Quote:
Originally Posted by GregWeld
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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Agree on all points. The only things I might change would be to put more stuff in bold
About the only thing I see requiring debt these days is a house on the personal finance side. Then there's startup costs or large capital purchases (depending on your business structure) on the business side. I'm sure there are some circumstances outside the norm that make it necessary, but it's a quick way to get in trouble if you're not careful.
There were several generations that learned to buy it (and that's whatever "it" you want right then) on credit and pay it off when/if you can. Then several generations got to see how that worked out, and I see more and more that are willing to wait a little while and buy it without the debt.