What's new
By:

Debt

NAOS

NAOS

Well-Known Member
I've brought this up in several threads over the past couple of years, sometimes more explicitly than others, but I'll finally start a thread about it. Debt is the most important term to start from if you hope to have any kind of comprehensive knowledge about money and economic functions. Economic histories have often relegated it to a sub-list of terms.

I've also mentioned David Graeber's excellent history of debt, but I'm sure nobody here read it. Now you have a chance to listen to its main points in this BBC Radio production. There are 10 short episodes. Enjoy.

https://www.bbc.co.uk/programmes/b054zdp6/episodes/player
 
My father always said there were two kinds of people in this world, the ones who pay debts and the ones who collect them.

Unfortunately we were in the former category.
 
Not all debt is bad. It depends on the opportunity costs. A car loan makes sense if the cost of the loan is offset by gains made with the rest of the money you could alternatively pay out up front. I bought a car once at 1% interest, so instead of paying it all up front, I left the remaining $25 grand in the account I had it in where it was pulling about 8% or so. So in the end I was money ahead to buy the car on a loan. It also depends on your individual situation and need. If there is something you must have (not want, true need), say a car to get to work, for example, and the only way to get one is to incur some debt, then that could be a better option than to not work because you don't want to incur the debt. I don't think the answers to these questions are ever that easy.
 
We were talking about Debt in Elders Quorum a few Sundays ago. It actually got pretty heated....This man keep saying the only thing I'll ever put on credit would be a mortgage. Said anybody that finances a car is stupid and that all there cars were paid for in cash. That's where the debate happened. Some of us don't work for ourselves and make well over 6 figures....So of us need to have a way to work and want a dependable car to make the 30-40 mile commute.

I happen to be a debt collector and I can see the importance of understanding your credit and not over extending yourself. But simple things like a car payment, I don't feel to bad about! Some of the things I collect on.....Honestly, lets finance 55,000.00 for Solar panels over 10-12 years at 15-17 % after there Same as Cash Expires.....Surprising, not a lot of people can pay off 55,000.00 over 12-18 months and get smack with thousands of dollars worth of interest... Just crazy sometimes.
 
just an opinion, and a rather uneducated one at that

(sorry Naos, I've only had a chance to listen to about half of the first audio file - the one at the bottom of the list in the link - I found it very fascinating and hope to listen to the full set over the next couple of days...
wondering if I can download to my ipod shuffle...)

at any rate, I think one of the problems that arose more recently with the "debt crisis" was due to the way debts were collateralized into securities - and the demand for the collarteralized debt securities drove lenders to be overly aggressive in their lending policies which brought folks into the debt system who didn't really know what they were getting into

(OK, end of my simplistic mini-rant)
 
and yes, I imagine some of you have pegged me as swallowing the "liberazi's" story "hook, line and sinker"

(how do you spell "liberazi" anyhow? and am I using it correctly?)
 
Early in my marriage we got into the bad kind of debt. Eventually, we tossed all of our credit cards, paid cash for anything/everything we "wanted", and five years later, were completely (consumer) debt free. We still pay an ***-load of medical bills every month from crazy pregnancies and liver failures from the last ten years, but other than that, we ain't got no debt.

Yay for us, right? Wrong.

We were considering getting a new car, since both of ours have been on the edge of falling to pieces since, like, forever, so we went to LHM to just look around. We had one of the salesmen look into financing for us and that's when we got the bad news: Our credit is pooh. My wife actually had her score return as ZERO, which I've read is impossible, but we had another lender at our CU look into it as well and it came back zero again. Mine? Better than zero, but not by much. I haven't missed a payment, been late on anything, or owe money to anyone that's not a Dr. -- and haven't for years -- and apparently, that's not good. I felt, and still feel like a moron for not knowing that. Dat high school diploma, doe.

tl;dr

You have to have some debt, even if it's tiny, or else you can kiss getting any type of credit goodbye.

#genius
 
Justys said:
We were talking about Debt in Elders Quorum a few Sundays ago. It actually got pretty heated....This man keep saying the only thing I'll ever put on credit would be a mortgage. Said anybody that finances a car is stupid and that all there cars were paid for in cash. That's where the debate happened. Some of us don't work for ourselves and make well over 6 figures....So of us need to have a way to work and want a dependable car to make the 30-40 mile commute.

I happen to be a debt collector and I can see the importance of understanding your credit and not over extending yourself. But simple things like a car payment, I don't feel to bad about! Some of the things I collect on.....Honestly, lets finance 55,000.00 for Solar panels over 10-12 years at 15-17 % after there Same as Cash Expires.....Surprising, not a lot of people can pay off 55,000.00 over 12-18 months and get smack with thousands of dollars worth of interest... Just crazy sometimes.
Click to expand...

Well that is an inflammatory comment, so I can see why things got heated.
 
For the most part, my wife and I aren't stuck with an overload of debt. Currently our debt consists of our mortgage and central air, though in the case of the central air we got interest-free financing. We use our credit cards all the time but pay them off monthly and we never had student loans. My wife has to get the credit for that though. She worked herself through school before we were married and worked me through school for a couple of years after we were married.
 
I will take all the cheap money I can get my hands on. I average paying about 3.8% on borrowed money and lend it out for an average of around 18% at no greater than 25% LTV. I now make more money loaning money than in my current core business.
 
Dr. Jones said:
I will take all the cheap money I can get my hands on. I average paying about 3.8% on borrowed money and lend it out for an average of around 18% at no greater than 25% LTV. I now make more money loaning money than in my current core business.
Click to expand...


When was the last time you cancelled a debt? When was the last time one of your usurers cancelled one of your debts? If not out-right cancellations, when was the last time you were involved in a negotiation in which the lender took a financial hit relative to expectations?
 
You must log in or register to reply here.

Share this page
Back
Top