What is Digg?522 Comments
- WWFP, on 07/24/2008, -12/+197Because there's no incentive to save. Inflation is higher than the rates banks pay.
- Cancerkitty, on 07/23/2008, -3/+118I know so many people who do this. It's absurd.
- 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?
- 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" - MrSmith34, on 07/24/2008, -1/+8280% of financial problems are behavior problems. Many know better, they just simply have their blinders on.
- 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.
- 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.
- Rotzooi, on 07/24/2008, -4/+49If our car isn't bigger than our neighbors', my wife is going to divorce me!
- 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. - 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.
- joerod, on 07/24/2008, -2/+40because American society is based on what you have not what you can afford
- 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.
- 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. - 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.
- 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. - mobislink, on 07/24/2008, -4/+33"The more things you own, the more they own you."
Tyler Durden - 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.
- Amadeus2490, on 07/24/2008, -1/+26I know exactly what you mean by "car."
- brianboyko, on 07/24/2008, -0/+25Seriously? What the hell did Latvia ever do to you?
- Dunnion, on 07/24/2008, -1/+26Yes, its everyone else's fault people are in dept. I know alot of people who went to school, got loans, and worked 40 hours a week while in school to pay them off, I know people who make a crap living, but dont buy pretty shiny things.
Being in dept is your own fault, the lady in the article bought a house she knew she couldn't afford, who's fault is that? - 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, -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. - inactive, on 07/24/2008, -0/+24Don't bash Latvian education.
- 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...
- 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. - vinnybale4, on 07/24/2008, -0/+23Man I'm only sixteen, and reading the comments you guys have written
I'm afraid the society will be worse when i get to the age of buying a home or investing in important things.
Is it good to create a savings at this time in my life? - 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.
- seanmx, on 07/24/2008, -0/+22Buy Now-Pay Never
- 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.
- 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.
- 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. - penguinsix, on 07/24/2008, -1/+22Short answer: HOPE
People often hope things will get better tomorrow, and will go into debt to have a few things now hoping that things will improve so they can pay them off tomorrow.
The did a study once of why people bought cheaper fridges that used more energy (and thus cost) instead of higher priced, more efficient models. Same reason--HOPE. They hoped to get a nice one one day, but for now they'd just get by.
Anyway, just a random thought.... - 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. - 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. - 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. - 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 ... - 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. - FredFredrickson, on 07/24/2008, -1/+17If you can't afford it, don't buy it. Simple as that, friends.
- sugarazor, on 07/24/2008, -1/+17Easy answer? The 80s.
- brettg102, on 07/24/2008, -1/+16I cannot stand being in debt. It keeps me up at night...
my only current debt was a 3 years no interest TV purchase...I had cash on hand but figured I could invest it, make 10% over the 3 years, and have the price of the TV be less that way...so I did it...but it still bugs the ***** out of me. - 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. - Stewdean, on 07/24/2008, -0/+15Buy Now-Pay Forever.
- jimmyb3, on 07/24/2008, -5/+19Interesting article. Wait until the baby boomers with no savings hit retirement in force. They will vote into office anyone who promises to take money from those who DID save and give it to them. Similar to the one-time 401(k) tax that gets proposed and defeated from time to time in Congress. Except later it will not be defeated (as the baby boomer voting block swells to immense size) and will not be one-time only.
I have busted my butt to be successful and I am diligently saving for retirement. Obviously, I am not looking forward to the government taking a chunk of it to pay for those who took personal responsibility behind the barn and shot it in the head. However, if social security is not fixed or gradually phased out before the 11th hour, that is what will happen. America will continue the transition to socialism. And, please, Amerisocialists, save your retorts about why socialism is good for our country. K?
Rant concluded. - brettg102, on 07/24/2008, -3/+16Jesus christ...I totally agree. Shockingly stupid ***** people.
- DeFex, on 07/24/2008, -0/+13Save. yes. if you need something buy it after you have the money, not before.
of course if you want to buy a house there is not much choice. save as much as you can for the downpayment though.
credit cards. emergency use only. and wanting to go out the night before payday is not an emergency.
dont waste money on christmas and holidays. its not a contest. - Buzzbean, on 07/24/2008, -1/+14Then divorce her.
- 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" - jimmyb3, on 07/24/2008, -0/+13Absolutely. The earlier you start, the more time the savings will have to compound.
- 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.
- 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. -
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