because it's my mindset, or if there are more people who look at debt differently than we did 20 years ago, or differently than their parents did. I've never liked debt, but there have been times in my life that I thought it was a necessity.

I've also talked to a lot of people in the their mid-twenties that seem to be a lot smarter about debt than I remember people being on average 10-15 years ago. Most of these kids are actively saving, buying used cars and driving them longer, buying reasonable homes, etc., etc.

I say all that to say that I've been having some of the same thoughts that Greg mentioned, though not nearly as coherent or well formed , but in my little bubble, there are fewer and fewer people taking on debt. Even companies are buying with cash. At least equipment valued in the vehicle range down. That's despite money being so "cheap" these days.

The housing market is another oddity here. There aren't enough contractors to keep up with the demand for new home construction, and the "contractors" have come out of the woodwork. It's at the housing bubble pace here with no signs of letting up. I think people are just buying less house with the new mortgaging rules.



The "new" mortgage rules are onerous.... I have several friends that are real estate agents. I hear stories all the time about the perfectly good credit people have and perfectly good down payment - and the fighting they have to go thru to get their mortgage approved.

Debt -- AKA "leverage" isn't bad in and of itself... but most times it's used and abused. People use debt to raise their standard of living.... to buy things on time they really can't afford ---- and the worst example is --- use expensive debt to buy DEPRECIATING assets. Debt to buy a home - that's okay - debt to start a business - that's okay. Debt to buy a fancy car.... STUPID. Debt for a vacation - DUMB.

That's where people just simply lack discipline. Discipline would have them driving their current car 3 more years - all the while putting what would be the payment, in the bank.... and then paying cash for a car (the version they can pay cash for) and driving it and once again - putting the payment in the bank/market..... Ditto the vacation. If you know you have 2 weeks of vacation and you're going to Hawaii --- and you can't manage your money well enough to be able to put some away to cover that (you have a YEAR!!).... then the last thing you should do is put that on your credit card @ 22% interest rate. OMG....

Personal debt is more about a discussion of "living within your means". You don't buy furniture when you have to make payments on it. #1 that furniture is overpriced junk - and it's not worth tossing it on the curb and you still owe money on it. LOL
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