Monday, July 20, 2015, AM | Leave Comment
As I have said many times, there are good debts and bad debts. When you borrow capital to buy a home for your family, traditionally that’s considered good debt. The real estate market in many neighborhoods is still down. This might be a good time to invest in real estate if you can afford it.
If you stay in your home for several years and don’t sell it in panic, it will eventually give you a good return on your investment. I considered that good debt.
Bad debt would be something like you borrow money for whatever reason and you spend it right away without investing in your home or education that can potentially give you some kind of return in the long term.
Instead you spend it on clothes, vacation, eating out and other similar adventures. That’s a waste of borrowed money and will definitely get you in deep debt shit. And that’s the kind of shit you keep stepping into.
A time comes when it smells so bad even your close friends start avoiding you.
A while back, I did a post about a “sweet” woman who kept getting into debt with no end in sight.
The current post is a reminder how some people are careless not to think about tomorrow. They don’t realize their life is on a financially destructive path until they get in deep debt shit that they are unable to get out.
Many folks keep slipping not only in their financial life but life in journal. They have nightmares if they are able to sleep. They encounter sleepless nights they can’t do “nothing” about.
They cannot stay in good relationship with their partners. Bad finances create all kinds of problems. Your health might get deteriorate especially your mental health. Many times it’s their own making, their own carelessness about their finances.
When you enter a tunnel with so much burden of debt on your shoulder, you just keep going in deeper debt. There is no end to the debt tunnel.
The question in the woman’s case is not how much her income was. Her husband was giving here $20,000 a month. For most people in the United States, that’s an ideal income. During one of the debates between Barack Obama and John McCain, Mr. Obama said only 4% of the American population was making more than $104,000.
That means the woman’s husband was giving here enough that she could be considered in the top 3% of the population who make at least $104,000. In other words, her income is more than that of at least 96% of the population.
At one point, whether you hear or see, you are advised to stop looking at the Jones and try to live your own life and by yourself. For no more than a minute or two, you follow their advice of how to get out of your deep debt – more like deep shit to me.
I thought all this was hypothetical until I read the story about a “sweet” woman as the author – Ben Stein – calls her.
Ben describes the woman case in an article in the New York Times online. It was published on Jan. 24, 2009.
My family of four live debt free – and I thank God for that – on a super duper income of a little more than $60,000 a year. Not only that, we pay a generous amount to Uncle Sam out of that income.
We have realized long time ago what debt is. We use credit card for almost everything, even a gallon of milk.
In a Nutshell
Do think about the fact that your financial situation can change really quickly. It has changed for the worse the last couple of years for many people.