2007-02-01 07:24:21 · 6 answers · asked by Claudio F 1 in Business & Finance ➔ Personal Finance
People have been convinced that the only way to buy things is by financing it. Everything from furniture, TV's, stereos, to gas and cars, and education...is financed. Bottom line, if you can't pay cash for it, then you can't afford it and you probably don't need it anyway.
America has got to get responsible. NO CREDIT!
2007-02-01 11:02:25 · answer #1 · answered by djollie111 3 · 1⤊ 0⤋
No, it is true. We have a *dis*savings rate in the US now. This essentially means that we have spent more than we have earned. To me it doesn't really seem that outlandish and I was surprised we didn't reach this mark 10 years ago.
Why is it happening? Because of the excessive availability of debt. I could easily spend 2-3 times as much as I earn even if I'm in one of the top 2 income brackets in the US. The average person does not make rationally well thought out decisions. They make rash and hasty ones that can affect them for some time to come. Plus, many people are addicted to one thing or another that becomes very financially disabling.
2007-02-01 17:14:25 · answer #2 · answered by CoolFin69 2 · 0⤊ 0⤋
Always be careful of accepting someone else's statistics. Unless you know who came up with the numbers, the data they used, and the interpretations they applied, you should not judge their validity.
It is my understanding that the above numbers represent savings accounts in banks. A more relevant statistic would be to determine the wealth of all the people in the US. It may be as high as 13 trillion dollars.
Savings in a bank will get you 3 to 5% interest. If you take savings out of the bank and invest in a stock mutual fund, your rate of return might be 10%.
The value of your assets does not change by doing that, on the day you do it, but the statisticians count that as a loss in savings.
2007-02-01 15:41:49 · answer #3 · answered by regerugged 7 · 0⤊ 0⤋
Not mine. I save 20-30% of my income and invest. I have zero debt other than my fixed mortgage.
Answer to your question: Most people live way above their means and have 2-3 credit cards maxed out making min payments.
2007-02-01 15:32:36 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Because too many people think having "stuff" is a wealth indicator, rather than having money making you more money being and creating wealth.
The gap between he rich and poor gets bigger simply because poor people SPEND all their money on things that cost them more money and the rich spend it on things that make themselves more money... YES it is that simple. I came from a poor family and will never go back to that. I CHOOSE to have money and keep it !
2007-02-01 17:41:22 · answer #5 · answered by Kitty 6 · 0⤊ 0⤋
there is over 1 trillion in personal debt not including mortgages. People need to start paying cash for stuff.
2007-02-03 20:43:12 · answer #6 · answered by toledogolf 4 · 1⤊ 0⤋