Author Topic: Are you spending your way to disaster? (Read 2903 times)

Gixer · « **Reply #30 on:** October 13, 2003, 04:10:14 PM »

Cool post, I know what you mean. I've unfortunetly been a addict of the "Live the Moment" generation. Hence just spent 5k on a motorbike and sidecar that I can't even ride on the road.

...-Gixer
~Hells Angels~

Chairboy · « **Reply #31 on:** October 13, 2003, 04:13:41 PM »

My parents had credit problems, so when I was growing up, they told me to stay away from all things credit and never told me how it worked.

End result of this, I entered the world convinced that credit cards were evil and didn't have a shred of credit until I was 20, when I realized that you MUST have credit in todays society. You need it for cell phones, to buy cars, houses, everything. So I began trying to create credit, but since my parents didn't teach me anything about it, I made some mistakes and had some blemishes on my record before I figured out how it all works.

I now have good credit and everything except my house is paid off, but I will not make the same mistakes my parents did. By ending any conversation about credit before it started with an admonishment of 'Credit is evil", my parents did me a disservice. There are positive and negative aspects to it, and I hope I will be able to do a better job preparing my kids for the realities of finance. Saying 'credit is bad' is just bad advice.

Chairboy · « **Reply #32 on:** October 13, 2003, 04:18:30 PM »

Oh, and in regards to making your money dance, when I say that I own a house, I should clarify: I own a four unit apartment building. The rents almost pay the whole mortgage (they would for sure if we didn't live in one of the four) and the building has gone from 389K to 674K value since I bought it.

Yay for me! Real estate is a cool business. Real estate that actively pays for its monthly expenses is even cooler.

rpm · « **Reply #33 on:** October 13, 2003, 04:28:38 PM »

I always kept my credit house in order and had several credit cards "just in case". Then I learned my lesson after my ex-wife maxxed out 3 cards in 2 months just before our divorce. Guess who got stuck with the bill. Now I have 2 cards with a $1000 limit on both. My house, vehicles and land are all paid for and my total debt is about $300. Credit cards with high limits are for suckers.

Hooligan · « **Reply #34 on:** October 13, 2003, 04:35:40 PM »

Sidecar?

How are you going to freaking lean into the curves hauling around a sidecar?

Hooligan

fullback · « **Reply #35 on:** October 13, 2003, 05:28:53 PM »

Economists with keyboards and free time are dangerous.

There will always be those who over-extend - consumers and companies. Reasonable debt is not bad.

U.S. consumer spending does provide fuel for a significant amount of the global economic engine. Reducing consumer spending (be it via credit or not) will create larger problems.

All mature manufacturing industries move production down the pecking order to lesser developed countries. Economic theories remain static for the convenience of those stuck in the world of academia, not for those in the real world. Analyzing current debt ratios through century old glasses and filtering is fanciful only for those who enjoy stale debate.

The U.S. consumer and government debt ratio is neither unsustainable, nor out of line. Unless you are an economics professor or a gold seller.

Even consumer debt creates jobs and circulates currency.

Rude · « **Reply #36 on:** October 13, 2003, 06:03:11 PM »

Quote

Originally posted by Chairboy
Oh, and in regards to making your money dance, when I say that I own a house, I should clarify: I own a four unit apartment building. The rents almost pay the whole mortgage (they would for sure if we didn't live in one of the four) and the building has gone from 389K to 674K value since I bought it.

Yay for me! Real estate is a cool business. Real estate that actively pays for its monthly expenses is even cooler.

Not one thing in life beats dirt as an investment:)

Sixpence · « **Reply #37 on:** October 13, 2003, 06:15:19 PM »

Quote

Originally posted by miko2d
For the older guys - do not spend money on medications/treatment that will prolong your life. Instead spend it on fun that would shorten it - alcohol, smoke, lose women, junk food, etc.

How is that for financial advice?

miko

Substitute good food for "junk food" and throw in a life ins policy for the kids.

I say buy all our raw material from everyone else while we can. When the earth starts running dry, we will be the only ones left with any resources.

BTW, anyone got a few bucks I can borrow?

miko2d · « **Reply #38 on:** October 13, 2003, 08:35:34 PM »

fullback: U.S. consumer spending does provide fuel for a significant amount of the global economic engine. Reducing consumer spending (be it via credit or not) will create larger problems.

You got it totally confused but at least you are in a good company. Consumer spending on consumption goods diverts resources from consumer spending on investment into productive capital - physical and intellectual.
Everything produeced is consumed and capital goods are just stages in producing consumer goods, so 100% of economy will always be consumer spending.

Reducing consumer spending (be it via credit or not) will create larger problems.

Yes, really big problems - like wifes staying at home and rising more children that are better cared for, shorter work hours to enjoy leisure time and most importantly high growth rates bringing even more wealth with less effort... Scary.

Economic theories remain static for the convenience of those stuck in the world of academia, not for those in the real world. Analyzing current debt ratios through century old glasses and filtering is fanciful only for those who enjoy stale debate.

Nexh thing you will say that mathematics that was applicable 100 years ago is now obsolete bacause 2x2 is not always 4. You cannot spend more physical resources that you produce, no matter how many coloured pieces of paper you print. You cannot invest into improved production what you consume. It was true in ancient Greece, it was true for Robinson Crusoe and it will be true forever while resource and time are scarce.

The U.S. consumer and government debt ratio is neither unsustainable, nor out of line.

What do you mean "sustainable"? If you mean that we can keep defaulting on it like we did in 1930s and 1970s, maybe it is - if there are suckers that would keep lending us the real goods. Check with me in 20014 when SSA runs dry and see if the debt is sustainable.

Even consumer debt creates jobs and circulates currency.

How does circulating currency benefits anyone? shuffle money bamong your pockets and see if your welfare increases. And why are jobs producing consumer goods any better than jobs producing capital goods and increasing future production?

miko

Sixpence · « **Reply #39 on:** October 13, 2003, 09:05:16 PM »

"Reducing consumer spending (be it via credit or not) will create larger problems.

Yes, really big problems - like wifes staying at home and rising more children that are better cared for, shorter work hours to enjoy leisure time and most importantly high growth rates bringing even more wealth with less effort... Scary. "

How can they save any money if they don't have a job , because their company went out of business because no one spent any money. If you want to save money, you need to earn it first. If there is no consumer spending, houses will not be built, washing machines, dryers, refrigerators etc., will not be bought. To say that consumer spending has nothing to do with a healthy economy is way off.

fullback · « **Reply #40 on:** October 14, 2003, 04:07:32 AM »

miko2d:

I made a mistake. I should not have posted to this thread in the first place. It is not a venue with participants schooled in, or functioning daily in, the world of macro-economics.

I mean no disrespect, but I will not respond to your parsing because we are at such completely different levels of understanding.

Gixer · « **Reply #41 on:** October 14, 2003, 04:57:45 AM »

It's a side car for dirt ovals, speedway. My mate does the leaning I just drive it.

...-Gixer

Quote
Originally posted by Hooligan
Sidecar?

How are you going to freaking lean into the curves hauling around a sidecar?

Hooligan

lazs2 · « **Reply #42 on:** October 14, 2003, 07:26:24 AM »

after a couple of divorces you get used to being in debt... Hving expensive hobbies and not caring about the future helps too.

Told my son that when I die he should strip the body while it's still warm and empty out the house and garage and then when the creditors sell the property take wahtever is left if anything. He thinks that is a very cool idea. He would rather see me have fun with my money.
lazs

gofaster · « **Reply #43 on:** October 14, 2003, 07:57:11 AM »

I think its amusing that we're having a discusion about the evils of credit card debt when every single one of us used a credit card to register for this sim.

gofaster · « **Reply #44 on:** October 14, 2003, 07:58:57 AM »

Quote

Originally posted by lazs2
Told my son that when I die he should strip the body while it's still warm and empty out the house and garage and then when the creditors sell the property take wahtever is left if anything.

And then you'll wake up from your blood-sugar black-out, cold and naked on the floor of your garage, wondering "WTF happened to my El Camino and gun collection?"