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Why Are Americans So Willing To Get in Debt?
consumerist.com — Why are Americans so willing to do this to themselves? The article explains that as few as 40 years ago, we were a thrifty nation full of "savers," and that banks were focused on whether or not you could repay your loan and not the "fees" they could get from loans before they were sold to investors.
Notyavgkat- 1394 diggs
- digg it
- Cancerkitty, on 07/23/2008, -3/+118I know so many people who do this. It's absurd.
- flickrdoodle, on 07/23/2008, -1/+24Everyone knows people who do this yet hardly anyone admits it.
I was part of the problem and to a certain extent, still am. Until it becomes fashionable to live in a smaller home, drive a less-than-new yet driveable car (or walk and use public transportation) and not give a damn what the neighbors think this will only get worse.
Less is the new more.- TheKingInYellow, on 07/24/2008, -1/+13i'll admit it. fresh out of college i felt the need to continue my extravagant lifestyle of easy come easy go money. i'm regretting it and paying for it...boy am i paying for it.
- 5urr3al5am, on 07/24/2008, -3/+10--just dont live beyond your means--
- CosmicJustice, on 07/24/2008, -2/+7You know what? Do it even though it's not "fashionable".
- GassyTurd, on 07/24/2008, -2/+5Trash your credit cards and get a debit card. Problem solved.
- gandhii, on 07/24/2008, -3/+2You just described all the cool people. The rest of you guys is what we call "yuppy douches".
- gfxlonghorn, on 07/25/2008, -0/+4@GassyTurd
Overdraft fees? Worst then debt... They don't give a ***** how much you go over.
- Tebixan, on 07/24/2008, -3/+58Going into debt for a home, car, or education is okay. Those are investments that should be worth it. The problem is people who use their credit to go on shopping sprees. If you can't pay cash, or at least pay it off at the end of the month, you don't need a PS3.
- CosmicJustice, on 07/24/2008, -2/+29Pay cash for cars. You can do it. Drive your old beater a few more years and make payments to yourself. Let's say you get a new car and the loan is 60 months, don't buy the new car but pay your savings account that same payment for 40 months. You'll have enough to pay cash for new car.
- Tanktunker, on 07/24/2008, -17/+6I really don't, because I have 3 PS3s, as opposed to you, because you have no PS3s.
I made a chart:
PS3s:3------0
--------Me---You - tdogg241, on 07/24/2008, -1/+33A car is not an investment. It's a cost. Going into debt for a car you can afford is fine, but don't fool yourself into thinking it's anything more than a drain on your bank account.
- octavio247, on 07/24/2008, -2/+10going into debt for a house or car is OK IF you buy what you can afford. buying a BMW instead of a Honda Civic can keep you in debt longer. Buying a 4 bedroom house with a pool in a ritzy neighborhood is not Ok if you can't afford it or will cuase you to use credit cards.
- GeorgeStone2, on 07/24/2008, -2/+7I will not buy a nicer car until I can afford to buy it outright.
That is my rule on everything. If I can't own it, I don't want it.
I currently drive a car worth about £2000. I bought it 2 years ago and it's cost me about £800 since then. However the interest from my savings account paid for that.
It's diesel to keep costs down, but that's backfired since now with all the taxes and ***** the government put onto fuel the savings on diesel vs petrol are much lower.
You just need to be careful. - dajuggernaut, on 07/24/2008, -3/+10A car is about as good an investment as spending 5 grand on a stripper named Molly Mounds...
- leapingfrog, on 07/24/2008, -1/+23Since when is a car considered a "good investment"? Most of my investments go up in value, not down.
- Tebixan, on 07/24/2008, -3/+13@Cosmic, tdogg, dajug, leaping
The investment in the car is not the monetary value of it, but the utility of it. Many people need a car to get to work, go to the store, things like that. You're investing in the car with idea that it will allow you to accomplish more with your time. Unless you live in a city with a good public transportation system, owning a car has become almost vital.
I was trying to hold on to my old hunker until I could save up enough to buy a newer car, but the transmission died on me a month or so ago. The car was valued at about $400, and it would have cost me $2000 to fix the transmission. So now I have an auto loan and a 2007 Dodge Caliber - tdogg241, on 07/24/2008, -1/+10@Tebixan: "Unless you live in a city with a good public transportation system, owning a car has become almost vital."
Therefore, it stands to reason that owning a car is a part of your *cost* of living. It is not an investment, by any definition of the word. - crazycraka, on 07/24/2008, -0/+6Guys, I just saved a bunch of money on my car insurance by switching to gieco.. Btw this article sucks, it makes no sense.
- elmetald00d, on 07/24/2008, -2/+4a car is not an investment. ever.
- ShakeWell, on 07/25/2008, -3/+2@ el metald00d
unless it is for your home business, or if you're doing illegal street racing for lots of $$$
never say never - m00n1, on 07/25/2008, -1/+2@TebixanTebixan:
By your definition, most things are an investment. Shoes, clothes, food, all match your criteria. That is a lifestyle decision, not an investment. It may be a very important one, but it's still not an investment. - ammundsen, on 07/25/2008, -4/+1A house and car are not investments unless you run a business from them. They do not generate income. Part of the problem is Americas thinking an investment is the house they live in. And education is a pretty poor investment also. The returns on education are not very good. Particularly past undergraduate degrees.
- Tebixan, on 07/25/2008, -0/+2Okay okay, a car isn't an investment. I was just trying to say it's one of the few things that it's worth going into debt for. I wasn't trying to get into a semantics debate over the meaning of the word "investment"
@ammundsen, so you are saying that a person with a masters degree in mechanical engineering will get less out of his degree than an auto mechanic with a HS diploma?
Also, in normal economic times, a home does generate income for you. Usually they increase in value over time
- quandrum, on 07/24/2008, -7/+9It's not absurd. It's called human. Our psyche's were breed in a time of when we had next to nothing and hording at any cost was beneficial. Behavioral Economics has taught us humans as a group(but not necessarily as individuals) are basically unable to make the correct long term choices. They live for the short term.
What has changed in the last 50 years? The financial system as accrued a greater and great amount of our nations wealth. They ran out of smart, responsible people to lend to so they started throwing it at mid-risk people. And then they ran our of mid-risk people and gave it to high risk people. And then they started throwing it at people without jobs who already had 100's of thousands of dollars in debt. They can't stand to have money not invested in their business.
I fully believe if people had the access to money they do today they did 50 years ago, they would have had the same problem. Or 100, 200 or 1000. Give a human a chance to having something they want with only long term consequences, and most times (or enough times to cause problems) they'll take it.- 5urr3al5am, on 07/24/2008, -2/+5No IT IS absurd, major denial, and very irresponsible. People want things they can't afford, and instead of living within their means they go out and buy-buy-buy. In almost every case, they are agreeing to these crappy 30% interest contracts and they deserve everything they get. The ones that are truly poor and are continuing to be forced downward, that's a different story altogether.
- FriedTurkey, on 07/24/2008, -0/+5Wrong. People who grew up during the Great Depression do have a different mindset. My Grandparents save like misers because they know things can go bad.
- mobislink, on 07/24/2008, -4/+33"The more things you own, the more they own you."
Tyler Durden- Tanktunker, on 07/24/2008, -13/+3He had multiple personality disorder and hallucinations brought on by sleep deprivation, they were both the same guy.
Oh, and spoiler alert. - matroska1, on 07/24/2008, -0/+13Butchered that quote pretty badly, but I'll digg you anyways.
"The things you own end up owning you" - rpgmaker, on 07/24/2008, -1/+9Try living like Tyler Durden and let us know how it works out for ya?
- Tanktunker, on 07/24/2008, -13/+3He had multiple personality disorder and hallucinations brought on by sleep deprivation, they were both the same guy.
- vypergts, on 07/24/2008, -6/+2Social dawinism in action, baby.
- SmpleJohn, on 07/24/2008, -1/+19Google Dave Ramsey.
People feel like they need to live like their parents are right now, but don't realize it took them years to get to that point. I'm 24 and between credit cards, a car and student loans I racked up about $100,000 in debt. It sucks. Started paying it off about a year and a half ago, working 2-3 jobs, cutting coupons, and not buying crap. Paid the car last October, should be credit card free around November and Sallie Mae free in May.
Feels good.- 5urr3al5am, on 07/24/2008, -1/+12You're paying off 100K of debt in two years? At the age of 24? That's a little unbelievable. Good work ethic. Hey more power to you.
- majin23x, on 07/24/2008, -0/+6That's pretty awesome, but anyone can do it. Like he said, Google Dave Ramsey.
- GeorgeStone2, on 07/24/2008, -2/+5My general rule is, if it isn't going to make you money, or help make you money, you don't need it.
I have saved £2000 in the past 4 months thinking like this. - xptoast, on 07/24/2008, -1/+2Reasons we do this or anything else that gives the thought of pleasure to ourselves is because the same reasons a rat will push a button that gives pleasure instead of eating and drinking food until it dies from doing such. Pleasure before life, superficiality before function, etc. Fake tends to win over reality I guess. We are stupid creatures for being such smart creatures. We just get more efficient in screwing ourselves...over.
- digjam, on 07/25/2008, -0/+4Its not absurd..its simple
Before you earn
You want to go to college= Student loan ($30K)
You get a job
You earn money
You want a car to drive to work = car loan ($25k)
You want a TV to relax= credit card ($5000 incl all monthly exp atleast)
You want to eat out on weekened = credit card (same as above)
You want to buy a house (atleast $250k)
There you go ...even before you had your first kid, you already have atleast 300k in debt...even if you want to save ...you get wht..0.25% from chase?
How many savings solicitations you get in mail compared to pre approved cards....that itself answers the question.
- flickrdoodle, on 07/23/2008, -1/+24Everyone knows people who do this yet hardly anyone admits it.
- conostrov, on 07/24/2008, -23/+5The majority of people saving and tight wading isn't good for anyone, neither is continuing this spiral of debt over-load. There needs to be more alternatives for most people than low-yielding savings(minimized even further by inflation) and high-cost compounding debt.
I for one hope then, that this crisis is not addressed simply removing access to people's easy-money line or by taxing wealth to redistribution to government programs.
Rather,
Let's supplement these costs with new avenues of common investment that distributes the wealth generated by high-spending to more stakeholder. We could do with effectively I estimate with ambitious programs like, new dollars as a reverse-tax not debt, and shares rebated to consumers. Too radical to happen anytime soon perhaps, but never say never.- MrSmith34, on 07/24/2008, -3/+7Conostrov..."....redistribution to government programs."
isn't that rather communistic of an idea? I thought the fall of the soviet union proved wealth redistribution doesn't work?
...maybe I've misunderstood you.- conostrov, on 07/24/2008, -4/+4I said, I hope "that this crisis is *NOT* addressed... by taxing wealth to redistribute to government programs."
As to answer your question though, no it did not prove that at all. The Soviet Union wasn't even really a test case for that. Looking around the world there are many highly socialized non communist countries that exist today. Most have economic strengths. And your fooling yourself if you think it was the freedom of the US market that gave it prominence. I also hope though we in North America don't go in the more government direction.
Neither of the programs I mentioned funds or fuels more government, both seek to allow for a freer open market to generate solutions from within.
Inflationary Reverse-tax - addresses a traditional government mandate allowing inflationary banking practices. Banks being given the right to game, lead to a unbalance advantage to their sector over others in addressing inflationary concerns. This gaming hurts an open economy. Reverse-tax removes the mandate, as banker removed it from government (for the same right of abuse reasons) and distributes the advantage to the whole economy allowing for free exchange and more control by the firm and individual.
Shares rebate - recognizes that in a modern economy a consumer in choosing to make a purchase brings more to the table then they are being compensated. And is in a kind an investor in the company, just as someone who stakes their wealth to found and maintain that business, granted not equity so.
If you want to continue to tote the idea that 'consumers are not investors' that they in making a purchase have no right of ownership, and should continue to be a silent stakeholder. That is fair. It has held for many years. I just hope that when the middle class brakes, equity slips, and society division entrench; you consider that perhaps the problem is not 'stupid people' but a gaming of the market by intellectual relics of an old extinct world.
- FredFredrickson, on 07/24/2008, -0/+4Smart people understand that good ideas come from all sorts of places.
- conostrov, on 07/24/2008, -4/+4I said, I hope "that this crisis is *NOT* addressed... by taxing wealth to redistribute to government programs."
- StingingNettle, on 07/24/2008, -2/+5There is an alternative to low yield saving. Its gold and silver. There have been some great gains over the years beating inflation every time, as the FED kept rates to artificially low levels.
- conostrov, on 07/24/2008, -0/+5Do you think then, it is good for an economy if most average-people invest in gold and silver? Not even mentioning how this market has been used to manipulate in the past.
- StingingNettle, on 07/24/2008, -0/+9@conostrov
I think its a good idea to have some parts of your retirement in some precious metals to have a REAL diversified portfolio, and not just being in stocks and bonds.
When the Fed's rate is below the rate of inflation, gold and silver will always do well. - TheKingInYellow, on 07/24/2008, -2/+2i totally agree. take a look at families in the middle east. they don't use banks. they wear their money. need to buy some food...sell a ring.
- minorthreat, on 07/24/2008, -3/+12"The majority of people saving and tight wading isn't good for anyone"
thats about as much as I read before digging you down.... You don't have to do what the ads tell you to. You should only buy what you can afford. Although I would find it pointless to horde money and not spend a dime until I'm 90 years old. I also believe that I should only own the things I have money for.- conostrov, on 07/25/2008, -0/+1I understand, but am sorry you live in such a limited world.
If you had read on, you may have noticed I was not condoning frivolous credit spending nor was I even referring to people personal finical advise[As how can I know your unique situation?]. Rather I was talking about the macro-economical consequences of the naive miserly advice being toss around as fact these days. Indeed implying and predicting, that yes such actions will only negatively effect this society and compound the problems of today. I did so in the hopes of raising some awareness that we need a new type of solution (and introducing some starting points) or we are doomed to the same predictable patterns of idiocy, compound by our greater size and population.
It seem however such sentiments are out of place here, as though my reply was I admit quite possibly wrong, I have as of yet not seen one reply that demonstrates a reading, let alone comprehending of anything I wrote. The symptom of my poor choice of words I am sure :) - minorthreat, on 07/25/2008, -1/+2i just happened to look back as you replied. I did take the time to read your entire post. The wording was the reason you got dugg down. It's not a bad idea, however it is to radical as you suggested.
Oh... and I don't live in a limited world. I'm free man. I could quit my job and travel around for a while.... nothing like being free.
- conostrov, on 07/25/2008, -0/+1I understand, but am sorry you live in such a limited world.
- Anditsonfire, on 07/24/2008, -1/+4"The majority of people saving and tight wading isn't good for anyone"
Only if they do it by putting their cash in a safe in their basement. If they put it in the bank then the bank will lend the money out and that's almost (if not just) as good as if they were spending it.- conostrov, on 07/24/2008, -0/+1You may want to look further at fraction reserve policy as it relates to the economy. If you think the negative effects of saving are mitigated by this system you have one heck of an agenda. If you like me to explain, I'd be happy to in a place more suited to a detailed explanation.
- hmunkey, on 07/25/2008, -1/+1Japan is perfectly fine. They control a tiny island, covered in volcanoes. They have a tiny populations comparatively. They're one of the wealthiest nations on earth. Why? They have a crazy high savings rate.
- MrSmith34, on 07/24/2008, -3/+7Conostrov..."....redistribution to government programs."
- WWFP, on 07/24/2008, -12/+197Because there's no incentive to save. Inflation is higher than the rates banks pay.
- MrSmith34, on 07/24/2008, -4/+63actually wwfp. Paying off credit card debt is like having a guaranteed return of investment by the interest you won't have to pay. this is especially true in a declining economy.
- banmaster, on 07/24/2008, -2/+4How is it a return on investment? If you didn't waste money on crap and charge it to your credit card you'd still have the money and be able to actually make it work FOR you and not do stuff to actively stop it working against you.
Remember, a credit card is really a Debt Card, but you'll never find them marketed as such, if they were nobody would be stupid enough to sign up for one and the poor banks would have to adjust their profits down a few billion. - byronm, on 07/24/2008, -1/+7@banmaster
Credit card debt isn't black and white.
Say you have a house that needs painting and it will cost you 4,500 to get it painted and you simply don't have 4,500 setting around. You put it on credit and pay it off for 13.5% over a few years and your house is painted. Sure, you ended up paying interest but in this case the act of taking on debt will save you over the expenses incurred of not acting. For every year you let you house sit idle without proper paint your asking for damages that would exceed the cost of acting now, not to mention inflation is increasing the cost of goods so if you saved for two years you already blew ~7% because of inflation and you better hope the cost of goods didn't increase and on top of that you better hope you don't have more repairs because you didn't paint for 2 years.
Thats really just a terribly simple example but its the truth. On some projects its worth taking the interest hit now to save before the costs outweigh the benefit of saving and paying cash.
Goes for any investment.. somtimes its cheaper to take a car loan and keep money in savings to pay cash for repairs or vice versa. Its never really black and white unless you like losing money to inflation year after year. - AngelBunny, on 07/25/2008, -1/+2wow scary! I never thought like that. Having an interest rate on your credit card that is around the same as the inflation rate is insane.
- banmaster, on 07/24/2008, -2/+4How is it a return on investment? If you didn't waste money on crap and charge it to your credit card you'd still have the money and be able to actually make it work FOR you and not do stuff to actively stop it working against you.
- digitallysick, on 07/24/2008, -4/+9I totally agree, why save money? so i can get 2% interest from the bank, if i use a credit card, it can be up to 20% how is that fair? I agree, no incentive to save, no way to invest much and make money.
- executorzz, on 07/24/2008, -3/+8If you did some research and pick up some cheap stocks right now you will have an awesome portfolio in 1-3 years.
- Stewdean, on 07/24/2008, -3/+3Two things. Debt costs you. If you credit card is 20% then any money you save earns you 22% more than if you're in debt. Add compound interest on top of that and if you're in debt it's a very very expensive business. You are paying the credit card company hundreds of dollars for nothing.
Also you should be able to get above 2% on your investments. What ever you do STAY AWAY FROM STOCKS AND SHARES. Save and then once you know you can stay out of debt for a while look at sensible things to invest in. - WiretapStudios, on 07/24/2008, -1/+1Or go to vegas.
- CedEx, on 07/24/2008, -5/+9Stay away from stocks and shares? WTF? You can easily make money there if you're not greedy.
Hell, pick the biggest bank and buy their shares right now. If the don't change their dividends, your yield is about 5% or so... in other words, you're guaranteed 5% on your investment on the year.
It's a little more complicated than this, but this is digg and no one wants in depth knowledge anyway. - gandhii, on 07/24/2008, -2/+5CedEx: dugg you down because you didn't give any in depth knowledge.
- KJSatz, on 07/24/2008, -1/+6CedEx: dugg you up because I want your in depth knowledge.
- rpgmaker, on 07/24/2008, -1/+3CedEx: Dugg you down because you don't know how to differentiate "mainstream" diggers from diggers.
- ammundsen, on 07/25/2008, -1/+1The average person should not be investing in stocks. Being long stocks has a pretty poor rate of return. You need to be able to short or use options to make any real money. And I would not recommend bank shares. Sure they are down. But I dont see a bottom. And some will probably be going out of business. The US banking industry is going to get shredded soon.
- Laorir, on 07/24/2008, -1/+44Yes, inflation is often higher than the rates banks pay, but seriously, if you're just throwing all your money into a low interest savings account at any major bank, then you're not saving properly. You want to save a small emergency fund in a high yield savings account (ingdirect) or CD. That won't put you over inflation, but it will bring you closer to keeping pace with it. The rest of it you want to put into stocks or mutual funds which will outpace inflation over time.
Your argument is of course going to be that anyone who invests in this market is an idiot. However, I believe that this is just a normal down time in the economy. People had the same thoughts back in the dot com bust as well and the market rebounded nicely from that. You should invest during these times to get the maximum return on your investment. There's always risks in saving money, but if you do it right, there's a pretty good chance you'll end up making a decent amount of money and usually easily outpace inflation.- Hockey13, on 07/24/2008, -1/+3Laorir, I think perhaps you are missing the point. In an economy that is experiencing inflation (i.e., the value of their currency is perpetually declining), people have a greater incentive to take on more than the efficient amount of risk. Stocks and mutual funds will normally outpace inflation over time (though don't tell this to the people of Zimbabwe, because it's not always true), but consider the risk that is involved with these types of investments. There is no reason why a 60 year-old near-retiree should be investing in/holding stocks if they plan to preserve their capital, but they have little choice if they wish to beat inflation. Inflation and abnormally low interest rates cause people to make risky decisions, some of which pay off, but others screw people. In an economy with zero inflation, people who invest in stocks will be doing so almost entirely based on the fundamentals of the stock market, not on some external desire to use it as a hedge against inflation.
The one caveat to this argument, of course, is that capitalism, despite having many politicians dragging on its coattails, does still work. All it takes for us to bust out of a recession is some technological/strategic innovation (like the internet).
- Hockey13, on 07/24/2008, -1/+3Laorir, I think perhaps you are missing the point. In an economy that is experiencing inflation (i.e., the value of their currency is perpetually declining), people have a greater incentive to take on more than the efficient amount of risk. Stocks and mutual funds will normally outpace inflation over time (though don't tell this to the people of Zimbabwe, because it's not always true), but consider the risk that is involved with these types of investments. There is no reason why a 60 year-old near-retiree should be investing in/holding stocks if they plan to preserve their capital, but they have little choice if they wish to beat inflation. Inflation and abnormally low interest rates cause people to make risky decisions, some of which pay off, but others screw people. In an economy with zero inflation, people who invest in stocks will be doing so almost entirely based on the fundamentals of the stock market, not on some external desire to use it as a hedge against inflation.
- jimmyb3, on 07/24/2008, -1/+13Actually, even Warren Buffett agrees that the best strategy for most investors is to have your investments in a diverse portfolio of index funds. Expense ratio costs are the lowest you can find, the holdings are almost never traded (so other costs like commissions, spreads, etc. are kept to a minimum), and index funds will outperform the overwhelming majority of active money managers over the long term when you factor in costs.
Not saving is a recipe for long-term disaster, plain and simple. You can almost never get rich quickly, but you can definitely get rich slowly. - oldhick, on 07/24/2008, -0/+5Right, because Americans weren't in debt in the mid to late '90s during low inflation...
- filovirus, on 07/24/2008, -0/+21For every $1 contributed to a pretax 401k, you earn about 25% return on your money immediately for deferring the tax to your retirement years. So instead of investing $1, you get to invest $1.25. This does not even take into consideration employer matching.
Stop buying ***** you don't need, get out of debt, then save and invest.- MatthewDuke, on 07/24/2008, -0/+9If people would just max out their 401k each year, they would be millionaires in 35 years. You could start at age 30 and retire at age 65 with $1,116,612 (compound interest at 8%) if you invested the max each year of $6000. That's not including employer matching. I'm not saying it would be easy, it would be $250 per paycheck (pretax), but most American's spend that on beer/cigarettes/eating out, etc. Financial discipline will get you where you want to go - a steak from Applebee's every Friday night won't...
- bobbarkerbilly, on 07/24/2008, -0/+5I used to feel the same way about the 401k plan until I heard economist Teresa Ghilarducci on Fresh Air talking about the 401k.
http://www.npr.org/templates/story/story.php?story ... - byronm, on 07/24/2008, -1/+4@MatthewDuke
Lets not forget a compounded inflation. That 1 million bucks only going to be worth about 185,878.00 30-35 years from now.
Inflation since the recorded start date in 1913 is 1,929% - davewelsh79, on 07/24/2008, -0/+4@byronm
I think your math is off a bit. If the inflation is 1929% since 1913, that's 19.29 in 95 years. The annual rate would then be (1+19.29)^(1/95)-1 = 0.03219 = 3.2%
In 30 years, the inflation would be (1+0.03219)^30-1 = 1.587 = 158.7%
So your $1,000,000 would be worth about $630,000 of today's dollars.
In 35 years, the inflation would be 203.1% and your $1M would be worth $492k
This is all assuming inflation tends toward the long-term average of 3.2% - MatthewDuke, on 07/24/2008, -1/+1@Byronm and BobBarker
So what do you suggest doing with your money? - xptoast, on 07/24/2008, -1/+3This is why I like gold:) It keeps a good standing over time. That and if the economy crashes I would still be safe:-)
- Future2, on 07/25/2008, -0/+2@matthewduke, The 401(k) contribution limit for 2008 is $15,500 pre-tax. You may be thinking of the maximum contribution for IRA's (which is $6000 if you're over 50). In addition to government limits, most employers set a maximum that you can contribute to your 401k, but I have never heard of one being as low as $6000.
- Griminald, on 07/24/2008, -1/+5If your $100 now may be worth $90 down the line adjusted for inflation, you figure you might as well spend the whole $100 now and pay an extra 10-20% interest?
That way of thinking is partly why we Americans are in this mess to begin with. Mostly it's not poor thought, just lack of thought.- filovirus, on 07/24/2008, -1/+3The market, and my 401k will outperform inflation. As for the weak dollar, one should consider having a modest 15-20% percentage invested within international equities.
- troopa, on 07/24/2008, -4/+4The fact that you have so many Diggs tells me that the average user of this site knows nothing about investing and saving. They sound like a typical American!
- MrSmith34, on 07/24/2008, -4/+63actually wwfp. Paying off credit card debt is like having a guaranteed return of investment by the interest you won't have to pay. this is especially true in a declining economy.
- theNazz, on 07/24/2008, -7/+30Because the average US student ranks with Latvia in general education. Most people won't see the writing on the wall until it is posted on the outside of their bank as they stand in line in panic and rage. I am so going to post it on You-Tube...
- jcfisher3rd, on 07/24/2008, -0/+24Don't bash Latvian education.
- brianboyko, on 07/24/2008, -0/+25Seriously? What the hell did Latvia ever do to you?
- NCg8r, on 07/24/2008, -1/+4Victor Von Doom graduated from Latveria's school system and he is a Super Genius!
- geauxtig3rs, on 07/24/2008, -1/+2You do realize that many states are worse off as a function of personal debt per capita.....the UK springs to mind....
- banmaster, on 07/24/2008, -0/+2But their economies haven't been as shafted by the greedy corporations and their lap dogs in government like the US has.
- geauxtig3rs, on 07/28/2008, -0/+0debt is debt......if you have more outgoing than incoming, you're screwed anyway, doesn;t matter how good the economy is.
- Biks, on 07/25/2008, -0/+5Wait a sec...I'm (first generation) Latvian AND I went through the American school system.
Jesus..no wonder I'm *****. - PixelMagic, on 07/25/2008, -1/+5What is a Lativa?
- statuescrumble, on 07/25/2008, -0/+2Its a new coffee that Starbucks is putting in.
- MrSmith34, on 07/24/2008, -1/+8280% of financial problems are behavior problems. Many know better, they just simply have their blinders on.
- conostrov, on 07/24/2008, -5/+4Yeah, because environment has never influenced behavior in a significant way. /s
- Badandy127, on 07/24/2008, -5/+5Heaven forbid some people take responsibility for their lifestyle. Stop blaming everything on external sources. Just because the dumb bitch Eve ate the apple doesn't mean people are compelled to.
- Protuhj, on 07/24/2008, -2/+1190% of statistics are made up on the spot.
- jus1haz2, on 07/24/2008, -0/+8and the other 10% are made up about 20min prior to being 'on the spot'
- pagalchu, on 07/24/2008, -0/+1You listen to Dave Ramsey too much like me.
- ageofanxiety, on 07/25/2008, -2/+0Statistically I have one breast and one nut.
- conostrov, on 07/24/2008, -5/+4Yeah, because environment has never influenced behavior in a significant way. /s
- Hangly, on 07/24/2008, -22/+23The economy is so ***** you may as well get what you can while the getting's good. Whatever debt you incur probably won't exist in ten years anyway.
- Olfster, on 07/24/2008, -2/+11I have to reluctantly agree with you. It sucks.
- minorthreat, on 07/24/2008, -2/+4My townhouse has been sitting on the market for over 4 months.. I've been really trying to get out from under it, but then I think to myself. Will 170,000 DOLLARS really be worth that much in 10 years... I'm starting to think it won't be.
- executorzz, on 07/24/2008, -0/+2Townhouses are notoriosly harder to sell then a regular house.
Of course 170K will not be worth that much in 10 years. It's called inflation and happens at an average long term rate of 3.5%. - Verugan, on 07/24/2008, -0/+5Rent it and keep raising that?
- executorzz, on 07/24/2008, -0/+2Townhouses are notoriosly harder to sell then a regular house.
- Stewdean, on 07/24/2008, -5/+9That's so not going to happen. Debts will never disappear but more likely to be bought and then charges added on till the debt is bigger.
One big tip - get out of the US if you can. Ship is going down. If China etc call in there debts, oil is switched to yen and Euro etc then the US will be a third world country. Compared to Europe some would say it already is.- ScottMitchell, on 07/24/2008, -4/+15You have clearly never visited a third-world country. Maybe if you tore up all roads, leveled 90% of the buildings in cities, and threw out democratic elections and the rule of law then MAYBE the US would be like a 3rd world country. But I think that the chances of that are far trumped by the chances of you being a loudmouth blowhard.
- AngelBunny, on 07/25/2008, -0/+5@ScottMitchell
I've been to a good number of 3rd world countries. I've been to places in 3rd world countries that are cleaner, richer, and have a stronger economy than most of the US. I've also been to places in 3rd world countries were the people are starving.
The difference that makes a 3rd world country: worse educational system, smaller to no middle class, and lack of laws/corruption. other than that the only thing that defines a 3rd world country 3rd world is if others call it a 3rd world country.
If you look at the trend this country is currently going towards (worse education, smaller middle class, corruption and propaganda, ...) this country is turning into a 3rd world country. 3rd world countries are not all countries with people starving to death.
USA is one hell of a super power. If it fails like black thursday then it will pull the rest of the world down as well. Getting out of the USA will help little, if any at all. Remember, WWII ultimately obtained its momentum from black thursday. If the USA's economy crashes the rest of the world will be pulled down with it AND a big war will come from it.
Remember, history repeats itself...
- kraftj, on 07/24/2008, -0/+9What do you mean "the debt you incur probably won't exist in 10 years anyways"? You think the government is going to come along & forgive you of all your debt to "fix" the economy? If so, you're probably in debt so far you've become delusional. If not, please explain what you mean...
- Hangly, on 07/24/2008, -2/+3I mean inflation, Señor.
- Olfster, on 07/24/2008, -28/+69I am a saver. My savings have been decimated by inflation and the drop in the dollar. My investments have crashed. I am seriously considering changing my ways if they change the bankruptcy laws back to the way they were. After this bail out and realization that now my money is worth even less, I want my stab at running up thousands of dollars on credit cards and claiming bankruptcy. What the heck? I have done everything to live the within my income. BS. I'm the true loser. I am all for tax increases, especially on those making more than 200k a year. Increase the capital gains tax as well, back to 30%. Let the wealthy of this country pay for this BS bank and wall street mess. They all will get hit even more. I will be fine on the land I paid cash for. People we have been screwed here and the real culprits, real estate agents, mortgage brokers, banks and dead beats are walking away with even more money.
- flavioribeiro, on 07/24/2008, -17/+54You were doing fine up to the point where you said "I am all for tax increases, especially on those making more than 200k a year."
Instead of demanding that people follow the rule of law, somehow you come up with a solution that punishes everyone who has more money than you do without any selectivity whatsoever!
Has it occurred to you that a lot people who make more than 200k a year are on the same boat as you are? These are people whose savings have been decimated by the inflation and the drop in the dollar.
Raising taxes NEVER solves problems because it only creates bigger government. The people committing the fraud are ALWAYS the people lobbying the politicians. Raising taxes will only raise their incentive to lobby. Your proposal encourages fraud.- FredFredrickson, on 07/24/2008, -13/+10Raising taxes doesn't make the government bigger by default. Instead of letting the rich get richer while the poor get poorer, let's have the rich extend their lines down and pull some people up. You're taxing a few to save a thousand.
Why don't you just get over the fact that you're never going to make over 200k a year, that a tax on those people will never affect you, and let it pass? I'll never understand why the poorest schmucks always care so much about if the rich are taxed or not. You're never going to get there. Deal with it. - tschau, on 07/24/2008, -8/+4Buried for "NEVER" and "ALWAYS."
The world is not so black and white. - MatthewDuke, on 07/24/2008, -3/+27@Fred
I have many friends that make over $200k a year. They all were studying on Friday nights in college when everyone else on campus was getting drunk. Then they went to medical / law school and incurred tremendous debt from foregoing those working years PLUS borrowing a quarter of a million dollars to pay for their extra education - just for the chance to make it back someday with an above average salary. Now you are going to say they should be singled out to extract more tax money than the average person just because they worked harder? Are you kidding me? - FredFredrickson, on 07/24/2008, -14/+7Matthew, we tax the rich because they can afford it, not because we feel like punishing people who work harder. Trying to make it sound like we're hindering people from making more money is stupid, and has nothing to do with the overall argument. It's a misdirection, and I am sad for you that you have fallen for it.
I still don't understand why you would defend this view, unless you make more than $200k yourself. If we can take a little off the top of those who can afford it more, so the rest of society doesn't fall so far behind, how is that a bad thing? Are you honestly trying to say that if your boss offered you a raise up to the $200k mark, you would turn it down because you wouldn't want to pay a tiny bit more for taxes?
I guess I shouldn't place too much hope in the goodness of others when those who make way more than enough money to exist comfortably aren't willing to give up a cent more than the people vastly poorer than them just to make things better for all. - MatthewDuke, on 07/24/2008, -4/+14@Fred
Who are you to say who can "afford it"? I just explained how most of the people I know who make $200k a year are in a quarter of a million of dollars in debt so that they might have the chance to earn that kind of money. They are doctors and lawyers and business people. Extremely valuable members of society contributing in countless ways. I think they have earned the right to be taxed the same amount as everyone else, but Fred Fedrickson thinks they make too much money. What is your qualifications for making that judgment? What happens if somebody decides $50k a year is too much?
It is the forced redistribution of wealth that worries me on many, many levels. I'm not worried at all that you are "sad for me" though...
Someday I hope to make over 200k - obviously you don't and are complacent with your paycheck. I'm not, and intend to work hard to earn more. That's the fundamental difference between you and I. You expect people to give you something for nothing. I expect people to do as I do, and earn it. - FredFredrickson, on 07/24/2008, -9/+8Matthew, you know nothing about me. I am not complacent. I went to college, and I've worked very hard at school and with my career. I currently do not make more than $200k, but if I ever do, I will gladly pay more taxes if it helps the people around me live a better life.
I'm living quite comfortably on my current salary, and I'm saving a lot too. This leads me to believe that if I ever do hit the $200k mark, I'll have plenty of extra. And if I don't, I'm doing something wrong. Barring people who have extreme medical problems, nobody *needs* $200k to live. A guy can get by with quite a bit less, and that's why I think it couldn't hurt to take a tiny bit more from those people.
If someone decides that $50k a year is too much, I won't change my mind - I don't have a problem with helping to better the lives of others. I make more than that, and I can contribute more. It helps others more than it hurts me.
This isn't about giving people something for nothing - there are many people in this country who do a good deal of work more than you or I do (harder work, longer hours) and they will never make a tenth of the money I will. That's wrong.
Tell me, what good does it do to keep the gap between rich and poor widening? How will that ultimately help this country? People who make more than $200k a year are a vast minority in this mix, and I think that if they can help improve the lives of thousands of people by giving up a minuscule amount of their earnings, then so be it.
Why should we turn our backs on other people just because they didn't have the means to succeed that we did? - MatthewDuke, on 07/25/2008, -3/+18My wife works for a non-profit charity that finds people jobs. Every day she goes to the soup kitchens and the shelters and the free food giveaways. All the ghetto fabulous people tell her the same stale one liners when she says she's there to help them find a job:
"Work!? Work is a four letter word to me! Ha ha!" (keeps on walking by)
"A job? You couldn't pay me to go to a job! Ha ha!" (keeps on walking by)
Maybe once every few weeks somebody will listen to her and make an appointment for her to work on their resume with them (the whole service from start to finish is free). It's even more rare for them to actually show up to the appointment and continue the process.
You are a sucker if you think the low class is there because they don't have any options or ways to get out. There are people falling over themselves to help them up in life, but they like getting everything for free way more than working. ***** those people. I'm never going to willingly give them my hard earned money. If you think all they need is a little bit bigger handout to get their lives together, you are sadly mistaken...
The gap between rich and poor is exactly correlated to the gap between people with a good work ethic and the people who just want everything in life handed to them. If I had everything taken away tomorrow, I would pick myself up and be pushing a broom at McDonalds before the day ended. Give me a year and I would be the manager. Give me 10 years and I would own the place outright. That's just the mentality that I have in life. - bobcat7407, on 07/25/2008, -2/+8@Fred
That's why there are charities. It should not be governments job to redistribute wealth. If a person makes $200k a year it should be their choice. It's a good thing that you're willing to help others, and you are always free to do so. Why in the world should I be able to tell you that you have to though? And also, if making more money only means your going to have to send more to the government, which does not mean the people who need it are getting it, what is my motivation to make more money? Your kind of thinking is why many people are fine living on welfare. Also, if I want to give away my money to help others, shouldn't I be able to choose where it goes? I'll be interested to hear why you think you should get to choose where others money goes. - max420, on 07/25/2008, -5/+5@Matthew
I agree with Fred. People who make 200+k a year, regardless of debt, should pay more taxes. The more you earn, the more you are taxed. Period. Life ain't fair, deal with it.
Homeless people, are different then poor struggling people. Homeless people often times have given up, and are beyond saving. I am of the opinion, that a homeless person who refuses work, should be put down. - bjornski, on 07/25/2008, -1/+3Another reason I"m in favor of legalized euthanasia.
- TheLastFreeMan, on 07/25/2008, -1/+6This is the most intelligent discussion I've ever read on Digg.
- SmackaMuta, on 07/25/2008, -1/+7@Max
People who make over $200K a year already pay more income taxes. Taxes are done with percentages so the more you earn the more you pay. On top of this, anyone earning $164,550 or more per year pays at least 5% higher income taxes than those earning less. (33% vs 28%, 25%, 15%, or 10%) via:
http://en.wikipedia.org/wiki/Tax_bracket - Olfster, on 07/25/2008, -1/+2@flavior, Did I ever mention how much money I make or have? Why would you assume that my premise must mean I do not make more than $200k? Look at the real point. Increased debt without increased taxes is BAD very BAD. Bigger government is BAD very BAD. Giving away my tax dollars to dead beats and crooks is BAD very BAD. It makes me want to not produce, close my business, and run up debt, so I can join the free for all crowd. My ethic will not allow me to do that, but there are plenty in this country with out that barrier.
- bobcat7407, on 07/25/2008, -1/+1@Olfster
"Increased debt without increased taxes is BAD very BAD."
Agreed. That's why the debt should be reduced. Just throwing more taxes at things will not decrease the debt, it will only increase the number of things money is spent on.
"Bigger government is BAD very BAD."
Again, agreed. This is why you should not be forced to give more taxes to government, you should get to choose where your money goes. If you want to give it to the government, I'm sure they'll take it. But more taxes just means they will spend more and become even bigger.
"Giving away my tax dollars to dead beats and crooks is BAD very BAD."
Finally, agreed again. But this is one of the things the government does best. So once again, the solution to your want to give is not to force people to give to the government, it is to encourage them to give to worthy causes. There are plenty of civilian charities that need your money, the government should not be in the business of being a charity.
And I make no assumptions about how much you make, it doesn't matter. Increasing taxes on the rich even more is not the way to go no matter how much you or I make.
- FredFredrickson, on 07/24/2008, -13/+10Raising taxes doesn't make the government bigger by default. Instead of letting the rich get richer while the poor get poorer, let's have the rich extend their lines down and pull some people up. You're taxing a few to save a thousand.
- Badandy127, on 07/24/2008, -9/+8You're an idiot. (to the OP, not you flavior)
- angryfirelord, on 07/24/2008, -3/+19Tax increases do not solve the problem, rather they give an easy access to those who know the system and punish those who follow the law. Remember, government is the problem, not the solution. We need less government by cutting spending at least in half, if not more, and ending all forms of corporate welfare. These lenders engaged in lending out money without background checks because they knew the government would bail them out anyway.
Shrink the government, not my wallet.- STPZ, on 07/25/2008, -1/+4We shrank the government over the last 8 years and what happened was lobbyists for corporations took over where regulation should have been leaving it up to the companies to police themselves. THANK YOU for making my money worth-less and allowing greedy business owners and lobbyists to stockpile all commodities, that are supposed to be used to grow the economy, in their own personal vaults. This is why you are wrong, you can not shrink the government without unleashing the greed of capitalism and the growth of corporations allowing them to indirectly write their own legislation that has no chance of opposition. And the one thing you hate, corporate welfare, is proof of how the government has been infiltrated by corporations; NO true republican would create corporate welfare its against the ideology of small gov't, likewise NO democratic would give welfare to corporations before giving it to all those truly in need. The Neo-Con has arrived; and I being an Independent leaning toward the Democratic party, truthfully seek the day when real conservatives take back control of the republican party and restore its true values.
- executorzz, on 07/24/2008, -4/+25I lived on a $37500 salary in Suffolk County, New York and was able to live comfortably and put in $300 a month in the bank.
I think you need to change your gameplan and stop asking for handouts from others who work hard for their money.- iloveliberals, on 07/24/2008, -6/+2Money in the bank won't keep pace with inflation. Put the money in the market, and capital gains taxes (which a certain presidential candidate wants to INCREASE) will bring your gains back to negative. The system's got ya screwed either way. Vote for Social Security and spend what you got!
- executorzz, on 07/24/2008, -2/+3Inflation is at a long-term rate of 3.5%. I can beat 3.5% in the market.
- JrtD, on 07/24/2008, -2/+1Putting money in the market doesn't make sense these days. It's too risky. I'm not happy that my retirement fund tanked this past year, with most of that money in stocks in a supposedly solid mutual fund.
I'm doing better with money I have sitting in a credit union account that makes pennies in dividends. At least the principal isn't disappearing. - foohookups311, on 07/25/2008, -0/+1Hey man I live in Suffolk also. Bohemia to be exact. Just out of curiosity are you renting a spot or living at home with mom and pops? This can make all the difference in whether you can save that 300 or not.
- executorzz, on 07/25/2008, -0/+1This was about two years ago. I lived a little east of Bohemia near Setauket/Stony Brook. Got a small apartment with two rooms and a roommate. We split the rent to like $550 a month.
- minorthreat, on 07/24/2008, -4/+6if I was somehow smart enough to be a saver and have a nice fat lump I was sitting on with a 200k income, I wouldn't care one damn bit if they raised taxes.
If I had a 200k a year income, had $1,000 to my name, had an outragous mortage, car payment, time share payment.. etc.. etc.. I would be against it, but then again, I wouldn't be in this boat.
Raising the taxes back to where they should be is only punishing the fools.....- banmaster, on 07/24/2008, -3/+2Its the fools who need punishing!
- MatthewDuke, on 07/24/2008, -4/+6If you were smart enough to make $200k a year, and have a nice fat lump - your personality would be such that you wouldn't be so willing to throw away money through taxes. Warren Buffett personally investigated a $4 charge on his tax return a few years ago. It took him hours. That's the mentality I'm talking about.
- FredFredrickson, on 07/24/2008, -1/+4Hours to find a $4 discrepancy? Sounds like a complete waste of time to me.
- Olfster, on 07/25/2008, -2/+3@minorthreat, Nor do I, did I mention I do make more than $200k. Oops, forgot to mention that in my original post. Own several businesses and properties. You are right on. I have no problem with taxes going up. Not one bit. I have a severe problem with dead beats and corporate cheats, and cheats (realtors and mortgage brokers) in general getting handouts from the tax money I do pay. Just look at all these comments. No one seems to really get what will happen once GB signs this bailout into law. It just shows how screwed this country really is. And fools would be punished by increased taxes, I whole heartedly agree. At present value anyone that says they need more tax breaks on $200k a year, does not make $200k a year, has not consistantly made $200k or are living way beyond their means. But don't worry the median will soon be more than $200k. They just don't get it.
- bjornski, on 07/26/2008, -0/+1@Offster
You hiring? I'd sweep floors for you. You get it. - bjornski, on 07/26/2008, -0/+1(I'm a tech, but any boss with a mind that good is worth proudly working for at any position)
- airwalkery2k, on 07/24/2008, -0/+21The people who should pay are the people who made the faulty loans and the people who took out those loans.
- Stewdean, on 07/24/2008, -3/+3If you saved correctly the value stands next to no chance of going down. My advice to anyone is DONT BUY STOCKS AND SHARES. Invest outside of the US or keep it to cash. Now is the time to go for safe and ensure you're in the black - that way you will do very well whilst all those around you are having to sell assets very cheaply.
- lolwutpear, on 07/24/2008, -2/+3investing outside the US sounds like a fine idea to me, but i think that keeping all your money as cash instead of buying stocks is the dumbest financial advice i've ever heard. having some around in a savings account in case you need it is good, but avoiding stocks and mutual funds entirely is just poor planning.
- STPZ, on 07/25/2008, -2/+2"DONT BUY STOCKS AND SHARES" !!! WHAT...!
are you trying to cause a depression? Once something becomes cheep enough buy as much as you can as long as its a safe buy, how do you want the economy to come back out of the ground, government bailouts? then you seriously have a problem.
call me an optimist but markets swing both ways and you just have to ride it out while its in the red. Theres going to be a hell of a lot of potential in the market in the coming months and years don't count it out yet.
- ageofanxiety, on 07/25/2008, -0/+2You should watch those documentaries on google video like "Money as Debt" and that 3.5 hour "Money Masters" because it suggests that the Rothchild family in Europe, who own the largest stake in our FED, (yes, our fed has private shares just like a public company) this family may own half the money in the world. Half of our 10 trillion dollar deficit is actually owed to this family.
These video's will turn your knowledge upsidedown.
- flavioribeiro, on 07/24/2008, -17/+54You were doing fine up to the point where you said "I am all for tax increases, especially on those making more than 200k a year."
- flavioribeiro, on 07/24/2008, -3/+35The reasons are (1) easy money; (2) greed; (3) vanity.
1) As long as interest rates are low, banks are free to loan to pretty much anyone. This is the consequence of manipulating the money supply. Interest rates should be set by the market as a measure of risk. Deadbeats should never get easy credit, contrary to what has happened in the US.
2,3) Greed and vanity will always exist. Your neighbor buys a boat with easy credit, and suddenly you want one.
Solution to (1): follow the Constitution.- conostrov, on 07/24/2008, -7/+21) Yeah because there couldn't possibly be a massive benefit to open access to easy credit. It hasn't help anyone: pay for collage, develop a great idea, get out of the renting cycle(own), or see a real return on investment (verse sacrifice equity to 'Angels'). There isn't honest hardworking people, who take risks and lose, all people with trouble are deadbeats and shouldn't have to get an opportunity to risk, they should slave away at a job they hate instead of investing that blood and sweat in their dreams. /s
2) Self interest has never done anyone any good? Wake up, taking care of one self is one's primary concern and one of the few areas their qualified to do. If you are not acting a lest a little greedy your trying to solve things you have little power in and even less understanding. Stop trying not to be greedy. Strive to be number 1. Being greedy doesn't have to be being vindictive or dishonest. Push yourself, aim to be better, and yes covet what you desire. Then make it happen. Take action. Make mistakes. Greed can only be perceived to hurt others, it is the fear of of those ambitions that actually hurts.
3) Wanting to be recognizing and be unique in a world of 6 billion people is a bad/aberrant thing? In a world that prizes and adores in a god-like fashion genius, impact, one-manish, difference, and fame. Vanity is not symptom of a sickness, but a condition of normality. I say be unique, make mistakes, risk everything, lose everything. Be Different. Think different. Go change the world.- flavioribeiro, on 07/24/2008, -0/+71) I never said credit should disappear. I said interest rates should be proportional to risk. Under the current system, someone wishing to finance his education has the same access to cash as a deadbeat wanting to buy a million dollar house.
If you don't earn enough money then you can't buy a big house. PERIOD. Artificially low interest rates allows people to live beyond their means.
I have no problem with people taking risks. But by definition risk takers should never be bailed out if they turn out to be wrong.
2,3) I never condemned ambition or your fashion magazine definition of vanity. I gave an example of how greed and easy credit are a dangerous combination.
You're taking issue with things I never wrote. - quandrum, on 07/24/2008, -0/+3Thanks trite and hackneyed digg user for your insightful wisdom. How many fortune cookies did you have to eat to come up with
" I say be unique, make mistakes, risk everything, lose everything. Be Different. Think different. Go change the world." - quandrum, on 07/24/2008, -0/+3P.S.
In bed - GRTWHT, on 07/24/2008, -0/+3"Strive to be number 1. Being greedy doesn't have to be being vindictive or dishonest. Push yourself, aim to be better, and yes covet what you desire. Then make it happen. Take action. Make mistakes. Greed can only be perceived to hurt others, it is the fear of of those ambitions that actually hurts."
Spoken like a self-centered, greedy *****. - conostrov, on 07/25/2008, -1/+1Thank you. I think so too. Oh, I believe that was three.
- flavioribeiro, on 07/24/2008, -0/+71) I never said credit should disappear. I said interest rates should be proportional to risk. Under the current system, someone wishing to finance his education has the same access to cash as a deadbeat wanting to buy a million dollar house.
- Uddhav, on 07/24/2008, -0/+3"Deadbeats" as the credit industry calls them, are people who pay off their bills every month. They don't pay any interest and that's why they are called deadbeats. Why would you not want those kind of people to get loans?
- conostrov, on 07/24/2008, -7/+21) Yeah because there couldn't possibly be a massive benefit to open access to easy credit. It hasn't help anyone: pay for collage, develop a great idea, get out of the renting cycle(own), or see a real return on investment (verse sacrifice equity to 'Angels'). There isn't honest hardworking people, who take risks and lose, all people with trouble are deadbeats and shouldn't have to get an opportunity to risk, they should slave away at a job they hate instead of investing that blood and sweat in their dreams. /s
- BigTuna99, on 07/24/2008, -2/+97As someone who pays their credit card bill off every month, I found this amazing:
"The average household’s credit card debt is $8,565, up almost 15 percent from 2000"- brettg102, on 07/24/2008, -3/+16Jesus christ...I totally agree. Shockingly stupid ***** people.
- Coffeedemon, on 07/24/2008, -2/+6Some are. Some get stuck having to take a credit card cash advance in college to pay for rent and get stuck under that for a while. Things add up.
- FredFredrickson, on 07/24/2008, -1/+25Haha, yeah I can't get over that. It means that for ever guy like you and I, who pay off our credit every month, there's some ***** out there who's $16,000 in debt.
I guess it's no wonder that people just can't get it... the national debt is at absurd levels as well. - Bermygoon, on 07/24/2008, -5/+11Might be a little deceiving though, my credit card debt is at 10 grand but I pay it off every month. I travel on business and it get reimbursed every month so I am in default.
So my average 'debt' is higher but I don't pay any interest ever and plenty of money to pay it off every month.
They should be reporting the average debt that people are carrying over from month to month and paying interest on. - hotpuck6, on 07/25/2008, -1/+3Credit card companies hate people like us.
They lend us hundreds, sometimes even thousands a month, and they never see any interest payments.
Guess for every one of us that pays it off, there's gotta be 10 who can't even afford the minimum payment.- stoanhart, on 07/25/2008, -0/+1Yeah, they do. Oh well, they get a bit every now and again. I bough myself a bike recently, which will take 3 months to pay off at 2 payments per month. In the end, I will have paid $20 in interest to have my bike at the beginning of summer, not the end.
Credit cards aren't all bad. Just make sure you have a SHORT TERM payoff plan for each and every single item you put on it, and you'll be fine. Compound interest hits a point where it hurts like hell, but if you pay off quick, even 20% doesn't amount to much. - spvo, on 07/25/2008, -0/+2The credit card companies get a percentage of every purchase we make using their card. So I doubt they hate us too terribly much.
- stoanhart, on 07/25/2008, -0/+1Yeah, they do. Oh well, they get a bit every now and again. I bough myself a bike recently, which will take 3 months to pay off at 2 payments per month. In the end, I will have paid $20 in interest to have my bike at the beginning of summer, not the end.
- beesaretasty, on 07/25/2008, -1/+4I agree and I don't agree. It's great that you pay your bills every month. Unfortunately if you leave a job where you are being treated abusively and you are overqualified for any quick fix jobs and finding a new career job takes time, you can quickly be ****ed. Judge not lest ye be judged. I'm sure if your life were scrutinized there would be a lot of things that could be questioned by others.
That said, I think people should figure out a way to pay the debt off without handouts. If they're in a rough patch, give them a break. If they're making bank, have them pay it off. Shoving a 30% APR up their ass can make things get out of hand quickly for even educated, hard-working individuals.- imjustsayin, on 07/25/2008, -0/+2I think leaving a job voluntarily without having another one isn't any smarter than running up credit card debt. This is particularly true if "you are overqualified for any quick fix jobs".
- beesaretasty, on 07/25/2008, -0/+1If you feel that working 80 hours a week for 30,000 leaving no time for an employment search is a good idea, then power to you to do that. Other people sometimes get trapped by taking the quick fix leaving them with no room to maneuver. The job market is screwy sometimes.
- andrew1338, on 07/25/2008, -2/+2This absolutely shocked me too. I can't believe the kind of interest people are paying either! Seriously, 25% or more?!?! I'm just got my very first credit card and got a 15% interest rate, $700 line. It ain't much, but consider this is my first card (or any form of credit, for that matter), I had no cosigner, and the way I reported my income, it looked as if I'm losing money (based on income from summer jobs minus my school costs I'm losing money. That doesn't accurately portray my financial situation, but its all the lenders see).
So far I've only used it for small purchases, but I haven't paid a cent of interest. Barring horrific unforeseen expenses, I plan to keep it that way too.
- brettg102, on 07/24/2008, -3/+16Jesus christ...I totally agree. Shockingly stupid ***** people.
- Rotzooi, on 07/24/2008, -4/+49If our car isn't bigger than our neighbors', my wife is going to divorce me!
- Amadeus2490, on 07/24/2008, -1/+26I know exactly what you mean by "car."
- Buzzbean, on 07/24/2008, -1/+14Then divorce her.
- blackgt93, on 07/24/2008, -1/+18Reminds me of a Craigslist ad I just saw for a Lexus RX300. "I bought this car for my fiancee as a gift, and didn't realize that she wanted a white one. She loves the car and we will be getting a RX330."
Good idea *****. Who the hell buys a Lexus for their fiance, and what kind of fiance bitches because it's the wrong color?
Reference: http://kansascity.craigslist.org/car/768294245.htm ...- Joepoag, on 07/24/2008, -1/+3that is just sad
- JrtD, on 07/24/2008, -0/+0Buying the car you wife wants might be cheaper. Divorce costs money (attorneys, alimony, one less person sharing expenses, etc.).
- ShellShock11, on 07/25/2008, -1/+4Painting a car is also....expensive?
- tnoy, on 07/25/2008, -2/+2The same idiot that thinks the story behind ads like this are real.
- hannahruth0, on 07/25/2008, -0/+2Are you serious? I'm so ashamed to be a female when I hear of stuff like this. It's absolutely outrageous, and I don't understand why men put up with it!
- jlhoben, on 07/24/2008, -16/+5That's right: blame the people, blame the Arabs, blame the foreigners but never blame congress, the elite, the central bankers, the MI complex. Impeach bush.
- spudhead, on 07/25/2008, -0/+2Hey, I'm part of the 'elite' and I had nothing to do with it.
Seriously, who the hell are the 'elite'?
- spudhead, on 07/25/2008, -0/+2Hey, I'm part of the 'elite' and I had nothing to do with it.
- macwac, on 07/24/2008, -17/+28Higher education (Bachelor 4 yrs + 1/2 yr Masters) will set you back roughly 50 k per year: total: 300k
If you got no savings and no support from parents you probably end up taking a loan. Its expensive to live.. if your lucky you have no health problems. Don't forget living expenses, such as apt/house rent etc.. most people can't afford their education and have to take up loan. For those people it makes sense to go into debt. I don't think its the willingness to go into debt as much as it is the demand set by society to take up such debt in order to be competitive in the market. Of course you have people taking up debt just because they spend too much on frivolous things... but i think the vast majority who do take up debt try to pay it back. The problem now is that loans were given to people who should never have been given loans in the first place - both sides being dumb (short term profit vs long term survivability).- santaliqueur, on 07/24/2008, -4/+41300k? you could go to a good state school for 45 years for that money. All colleges don't cost 50k/year.
- macwac, on 07/24/2008, -10/+3The figures include living expenses etc.. and ofc you can go to a university thats in your state and pay a lot less, but not everyone is located close to the university of choice etc.. a lot of people go out of state. It was to give a number to show that education cost money.. and whether it is 300k or 150k for your bachelor and masters.. it is still a lot of money a lot of people cannot afford.
- santaliqueur, on 07/24/2008, -3/+14You're still grossly exaggerating, and trying to justify it.
I went to a state school, which has a Top 50 engineering curriculum. I spent less than $12k/year, after living expenses, fuel, books, everything. Get the $50k number out of your head, because it has little relevance. - macwac, on 07/24/2008, -3/+2Please see my response to your question of the list of universities..
- Ryan2845, on 07/24/2008, -1/+8"not everyone is located close to the university of choice"
This is what it comes down to. If you can't afford to go out of state, then you shouldn't be going. Choose a cheaper school near you and don't go 300k in debt. In most cases, there is no reason you HAVE to go out of state. Unless you are sure the "bigger name" on the diploma is going to give you enough of a pay raise to justify the extra ~200k in debt, and unless we are talking med or law school, it probably won't.
I got an engineering degree from a state school for FAR less than 100k, with living expenses included, and am working side by side with those with expensive private school degrees for the same pay... - SocialPoison, on 07/24/2008, -1/+4If you can't afford to go then it's very simple: don't.
I've got very little sympathy for people who get a BA in Leisure Studies and put themselves under a mountain of debt doing it. Get a job (only work during the summer, if necessary). Get a scholarship. Live cheaply. It's all part of the experience.
And for what it's worth, if you've got $0 from parent contributions, then you can qualify for some VERY low interest school loans. They won't compound on themselves like a card will.
(worked hard through school, got in, got out, got done, left with minimal debt which I'm just about finished paying off) - tflowholdings, on 07/25/2008, -6/+1education is 4 nerds
- Vercobrix, on 07/25/2008, -0/+1You guys are all ignoring something very important...Opportunity cost. That is how it gets up to 50k/year as on average that is what a High School grad can make if they decide to take up a full time job instead of going to higher education. But yes for most schools of study you can go to the cheap state schools, but to be a successful doctor, lawyer, businessman, your chances are greatly increased by paying out the ass and thus being forced to take a loan just to go to the college.
- andrew1338, on 07/25/2008, -0/+2adding to what social poison had to say, I had an interesting window on college spending with my first year roommates. Keep in mind I'm going to a well-known, but not particularly prestigious state university.
One roommate was a second year student from out-of-state earning a degree in God-knows-what, and planning on doing some very expensive study abroad in Asia. He barely committed to a major second-semester. He's already paying a ridiculous sum for tuition (no scholarships for him) and willingly chose to live in one of the more expensive dorms. He has a summer job, but no job during school.
The second roommate is from some *****-hole town where the high-school drop out rate due to pregnancy alone is in double digits. He's poor as dirt, but he's pursuing a double major (above 12 credit-hours, its a flat rate no matter how many classes you take) in two engineering fields, works year round (two jobs in the summer) and is milking scholarships for all they're worth.
Now consider this. Both are going to the same school, but their expenses are wildly different. and whose getting the better education? The big spender, or Mr. Thrift?
- SeekerDarksteel, on 07/24/2008, -1/+11Wow, where the hell do you pull your numbers from? Even assuming a generous 20k/year to live (I personally lived on ~10k last year, including rent, bills, and all my food), that's 30k a year for tuition. But the only people who _pay_ 30k a year in tuition are either going into well paying fields (law/medicine), or who have the money. The average american should never be paying 30k/year in tuition.
- macwac, on 07/24/2008, -1/+3I know a lot of east coast universities charging out of state students & foreign students 40-50k yearly fees. Whether people should be there or not is up to them. But the promise of a higher start salary does entice a lot of students who cannot afford the education to apply and gain entry..
- santaliqueur, on 07/24/2008, -1/+1What are these east coast universities you know of? List a few.
- macwac, on 07/24/2008, -1/+2Drexel, Northeastern, Bentley College, Wharton, UPenn, Boston U, Urbana-Champaign etc... to mention a few (all above 40k). Look at out of state cost.
http://www.oar.uiuc.edu/future/cost/tuition_intern ...
http://www.neu.edu/admissions/costs/tuition.html
http://www.wharton.upenn.edu/mba/admissions/financ ...
http://www.bentley.edu/undergraduate/financial/ind ...
http://www.bu.edu/admissions/apply/financial_tuiti ... - Shoebox639, on 07/24/2008, -3/+3Cornell University charges 45k+ a year. And that is a fact guys, cuz I go there and my family is paying every penny of it.
- novemberdream07, on 07/24/2008, -0/+2SUNYs are about 19,000 without all the extra fees, UMass Amherst is about 30k out of state while it's not 40-50k these aren't exactly cheap.
- Zipko, on 07/24/2008, -0/+2Or on the east coast you could have gone to Bloomsburg University and only paid $10k per year for out of state tuition. Never heard of Bloomsburg before? That's alright, neither had my current employer. Point is most people don't really need to go to those big name school to land a good job. IMO a big name school only helps mediocre students get jobs. If you're talented and work hard you should be able to find work without the name.
I'm an engineer with a CS degree and work along side guys with degrees from Cornell and UPenn. No one questioned my degree or school when it came to my job interview. - timusca, on 07/24/2008, -4/+3@Shoebox
You go to Cornell and use words like "cuz"? You're wasting your money. - andrew1338, on 07/25/2008, -0/+2anyone who pays every penny of out of state tuition is an idiot. the only way i would have ever considered an out-of-state school would be a *significant* scholarship. My family could have easily got the loans, but I'm not dumb enough to think a big name university is worth that kind of hell.
- ousthouse, on 07/24/2008, -1/+12you can get a higher education without going 300k in debt
- Antialias, on 07/24/2008, -1/+10I got Bachelor + Masters for less than 30 grand TOTAL less than 6 years ago. My masters will hold up as well as 90% of the schools out there except the top ivy league schools, and even then after a few years in the job market it doesn't matter anyway. If you go into huge debt to get an education you're just wasting a ton of money.
- AngelaQ, on 07/24/2008, -2/+4How nice that you had a school to go to that was essentially free. In my state, the state schools are charging about 3 times that much right now, and working to pay living expenses probably means that you won't be able to take a full course load, or your grades will suffer. Most adults now have to work long hours to pay their expenses at all, leaving little or no time or money for education.
- KibblesnBitts, on 07/24/2008, -2/+6Agreed, as an incoming college freshman this fall, I am paying $24,000 per year for four years...accruing $96,000 in student debt alone NOT including other expenses. I will be underemployed during these four years, and with the high possibility of law school at the conclusion of the next four years, that's another $50,000 per year for three more years.
so I'm looking at almost a quarter of a million dollars in debt before I can even start a career.
The cost of education is becoming extremely unbearable and it's to the point where I'm beginning to second guess myself why I didn't just save a bunch of money and go to community college for the first two years.
and further note: I am still not quite sure how much law school is per year, so the $50,000 per year was on speculation from what I have overheard in the past few years- EarlOfLade, on 07/24/2008, -0/+6I was educated at a world top 100 university and paid less than $200/year.
Never understood why Americans accept that they have to pay hundreds of thousands of dollars for an education, crazy.
And it creates a huge divide between the ones who can afford and those who can not. Never had to think for a moment if I could afford an equivalent to a Masters - CosmicJustice, on 07/24/2008, -2/+5Boo freakin hoo.
1: You're going to a very expensive school which tells me you're probably from a very well off family
2: If you don't think that as a lawyer you will make more than enough to pay off those loans then don't go to law school. You have no business racking up a $300k tuition debt and then not making enough to pay it off. That's just irresponsible and pointless. - Zipko, on 07/24/2008, -0/+4I don't know much about law school either, but it seems that going down that path, similar to going to be a doctor, you are gambling on the high salaries those professions give. You're putting all of that money out up front because doctors and lawyers in this country make a ridiculous amount of money. The gamble of course is that you get a year into law school and realize you can't or don't want to do it, now you're stuck short of that high salary with $200k in debt.
You could always chose to go to the cheap state funded school and become a teacher or such. graduate with little or no debt but only be making $30k to start.
It's all the same, in the end it's about doing what you what you want to do with your life. If being a high profile surgeon is an important enough goal then people will put up with 8 years of schooling and working through the ranks to get to that position. - macwac, on 07/24/2008, -0/+2I understand where your coming from. Majority of my friends have been or are in the same situation.
- andrew1338, on 07/25/2008, -0/+2You could always get a bachelors in engineering, or one of the other rare bachelor's degrees that you can actually earn a decent wage on without grad school. That's my plan. If my employer wants a masters or beyond, they can pay for it after i've worked there a few years.
- EarlOfLade, on 07/24/2008, -0/+6I was educated at a world top 100 university and paid less than $200/year.
- Quaterni0n, on 07/24/2008, -1/+74.5 x 50K != 300K
- macwac, on 07/24/2008, -0/+4It was meant as 1 or 2 years (1/2) for your masters.. i don't know many that do masters in half a year. Sorry for confusion.
- brettg102, on 07/24/2008, -3/+6You see, my parents were fiscally responsible in their youth, and you know what...they paid for my school. They passed those habits to me...and I am prepared to do the same for my children.
- macwac, on 07/24/2008, -1/+6But what if your parents were not fiscally responsible and you were born into a family with below average income or that they believe that you should pay for your own education, how would you afford it if your unable to take up a job next to your studies? you would probably have to resort to a loan, unfortunately.
- Verugan, on 07/24/2008, -0/+4/golfclap?
- GRTWHT, on 07/24/2008, -1/+20I hate when rich people don't understand what rich really is.
Rich is being able to afford to put your kids through college. As well as buying them cars, designer clothes, all the latest cool "toys" (ps3, ipod, etc) and other such nonessentials.
Middle class is being able to put a roof over their heads, food in their stomachs and clothes on their backs (not designer/trendy *****). Anything else is a luxury, therefore not possible.
Poor is TRYING to keep a roof over their heads, food in their stomachs and only the most basic of clothing on their back. Everything else is a dream that you strive for, but know is probably never going to happen.
When you accept that you grew up rich and have no clue how the rest of the country is forced to live, maybe you can stop insulting everyone (and their parents) that wasn't as fortunate as you. - brettg102, on 07/24/2008, -2/+1We live middle class lives and continue to do so. They chose to forgoe the luxury ***** to provide their children with education...is this too hard to accept?
- TheKeithD, on 07/24/2008, -0/+4Good for you. Unfortunately, there are some people who have parents that don't know what being responsible (fiscally or otherwise) is.
- Zipko, on 07/24/2008, -0/+4Forget that, I'm fiscally responsible, and by the time I have kids I'll be able to afford to send them to college too, but the hell if I'm giving my children a free ride through life. They'll learn to be responsible and earn their keep just like I did.
That said, I'm not cold hearted about things out of their control. They'll be lucky to have a good home to come to and I'll bail them out if needed, but the idea that you get a free education and no limit credit card just because you're parents are rich is *****. - MatthewDuke, on 07/24/2008, -1/+5@GRTWHT
Don't confuse being rich with being upper middle class.
Being rich is not having to work or even go to college if you don't feel like it. Being truly rich is having all your money work for you through investments without lifting one finger. Anyone who works for a living - even the most highly paid attorney/doctor - is middle class. There is a wide range of the middle class, but if you require a job, you are middle class. - lolwutpear, on 07/24/2008, -0/+1they probably should have thought about that before having children. i feel bad with the student with parents like that. thankfully, the federal government will provide some aid, and luckily(?), that student probably won't be going to an overly expensive college, either, so at least any loans he takes out won't be too huge. burdensome, but manageable once he graduates and gets employed.
- kingmanic, on 07/24/2008, -1/+5Move to Canada. at 15 get citizenship by 18 go to college for 6k/year including books, live there for around 25k a year, save 20k/year. Move back to the states after graduation.
- TheKeithD, on 07/24/2008, -0/+6And as an added bonus, you get to get out of the US and live in Canada! Pretty good deal if you ask me.
- tfrans, on 07/24/2008, -0/+2I have heard recently that I attend the most expensive school in Canada (TWU). I pay about 15,000/yr for tuition so even the most expensive undergrad school in Canada is comparable with many state schools (as far as I understand).
- phongalong, on 07/25/2008, -0/+0UC Berkeley tuition is ~6k/year too, for in state, but cost of living is high.
- frsrblch, on 07/25/2008, -0/+2All American universities (colleges?) aren't that expensive. Some are, but quoting them as the cost of a higher education is stupid.
The University of Alberta has one of the best Chemical and Materials Engineering programs in North America, and it costs me $6k per year (with room for savings if you buy used books). Combine that with a co-op program (5 years, instead of 4, and you go work for 4/8 months every couple terms), and I am self sufficient for my tuition.
- Zipko, on 07/24/2008, -2/+5Try living at home (if you have parents nice enough not to charge rent) and commuting to a $4k/year community college/public state school. It's manageable to get a cheap education, but as the article points out people choose not too. Instead they take out huge loans and go to the expensive big name schools. Then they rent a place and blow money partying and shopping running up credit card debts just like everyone's talking about.
The cost of education is high, often too high for someone that already has a family to support, but there's a problem when you're average student is graduating with $60k worth of debt. When I graduated college I think I had maybe $1k in debt only because I didn't feel like working my senior year and was willing to accept some credit card debt on the basis that I'd pay it off when I graduated. I did fine going to the cheapest public school I could find and working hard through HS and college (not counting that last year). My sister went the other route and is now into her senior year on her way to being one of those people raising that average debt higher because she didn't understand fiscal responsibility. - Coffeedemon, on 07/24/2008, -0/+2300K?!? I got 2 BAs and a Masters for ~50K in student loan debt while renting apartments. Granted I'm still paying that off (graduated with the Masters in 2002) now but I make enough that its not a big deal. Well actually it is a big deal because its the reason I can't save for a down payment to buy a house.... but that's another story.
Oh and out of curiousity. Where did you find a 1/2 year Masters degree? Mine took 2 years and at the time only schools in Canada offered it as a 2 year option citing that the 1 year and less options were not as highly regarded in the workplace.- macwac, on 07/24/2008, -0/+2see my reply to Quaterni0n. 1/2 was meant as 1 or 2 years not as half, sorry for confusion. Too used to using / as either/or. Please also see reply to santaliqueur regarding 300k.
- SirTheGuy, on 07/24/2008, -0/+2Wow, I thought 17-20K a year was expensive.
Add on top of that, education is not only more expensive, but also takes longer. I go to a private university, most degrees are 130+ hours, not including minors. 60 hours of Gen Ed is REQUIRED. They recently overhauled the Engineering program, before that, it was ~156 hours for an EE to graduate. Students stuck around for 5-6 years regularly.- brettg102, on 07/24/2008, -0/+1@SirTheGuy...Our engineering is 155 hours with mandatory year of paid co-op, done in 5 years including co-op. You've got an easy going university there.
- macwac, on 07/24/2008, -0/+1How do the hours work? i am used to a credit system. You receive 1 credit for a course that has 3 hrs per week for 15 weeks. 39 or so credits needed to graduate with a degree and a 2nd major.
- Zipko, on 07/24/2008, -0/+3Instead of calling them hours we had credits that worked out to about 1 credit per hour if that makes it easier to think of. So a 3 hr/week course is 3 credits. But they do weird things with other courses, like a class with 3 hours lecture and 3 hours of lab is 4 credits not 6. So your 40 credits to graduate comes out to about 120 by the other standard, which is pretty normal for most schools that count credits like that. I graduated with 2 B.S. degrees and I think I had about 130 credits.
- macwac, on 07/24/2008, -0/+1Thanks Zipko for the clarification. Appreciate you taking the time to respond.
- KJSatz, on 07/24/2008, -0/+1Hurrah getting paid to go to a well-rated public school for my BS! I almost went to UChicago, but after I got accepted their financial aid estimate dropped by like 80%, and $45k a year of loans wasn't for me.
- spartan093, on 07/25/2008, -0/+2Most big name schools offer generous financial aid packages for students who are low-income or who can prove that they are not being supported by their parents. I go to a fairly prestigious university and since I get no help at all from my parents, the aid I've received has been fairly generous. In addition, there are also very low interest student loans you can take out. I live in a really ghetto studio where there are bums living in the apt lobby; I figure I can handle it for a few years until I graduate. I also work part time during the school year (I work two jobs during the summer) which not only helps with the bills but can help you gain valuable experience. Finally, I skip on the expensive bar hopping adventures that my friends often go on; stop buying alcohol when you're supposed to be learning and you'll be surprised how much you save.
I do have student loans out but I know for sure that it's possible to go to a fairly expensive school (if you really feel like you need the prestigious name on your diploma) and not end up with very much debt. Oh yeah, also stop eating out so much (that $3.50 slice of pizza isn't as cheap as it looks).
- santaliqueur, on 07/24/2008, -4/+41300k? you could go to a good state school for 45 years for that money. All colleges don't cost 50k/year.
- LANjackal, on 07/24/2008, -1/+23Reason: consumerism, pure and simple. It's engraved in the American culture and psyche, but it's unfortunately expensive and often requires spending far more than you actually earn. It has nothing to do with interest rates, media, the economy or any of that. It's all cultural. Americans shop and buy. It's what we do. The smart ones of us realize this is the wrong way to go about things and actually save to build net worth, but the rest buy and large dig themselves into a deep hole.
- JohnboiWaltune, on 07/25/2008, -1/+3You're going to die someday anyway, possibly today, and you can't take your savings with you. Might as well die with a large debt -- who cares about the kids' inheritance? I think this is the attitude many Americans have, even if they wouldn't articulate it that way.
- seanmx, on 07/24/2008, -0/+22Buy Now-Pay Never
- Stewdean, on 07/24/2008, -0/+15Buy Now-Pay Forever.
- digitallysick, on 07/24/2008, -4/+7Because we have no way to invest and actually make a decent amount off of our investment. How about i put money in a savings account and the bank give me 20% interest. The credit companies can do it to you and get away with it. So how can you do it and make money? its a system setup for you to fail, not succeed.
- locke2002, on 07/24/2008, -0/+1They don't give 20% interest banks accounts to the masses because the masses are dumb enough to pay out 20% on their credit card debts.
- ScottMitchell, on 07/24/2008, -1/+4Would you put money in a bank if there was, say, a 10% chance you might lose money? That's one of the risks that credit card companies face, which is part of the need for high interest rates. They also have transactional and sunk costs that are associated w/each account that must be paid.
- Dralite, on 07/24/2008, -5/+14Because having stuff is cool
- Antialias, on 07/24/2008, -0/+4Not saving/buying on credit means you'll have less stuff.
- GuyeNoir, on 07/24/2008, -0/+2...less stuff later. Buying on credit means I have more stuff NOW, consequences be damned.
- alexanEmpire, on 07/24/2008, -0/+2I guess the moral of that is: More is less.
- Joepoag, on 07/24/2008, -0/+0I like Stuff
- Dralite, on 07/24/2008, -0/+2That's an idea I can get behind... stuff is niiiiiiiiiiiiiice
- skinturtle, on 07/25/2008, -0/+1Oh yeah?..How ya liking that debt? How you going to feel when you can't pay it off.
Glutton
- Antialias, on 07/24/2008, -0/+4Not saving/buying on credit means you'll have less stuff.
- totorototoro, on 07/24/2008, -2/+108Congress and the White House just approved a $300 billion dollar bailout to people who went into debt taking home loans they couldn't pay back, for houses they couldn't afford. If the government rewards people who go into debt, where is the incentive to stop that behavior?
- wing05, on 07/24/2008, -0/+4I would hope to God or whatever deity you believe in, that there is accompanying legislation that tightens lenders from giving any more credit to people who are on the bailout program or any others who are teetering on the brink of financial collapse.
No more "pre authorized credit cards" or runaway credit for the gas guzzling SUVs, big screen TVs and other swag. - jpete71chevmal, on 07/25/2008, -0/+8Wrong. Congress didn't bailout the people. Congress bailed out the companies that didn't care whether a person could pay back the loan they applied for.
- spudhead, on 07/25/2008, -0/+2It also bails out people that lent money to others knowing there was no way in hell the loan could be paid.
If the government rewards people who loan money to those who have no means to pay it back, where's the incentive to stop home loans to the guy working at Burger World.
- wing05, on 07/24/2008, -0/+4I would hope to God or whatever deity you believe in, that there is accompanying legislation that tightens lenders from giving any more credit to people who are on the bailout program or any others who are teetering on the brink of financial collapse.
- executorzz, on 07/24/2008, -0/+9Actually the way we calculate a savings rate is absurd and needs to be updated.
Currently purchases of stocks, bonds, mutual funds (think 401K) are considered purchases and are not savings. If you include these places where many americans put their extra capital you would see the saving rate sky rocket.- brettg102, on 07/24/2008, -0/+4I would say anyone who doesn't invest in those things are retarded. What is a .3% APR on your savings goign to get you?
- ComradeRikhi, on 07/24/2008, -0/+30.3%? You should look into better savings accounts...
INGDirect has a 3.0% APY on savings and GMAC bank has a 3% APY for their money market account... - brettg102, on 07/24/2008, -0/+3I have an INGDirect savings...brick and mortar banks however offer about 10x less APR than online banks...and most people use brick and mortar banks. I was simply stating the absurdity of having such a low interest savings account.
- ComradeRikhi, on 07/24/2008, -0/+30.3%? You should look into better savings accounts...
- Stewdean, on 07/24/2008, -3/+1Stocks are not savings. They are a form of gambling. If you want to save then try cash in the right savings account. If the US economy tanks if you have cash or equivalent the value of your money goes up as everyone follows the market down.
Brettg102 really needs a reality check as he doesn't get it. First you can do much better than .3%, even in the US (in the UK I have a 10% savings account). Secondly you stand to loose a lot of money because of the high risk, now is not a good time for risk.- brettg102, on 07/24/2008, -0/+2I don't save in a .3% savings account. I was stating the absurdity of those that do. Most brick and mortar banks offer that though for savings under 100k. For my savings account I have an INGDirect orange account at 3.00%. When it ever approaches a magical number I won't say, the excess cash gets turned into long-term mutual funds that will yield far over the savings account rates.
- DaDrake, on 07/24/2008, -0/+2Stocks are gambling? Oh please. Stocks can be gambling if you know nothing about it. But even if you didn't want to invest time into stocks, you could always just open an index fund (which perform better than mutual funds after fees). Not to mention, you should diversify your portfolio based on how old you are (the older you are.... the more bonds you have... the less risk). If the US economy tanks (lets say great depression) your investments WILL turn around (took the great depression 15 years, most recessions take 7-9 months). I would have LOVED to buy an index fund BEFORE the great depression (even tho index funds didn't exist... although they could have easily) because of how damn well the stock market in the USA has done (and in Europe, and in Asia... and EVERY SINGLE developed country).
Give me a break, stocks are a great investment ... buy an index fund and don't even worry about it. - executorzz, on 07/25/2008, -0/+1Actually if you have patience, now is the perfect time to buy into some really good companies at absurdly low prices. If you waited until the economy gets better you'll miss the enormous bump that comes after bottoming out.
- sodade, on 07/24/2008, -0/+1100% of my savings goes into stocks and my 401k.
- DaDrake, on 07/24/2008, -0/+2I hope you have an IRA also before stocks. IRA gives you more control (can put it in an index fund) without taxes on compounding gains.
401k are worst then IRA because they have less options (and usually a brain dead monkey are human resources pick the few choices for hundreds of employees). The only advantage to a 401k (compared to an IRA) is that employers usually match your investment to a certain percent.
So if your employer will
- DaDrake, on 07/24/2008, -0/+2I hope you have an IRA also before stocks. IRA gives you more control (can put it in an index fund) without taxes on compounding gains.
- brettg102, on 07/24/2008, -0/+4I would say anyone who doesn't invest in those things are retarded. What is a .3% APR on your savings goign to get you?