Linked by Howard Fosdick on Tue 8th Nov 2011 02:17 UTC
Editorial We've all had the idea, even if we've never pursued it. We just know we could make money in the stock market, based on our tech knowledge. We live and breathe tech. Why not profit from it?
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RE[3]: Invest by paying of debt
by daddio on Wed 9th Nov 2011 05:27 UTC in reply to "RE[2]: Invest by paying of debt"
daddio
Member since:
2007-07-14

OK. I'll bite.

All those "stats" are excrement.

Young peoples net worth is lower exactly BECAUSE they have financed their lifestyles with debt, which was anathema in previous generations.

Nothing more nothing less.

Reply Parent Score: 2

Alfman Member since:
2011-01-28

daddio,

"Young peoples net worth is lower exactly BECAUSE they have financed their lifestyles with debt, which was anathema in previous generations."

All of the debt items above are incurred by "responsible" expenses such as health care, education, and housing. I actually excluded things like credit card debt which might be indicative of irresponsible discretionary spending. This was to illustrate that we are worse off financially even before considering bad financial choices.

I believe credit has done a great deal of harm - it's basically a form of taxation on the middle class by the rich. The mere availability of credit has driven up home prices to price points where the middle class are dependent upon mortgages to get a home. So, I actually think we'd be better off if credit were outlawed - then the prices would come down to what people could afford.

As it stands, someone like me cannot afford a home without credit and it's not the result of personal financial irresponsibility.

Take a look at the cost of housing, for example:
http://www.census.gov/hhes/www/housing/census/historic/values.html

The data ranges from 1940 to 2000 (adjusted for inflation in 2000 dollars).

1940 $30,600
1950 $44,600
1960 $58,600
1970 $65,300
1980 $93,400
1990 $101,100
2000 $119,600


Now look at education:
http://inflationdata.com/inflation/Inflation_Articles/Education_Inf...

The graph shows an inflation of 500% since 1985

Next look at health care:
http://www.cbo.gov/ftpdocs/89xx/doc8948/01-31-HealthTestimony.pdf

Figure 1 shows per capita costs increasing 550% (after inflation) from 1965 to 2005


None of these are really "discretionary", what's more is that education and health care benefits are shrinking so more of us are paying a larger portion out of pocket than historically.

Lets not forget that employee retirement plans have switched from employer funded pensions with guaranteed payouts, to employee funded 401ks with no guarantees at all. US Social Security is foretasted to fail to meet it's obligations for my generation who are never-the-less paying into it today.

I don't know anything about your financial situation or even your age, but I hope you might you might have a little heart and admit that, yeah, it is getting more difficult these days even if you are responsible.


The thing is, we don't even have a GDP problem, by that metric we're doing pretty well:
http://www.multpl.com/us-gdp-inflation-adjusted/

The problem is that all the profit has been going to the top.

Reply Parent Score: 2