It’s astonishing how many people just have no clue about personal finance and economics topics. It’s just not that hard. Maybe something needs to be done at the High School level, to give more people some basic clue about how to deal with basic financial decisions.
This person clearly didn’t know bad advice when she got it.
There’s a relative of mine, some sort of step-aunt or something... she and her husband both have had good, well-paying jobs. Before the big crash they were into a third mortgage on their not-yet-paid-for house— all of that money borrowed went for vacations and cruises and other travel. Every penny they made was being sunk into those loans. They had no savings anymore, and of course massive credit card debt. They’d buy lavish presents for themselves on their cards, and then merely pay the minimum payment... never touching the principal, which just grew, and grew...
I simply don’t understand it. How can anybody be that big of a financial disaster?
Well...
Either they’re idiots or brilliant...
“Brilliant” as in getting all the goodies and then walking away from the debt and letting someone else pay for it all...
“I simply don’t understand it. How can anybody be that big of a financial disaster?”
They are not concerned as to how high the price is...they are only concerned as to “how much a month does it cost.”
The majority of people have absolutely no idea just how much the total price on their homes or vehicle adds up to when the bill is finally paid. In most cases they could have bought at least two cars or houses for the total combined cost of the purchase price plus total interest for the life of the loan.
To borrow on a paid off house to piss the proceeds of on good times, goodies you always wanted, and not for expansion of the home or major repairs to the house is the dumbest things a person could do.
When the financial world ends (and that may possibly happen soon) your PAID OFF HOUSE is your only sanctuary and assurance that you will not end up sleeping under a bridge.
I own two houses. One was built in 1951 and the other much newer. The old one is paid off and the other has an active mortgage on it. If the economy fails, the bank can have this one back and I will move back to the safety and security of my old house. It kind of gives me a “warm fuzzy feeling” to know that I’ve not squandered the financial safety that the old house provides.
It won’t be long that housing in the U.S. will resemble that of England. Council houses, owned by the city councils of each town will own and lease the majority of all housing within that city. Private ownership will diminish to the point that a majority will not be able to own private property.