Investing 102

[GregWeld]

Originally Posted by mdprovee

And stay away from credit cards.

Credit cards are the worst thing to ever happen to "money management". The fact that we can "charge" things -- does not mean that we can afford them. It just means that we've successfully managed to defer paying for them. Usually that means then that we charge more than we can actually afford to pay for - which contributes to LESS cash flow each month which leads to more charging!

A very vicious cycle even for rich folks! Rich folk that I know have 100K limits on their cards --- rather than 10K or 1K for the less fortunate... and I know people that have maxed out 100K cards. OMG -- really!! 100K at 18%....

THEY, of course, don't think they're broke because... after all... they're rich. Dude -- if you're rich!?!?! Then pay your balance each month. Otherwise you're IN DEBT.

"Affording something" is being able to pay for it. Right now - all in all done. Don't kid yourself otherwise. Paying "CASH" -- but using the house credit line -- is not PAYING CASH... You're just full of crap and kidding yourself if you think that's paying cash.

I do, however, think that payments and leases are fine --- IF you're saving a large percentage of dough each month at the same time, i.e., You lease a car but you're also contributing $500 or $600 a month to your 401/IRA/ROTH account. Then it's just cash management --- but if you aren't saving money then you're just stalling the debt.