Investing 102

[AU Doc]

Originally Posted by Vegas69

The recent stats I’ve seen show Americans burying themselves in personal debt not dissimilar to 12 years ago. Student loans being the biggest difference. Kids have giant loan balances to enslave them for a loooooooong time. That’s exactly what all debt is, slavery. You are forced to work to pay it off. It reduces your options and flexibility.

The only debt that may not enslave you is investment debt. Real estate or business, but you can get caught with your pants around your ankles. It best be very optimistic calculated risk.

Originally Posted by GregWeld

Ah yes Todd..... Student debt. In many cases it shows the same brilliant "investment" strategies as many of their other life choices. What do I mean?

Why would someone take out debt to the tune of $100,000 or $200,000 for a job that pays $35,000 a year. Can they not do basic math and realize the burden this is going to be? I don't care what the interest rate is...

That's a good point. The levels of student debt that kids are apparently leaving school with is one of those things that doesn't make sense on such a basic level that I have a hard time believing it's real. I've heard of Music or History majors leaving school with the same sort of debt that some MDs are leaving school with. One of those makes sense to some degree..... The other two not so much.

To be clear, I don't have a problem with studying Music, History, the arts, etc., but I think we are doing students a serious disservice by encouraging them pursue an academic path that will put them in debt for the majority of their adult lives. Further, many of those career paths are extremely difficult to find a job once they leave school.

Colleges pushing these sorts of academic paths reminds me a lot of predatory lending. "Sure, we'll loan you the money even though we know you'll never be able to make the payments." Sounds a lot like, "Sure, we'll prepare you for a career in a market that we know is saturated and never provide the income necessary to pay for that education."