Maybe we are in it and we don't realise? Depressions will look 'different' as society changes perhaps? It used to be obvious when people were poor; now its easier to cover it up. At least here anyway.
Does anyone else see an economic crash coming?
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The average person doesn't start with $100K.
I know we're all getting old but if you start early, with only a nominal amount, it adds up over the years.
Here's a hypothetical example. Start with $1000 and assume an annual return of 15%. That return is doable but obviously variable year-over-year.
Left column is year, right column is dollar value after the return and the return is rolled back in for the subsequent year.
In 4 years, your money almost doubles.
In 26 years, your $1000 is worth over $100,000.
In 30 years, you have almost a quarter million.
1 | 1150 |
2 | 1380 |
3 | 1656 |
4 | 1987 |
5 | 2385 |
6 | 2862 |
7 | 3434 |
8 | 4121 |
9 | 4945 |
10 | 5934 |
11 | 7120 |
12 | 8545 |
13 | 10254 |
14 | 12304 |
15 | 14765 |
16 | 17718 |
17 | 21262 |
18 | 25514 |
19 | 30617 |
20 | 36740 |
21 | 44088 |
22 | 52906 |
23 | 63487 |
24 | 76184 |
25 | 91421 |
26 | 109706 |
27 | 131647 |
28 | 157976 |
29 | 189571 |
30 | 227486 |
|
We are in a depression. And when the music stops there are not going to be enough chairs and the empire collapses and everything with it.
There are no free lunches. You are paying one way or another.
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I'm with @old tex
Use a credit card properly and you do get, as you call it "a free lunch". It's those that don't control their CC spending and payments that are paying for my lunch.
We all pay retailers an extra 3% for credit card use but that's part of doing business. My card gives me 1-5% CASH back and most of my purchases are in the 5% category so my no-fee credit card actually pays me many hundreds of dollars per year.
We purchased a car on a credit card. The dealership was a bit surprised when we asked if they took Visa. There were a few hundred dollars that could not put on the card - some laws about certain taxes or whatnot not being able to be charged. But 95% of the car's purchase price went onto the card. Which we paid off at the end of the month, so zero interest. And that gave us a whopper of a "cash back" from the credit card issuer. This was a Costco credit card - so that cash back was indeed cash back rather than airline miles, or "points", or something less flexible. You do have to have a good credit rating to get a card issued with a credit limit high enough to buy a car.
Remember, "using credit" does not mean "paying interest". It only equates to paying interest if you are using that credit to pay for things that you can't afford (or choose not to pay directly for, for other reasons).
Credit is not a bad thing to have, if you know how to use it. But most certainly, if you're irresponsible or don't know what you're doing, you can really dig yourself into a hole. Problems occur when credit is extended to people who are not credit worthy. That is a very bad mix, but it's a commonly seen mix. And sometimes you see those non-credit worthy people expecting others pay off their debts when they get themselves into trouble.
That's the way you do it!!!
Why pay with a check and lose $400 in free money?
My last 'cash back' that I cashed-in was $437.
I like free money!
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Hmmm.
We bought 3 SUV's this year. In each case, the dealer would only allow us to put $5K on a CC towards the purchase.
We bought 3 SUV's this year. In each case, the dealer would only allow us to put $5K on a CC towards the purchase.
Did your card have a $5K spending limit on it?
Either way, you still have work to do.
My CC companies will give me more than 10X the rope I need to hang myself.
But I work them shamelessly because they have billion$ flooding in from stupid people that will pay 25.9% interest, and they will happily give me a cut of it.
Was it the car dealer imposing the limit, or your credit card company? Or maybe even your state laws imposing the limit? In my case, the dealer was a company dealership, not an unaffiliated place.
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Each time, it was the dealership. They knew they were going to pay the 3%.
Not sure about the laws
Not sure about the laws
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Probably.
That probably set you back more than my house cost me back in 1982.
We (my daughter) bought a new RAV-4 and I bought (2) lightly used Mazda CX-5's. Around $90K total.
For the record, both Mazda's were purchased with... gains made from the stock market in the last couple years.
guy i know ran all his monthly bills through a cc and it give something back like credit at grocery store he used. he paid off each month..but by doing it once a year he told grocery how many whole chickens he wanted..the full value of credit on cc. so he got a full years worth of chicken by doing that for free.filled freezer once a year.
Were you talking about me?
I call it 'laundering'.
I run/launder about $30,000 thru mine each year.
Only the electric company requires transfer from checking.
About 7 years ago we had a cc that had an advertised deal going. You build up your 1% back up to $750 & they would pay you $1,000, built it up to $1,000 & they would pay you $1,250, build it up to $1250 & they would pay you $1,500. We collected the $1,500 twice before they were bought by a bigger bank & it ended the "deal.
I think that I was wrong on the above numbers. I believe if you had $1,000 built up they gave you $1,500.
Oh & our Sam's cc we get 3% & 5% back on restaurants & gas (I can't remember which earn what). After the above deal ended we switched & started using our Sam's card as our primary. That ended when we went over our limit. It turned out that I only had a $14,000 limit on that card & above our normal stuff I charged a AC compressor & instillation. I talked to them about changing it, nope their ultimate limit was $20,000. Let's just say I was a little torqued. So.....I almost closed that card (wife talked me out of it) but I did switch everything to our other CC which had a limit double of Sam's & it paid the same 1%.
I think that I was wrong on the above numbers. I believe if you had $1,000 built up they gave you $1,500.
Oh & our Sam's cc we get 3% & 5% back on restaurants & gas (I can't remember which earn what). After the above deal ended we switched & started using our Sam's card as our primary. That ended when we went over our limit. It turned out that I only had a $14,000 limit on that card & above our normal stuff I charged a AC compressor & instillation. I talked to them about changing it, nope their ultimate limit was $20,000. Let's just say I was a little torqued. So.....I almost closed that card (wife talked me out of it) but I did switch everything to our other CC which had a limit double of Sam's & it paid the same 1%.
My name is Bill and I am a CC junkie. The problem is when I pay off a card to zero they raise my limit and increase my credit score...
How many people in the next year will lose their house or have a lien put on it because of credit card debt.....
How many people in the next year will lose their house or have a lien put on it because of credit card debt.....
I expect that would be limited to non-credit worthy, irresponsible, or just plain stupid credit card users. There really are no if, and's or but's when it comes to spending more money than you actually have or can reliably predict you'll have in short order.
Sorry, but if things get to the point of losing one's house over credit card debt, there's pretty much no helping that level of stupidity. Destroy the credit cards and seek out professional help (which is different than "loan forgiveness"). This will in all likelihood require declaring bankruptcy and being screwed for many years (not to mention all the other people you screwed by declaring bankruptcy).
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I agree, but I bet it's going to get alot worse
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Well, not me. I hate debt.
Debt is slavery. But most people don't realize it.
Stay in your ivory tower among friends of your same ilk.....there are a bunch of average people out there that are going to crash and burn as the economy does another pump and dump.
Would you like a graph with that order?
See if you can tell Trump years from Biden years.
The thing about this topic is that much of it is based off of each person's experience. And those experiences are all different. What's more things that work one place may not work somewhere else. And mix in with that is just out & out luck (I'll give an example of that below). But we all have to do what we think is right, partly on what have seen & party off of what we imagine will happen if something happens. And that something that happens is in the future & who can tell what's in the future? As the saying goes, you bets your money & you takes your chances. That's life.
Luck: I bought a house while I was in the military & ended up not returning to it for something like 9 years. From the time I bought it until 9 years later it achieved an increase in worth of 9 percent, that's an average of 1% per year. I sold it & bought another house & put the money from the first house on the balance. One could assume that a normal return of our newer house would be 1% per year (unless we under or over paid). Nope, oil prices zoomed & the oil fields got very busy, which were about 100 miles from here. So over the next 7 or so years we didn't gain 1% in value, our house tripled in value. I paid $115.500 for our house, a while back it was estimate that it was worth $330,000 or there abouts. But wait, they built new houses, same lot but 1 street over & they sold them for over $700,000 (asking $799,000). That was 3 of them & the biggest was only 100 sq ft better than mine. Same thing is happening 1 street over the other side of us & I expect they will be in the same price range.
Did I somehow expect that to happen, maybe 2nd sight, nope. I was just lucky. Luck can change for all sorts of reasons, like location etc..
Luck: I bought a house while I was in the military & ended up not returning to it for something like 9 years. From the time I bought it until 9 years later it achieved an increase in worth of 9 percent, that's an average of 1% per year. I sold it & bought another house & put the money from the first house on the balance. One could assume that a normal return of our newer house would be 1% per year (unless we under or over paid). Nope, oil prices zoomed & the oil fields got very busy, which were about 100 miles from here. So over the next 7 or so years we didn't gain 1% in value, our house tripled in value. I paid $115.500 for our house, a while back it was estimate that it was worth $330,000 or there abouts. But wait, they built new houses, same lot but 1 street over & they sold them for over $700,000 (asking $799,000). That was 3 of them & the biggest was only 100 sq ft better than mine. Same thing is happening 1 street over the other side of us & I expect they will be in the same price range.
Did I somehow expect that to happen, maybe 2nd sight, nope. I was just lucky. Luck can change for all sorts of reasons, like location etc..
Ok now stop. Yes there are a very, very few people who through no fault of their own end up in credit card hell. I admit it!!! But having said that I haven't met a single one of them. Those I see in CC hell are there because they have a spending problem. They are in one of 2 categories, either keeping up with the Jones or instant gratification types. Is it their fault, mostly yes. Partly it's either the parents or education systems fault (Yes way back when the education system used to touch on interest, ect. I know because I remember it). That's the "systems" fault. The parents fault is obvious because they should have taught them but didn't. I still say that it's "mostly" their fault because they have access to calculators & probably have a brain & well, they didn't figure it out. Simply put, you don't "SUDDENLY" go bankrupt. All along you were probably living on the edge & didn't realize the danger, because that's just life. Break an arm or a leg, not able to work & all of a sudden, you're behind the power curve & in a downward spiral. Everything wasn't great & all of a sudden something happened & it went to (you know). It was you know all along & you just didn't see it. Example: One of my Bil's had to declare Bankruptcy but it wasn't their fault. It was the fault of the debt consolidation company they when to & they declared BK & didn't make the needed payments & IT HAD NOTHING TO DO WITH THE 2 TIMES THEY HAD REFINANCE THEIR HOUSE TO PAY CREDIT CARD DEBT, ABOSOLUTLY NOTHING. We bought houses close to the same time (within a few years). When mine was paid off he owed triple for the purchase price of his house. They learned nothing & probably still haven't.
Additional:
Like MBill said, many people had no choice but to lean on credit to survive the soaring inflation.
I am optimistic that recovery is possible.
Especially when the prices of fuel plummet.
It is figured into the price of EVERYTHING and will drag prices down when it does.
Like MBill said, many people had no choice but to lean on credit to survive the soaring inflation
.I am optimistic that recovery is possible.
Especially when the prices of fuel plummet.
It is figured into the price of EVERYTHING and will drag prices down when it does.
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