thanks to a recent monetary windfall (stock gains), I have paid off one of two CC's and only have about $300 on the other. the only debt i have now is my car and it will be paid off next year! the feeling is wonderful... once again, I promised myself that I would not go in to thousands of dollars of debt! wish me luck!
Well my dad tied string around mine and then started playing with the string and whipping it while giving off a sinister laugh. Of course I couldn't run because of well... the string on the tooth. As for DEBT : Debt sucks. My parents taught me as a kid that credit card debt was a bad thing, so I never carry any balances. Paying cash for everything is the best way to go unless you have a rebate credit card that you can pay off at the end of the month. So, so far my debt is pretty much $0 and I'm content which is what's most important.
Who says you have it "on hand". I had staggered CD's back during the late 90's during the dot com boom that were earning about 7.5% (I think). As they become mature, you rotate them into other investments or other CD's. You're always investing. The only time you have it "on hand" is after you've sold your investments. It's not like I had $x thousand sitting under my mattress for years to pay for my car.
Debt is probably the single greatest invention in history. And probably the single worst, too. It allows people to have things they wouldn't normally be able to afford (like housing and college), but it also ties them to an albatross for a long time.
I'm suprised no one has mentioned Student Loans (or maybe they did and I missed it). Anyway... Student loan that will be paid off May 18, 2007! (Gonna have a big party that weekend!) No CC debt to speak of no car payment But just took on a 30 fixed mortgage it's all good!
As I recall...Manny invests a lot in CD's as well. I've always avoided personal debt. Car debt is Ok as it's the cost of having the use of the car...same with house debt...and investment debt can be reasonable as long as the investment makes sense and you manage your risk..but cc debt for dinners out, furniture, consumables and the like -- just silly -- pay off those cards!!!!!. We're just about debt free -- (house, student loans and car included!!) ...and...what a relief! It's allowed my wife to stay home with the kids and me not to work so hard. We'll be setting up an investment loan with rates so low...but it sure is nice not to be shackled still paying for things purchased long ago!
Exactly...I use to know this guy (Finance guy) who bought an Acura RL or TL with cash, and all of us were WTF...He could have earned a hell of lot more investing than sinking it in a depr. asset...Good Debt is your friend...
Well, I don't have any credit card debt of my own, but I inherited my wife's when we got married. She has roughly $4,000 debt as a result of multiple credit cards. The good news is that I just found out we are getting a nice insurance settlement from a wreck I was in, so we will finally be able to pay off these cards! Of course then I'll probably turn right around and buy a new tv on credit in a few months, but it will be nice while it lasts!
I find the "inheritance" of debt through marriage to be utter crap. Your significant other racked up that debt for god knows how long before they knew you... why should you be obliged to fix it. Just another clause in my pre-nup if i ever have a mental breakdown and actually choose to get married.
That's a lot of mis-information right there. There is a reason the car loan is at 4%, and if the car loan at 4% you will never find any investment options that will grantee 10-15% return. In order to get a better return than paying the car in cash, you must take some risks (i.e. invest in the stock market) (a simple explanation: the 4% car loan you are getting is an investment option for someone else which they get the 4% return, hence if there is other options that pays 10-15% for the investor, you wouldn't be get the loan at 4%)
Because they are not leveraged enough. Obviously, Microsoft has more money than investment opportunities. Most corporations have it the other way around and have to ration capital to only there most promising investment opportunities. By borrowing money, a company has the two fold advantage of a) Having more money available to invest b) The interest on borrowed money is tax deductible Of course, Microsoft may be keeping cash for other reasons. I seem to recall that they don't pay dividends which would explain part of it, and they may be keeping it to slash prices and fend off competition! Well managed debt is a good thing. It is simply a way of transferring money through time.
EXACTLY. A lot of people talk about how they have a big house note and can make much more money on their "investments" than they are paying on their house note. I don't think it works out that well for most people in reality. If I pay off a 5% house loan, that's a guarantee of 5% compounded savings for me. Do you know anything else that guarantees 5% right now? If you lock in at 5% and for the period starting from 5 and going to 15 years from now interest rates go to 10% AND you invest wisely all of the money you could have put into the house, THEN yes, you did well. That's a lot of ifs. I'll take my guaranteed money all the way to my bank account, thanks.
"Guarantees" may be too strong a word, but: 1 2 3 4* * closed to new investments Over any given short-term period, you're risking losing money, but over the long term these are terrific investments-- in addition to buying property/a home, of course.
...and don't forget student loans, for those of us without Mummy and Papa to pay for our tuition and car and rent. Damn it.
1. Given that personal debt is at an all-time high, including credit-card debt and mortgages. 2. Given that there are a whole lot of people who've maxed out and are not doing a whole lot more than paying the intrest month to month. 3. Given that the fed is about to raise the 50 year low 1% overnight rate, and that when it's as low as 1%, any increase is relatively severe. There is going to be an incredible rise in the number of defaulted loans over the next 6 months as well as people living on bread and water type existences. As a result there's going to be a massive recession that'll blindside everyone before they expect it, but prices will continue to rise due to the government's debt and the structural weakness in oil. Suddently, it's going to be 1975 all over again! Here we come stagflation! I'm so excited.
Well it's not like it's all hers. I've benefited from some of the purchases on those cards, so I can't fault her for all of it. It's not like it is something that bothers me or I even think about. I mean what are you gonna do....say I'll marry you but you are responsible for your own debt, I don't care how broke you get!?! That sounds a little strange to me...kind of like the married couples that have seperate bank accounts and switch off on who is going to make the purchase everytime they go out to eat or something. I never really understood that one.
