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View Poll Results: What percent of people live by "managed debt"?
0-25 11 6.96%
26-50 12 7.59%
51-75 80 50.63%
76-100 55 34.81%
Voters: 158. You may not vote on this poll

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Old 03-07-2005, 10:09 AM   #1
sonicblue
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Default What % of the population lives by "managed debt"?

Given my own attempts to eliminate our own debt, I'm constantly wondering exactly how many other people are, or are not, doing the same thing. There are so many gurus out there now (Suze Orman, Dave Ramsey) who preach debt-free living and shun any form of debt. On the surface, we all know this is the right thing to do but the practicality of it isn't as easy. However, I can't fight the feeling that there are still many, many people who could just flat out give a crap how much debt they have.

Example: when I was in high school - circa 1990 - to see a BMW 7-series was nearly like a unicorn (at least where I was, and I lived nearly some decently affluent areas). Nowadays, 7-series still run in the $80K range and I see LOTS of them. I'm assuming there suddenly aren't that many people who can truly afford the "buy" payment ($1,300-ish, 6 yrs, 5%), so are that many more people leasing? Current lease special is $799/36 months with $5K out of pocket. Doesn't that qualify as a horrendous financial decision ($34K spent on a car you won't own)?

So, I'm coming to the conclusion that, still, most people simply live by managing debt, not necessarily making the "right" decision often, if ever. Just curious as to OT's opinion: how many people out there would say - eff it, for $799/month, that 7-series is hot and a bargain at that price, and how many are driving cars they paid cash for?

NOTE: If you paid cash for an $80K car 'cuz you have it lying around the house, stay out of this. You're not normal .........

wait for the poll......
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Old 03-07-2005, 10:22 AM   #2
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Overextension of finances is becoming more and more common. Hell, look at all the "Car For Sale" classifieds on this board. How many 1 or 2 year old cars do you see?

It's insane. I'm glad I got out of that habbit quickly.
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Old 03-07-2005, 10:25 AM   #3
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i don't know any numbers, but i bet it's a lot more than you think.

another 3K, and i'm out of that sitcheeeation...and i don't plan on going back anytime soon.
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Old 03-07-2005, 10:27 AM   #4
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I refuse to lease a car, and pay extra towards my car payment and mortgage every month. I am scared to death of overextending myself to the point where if I can't pay off the credit card every month, I feel sick to my stomach.

To me, debt and my porn addiction are eerily similar:
I hate it.
I need it.
I want to get rid of it, but that just ain't gonna happen anytime soon.
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Old 03-07-2005, 10:27 AM   #5
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I ****ed myself.. Ill tell you that. Just so I could get a "bling" car. I am 20 years old, go to college, have a job and already have a $17k loan for my WRX I think about selling it already every now and then, just because financially it was stupid, but I am stupid.

-Rob
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Old 03-07-2005, 10:32 AM   #6
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americans seem to be more comfortable portraying the image of wealth than actually trying to earn wealth.

leased luxury cars, McMansion mortgaged to the hilt, counterfeit designer handbags, dual-incomes becoming a necessity to maintain the illusion . . . at what cost to our personal and family lives?

i've got my mortgage, my modest car payment, and some credit card debt floating around around which generally gets paid off every month. i'm as debt-free as i can be, and i still got it and it stresses me out. i can't imagine what some other folks deal with.
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Old 03-07-2005, 10:32 AM   #7
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Kinda like spending 5k for mods on your car, and you're still making payments! I know some people here do it and I think it's G H E T T O
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Old 03-07-2005, 10:34 AM   #8
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Quote:
Originally Posted by Yom
Kinda like spending 5k for mods on your car, and you're still making payments! I know some people here do it and I think it's G H E T T O
Yea. I may have been stupid to get a car I know I shouldnt have. But this is the reason I cut up any card that gave me more than a $500 limit because I knew I would spend it on mods.

-Rob
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Old 03-07-2005, 10:34 AM   #9
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jesus don't get me started on the retardation of america
the "gimme gimme"
the living like they make 300k when they make 80k
The house poor
The car poor
The ignorant masses who buy only the most expensive thing because they htink it MUST be the best.
The people who can barely afford thier house payments but go on vacation to aruba every year with thier whole family

the "I am almost a million dollars in debt and love it" house hold is growing TOO MUCH.
my parents for example are building a home for a million bucks, a modest home for my father, ranch, one floor and a basement, toys and such, mother and him will love it, custom designed by a friend of his.

now look at his neighbors, both in million dollar homes, middle aged(barely) 2 kids, a wife and a pet.
1 is an accountant, makes around 100k a year, decent living drives a brand new mercedes Truckuv wifey drives a 7 series and then there is the maid/babysitter. Brand new harley in the garage as well as a new remodeling basement coming after he saw what my father was doing wiht his.
House has rooms that are empty, bare just carpet. looks like hell inside because of it.
He is house/car poor

the other guy is 40ish makes probably half a million a year, has a nice ass house, a 1999 chevy truck he drives to work, and hsi wife drives an explorer from the 2k era i think. Brand new harley in the garage, reclaiming his youth as a fat white banker on a hog. house is bare, guy is in debt up to his eyeballs with the pool/house/building cost
he is house poor(wich is better than being both house and car poor)

Keep in mind neither of these guys can ever go out, they are always at home, no money for things outside of thier home, even to travel.

Then there is my father, getting close to retirment, has a massive nestegg he has saved up for, paid for the house already, hell he wrote a check for it.

All the years leading up to this my father lived in a 100k MAX home when we all lived at home, saving his money for his time when he no longer needed to work 18 hour days, and go to meetings all over the world, and drive a 1990 buick lesabre as a CEO of a major company.

Maybe it is just me, but if i make 80k i live like i make 50k.
We have explained this in another thread before, i think americans are getting to stupid with thier money. that is why you see multi million dollar homes all over, high priced sports cars all over, and the owners are not older men, they are 25-30 year old men.

being responsible wiht your money will help in the long run, being happy NOW will get you in trouble LATER, and i would rather be happy ENOUGH now, and REAL happy later, then happy NOW and have no retirment nestegg LATER.
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Old 03-07-2005, 10:36 AM   #10
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ibJanq

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Old 03-07-2005, 10:36 AM   #11
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American society in general encourages debt and poor spending, especially among the "middle class".

Americans expect to live luxuriously, and are told regularly that they can, without taking any responsibility. How many loan commericals do you see on TV now? Encouraging people to take out HELs for such pressing matters as "to go on vacation". It's the whole American mindset.

People used to have to struggle and save to live (and actually be) affluent later in life. Now people just do the "living affluently" part of the equation, and put it all on the credit card. I guess they never plan to retire; or else they'll just declare bankruptcy and be on their way.
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Old 03-07-2005, 10:37 AM   #12
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Preach it, brother OmahaSTI!
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Old 03-07-2005, 10:40 AM   #13
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And since someone will ask me,
I have debt, it is about 500 a month, I pay my car/insurance with it for GM dollars on my car, and then I pay it off right away. When I get my house I will put my house payment on it as well, then pay it off. the next day.
In 4 years I will then have 4k saved up for purchase of a GM vehichle(yes subaru/audi are under that hood i checked).
that is the ONLY debt I like, of corse you will have a mortgage, mine will be around 60k on a 100k home when we finish that deal up.

If i can't pay it off in a month/two i don't get it when it comes to the toys in life. cars/houses are the ONLY thing you should be in debt for, and cars are a MAYBE in my home, if you can't put down enough to finance 10k,
DON"T BUY IT DUMBASS!!!!
Your milage may vary, mine certainly has.





anyway,
I will await janq to clarify my points, he tends to think the same way IIRC.

Last edited by The Tree; 03-07-2005 at 10:48 AM.
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Old 03-07-2005, 10:42 AM   #14
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We just made the decision to lease a base model minivan because we're finally spent trying to fit car seats and other people in our cars. We only did it because my wife's car is still worth a good bit and we shunned any extravagant option (no power seats, no DVD, etc....), and I STILL feel guilty......
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Old 03-07-2005, 10:44 AM   #15
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Quote:
Originally Posted by AC Lerok
americans seem to be more comfortable portraying the image of wealth than actually trying to earn wealth.
excellent summation.
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Old 03-07-2005, 10:47 AM   #16
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Quote:
Originally Posted by sonicblue
We just made the decision to lease a base model minivan because we're finally spent trying to fit car seats and other people in our cars. We only did it because my wife's car is still worth a good bit and we shunned any extravagant option (no power seats, no DVD, etc....), and I STILL feel guilty......
I too feel guilty driving my ultra-luxo Legacy turbo. Been looking at that rock bottom base 4x2 Tacoma as I need a truck more than ever, but if I ever need to sell this car, I may even go with something older and more used (read less than $10K) just to avoid the debt and have the capability to SAVE.
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Old 03-07-2005, 10:48 AM   #17
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People carring all this debt has to be atleast partially responsible for this insane housing market. In Northern NJ you can't touch anything decent for under $300,000. There has to be a point where people just can't make all these payments. Maybe then I'll be able to afford something. I really should just leave this stupid state.
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Old 03-07-2005, 10:52 AM   #18
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Quote:
Originally Posted by OmahaSTI
cars/houses AND SCHOOL are the ONLY thing you should be in debt for
Fixed
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Old 03-07-2005, 10:52 AM   #19
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Quote:
Originally Posted by sasquatch95
People carring all this debt has to be atleast partially responsible for this insane housing market. In Northern NJ you can't touch anything decent for under $300,000. There has to be a point where people just can't make all these payments. Maybe then I'll be able to afford something. I really should just leave this stupid state.
If you think it's any better anywhere else you probably would want to live, you are in fo' a surprise!
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Old 03-07-2005, 10:54 AM   #20
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Another angle think about is that debt is not necessarily bad. The problem is that the majority of people do not have the knowledge/discipline to manage debt correctly. By leveraging your net worth you can gain far more income than you ever could being debt free. It's a bit riskier, but if you can borrow @ 5% and get 10% returns (in real estate, tax liens, equities, commodities, foreign securities, whatever) you will be far ahead of where you would of been had you not borrowed.

The other thing is that expensive things do not always cost more to own than cheap things. Remember that the owners of the McMansions are getting huge tax benefits and the guy driving that 360 modena can sell it for more than he bought it for...

The good thing about all of these people being over-leveraged is that the price of some things will go down. The people who played the game right will be able to get good deals on all of the stuff that is repo'ed.
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Old 03-07-2005, 10:54 AM   #21
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Quote:
Originally Posted by sasquatch95
People carring all this debt has to be atleast partially responsible for this insane housing market. In Northern NJ you can't touch anything decent for under $300,000. There has to be a point where people just can't make all these payments. Maybe then I'll be able to afford something. I really should just leave this stupid state.
You cant touch anything DECENT for under $400k within 30 miles of DC, and by decent I mean a 2 bedroom condo.

-Rob
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Old 03-07-2005, 10:55 AM   #22
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Quote:
Originally Posted by Neek
If you think it's any better anywhere else you probably would want to live, you are in fo' a surprise!
true, but if you're in California or Florida you're in California or Florida. If you're in NJ you're in NJ.
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Old 03-07-2005, 10:57 AM   #23
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NOVA, DC, NY, Mass, Cali, GA, FL, now the Carolinas...all rising in values like mad. Home affordability nationwide is dropping like a rock.

How does South Dakota sound?
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Old 03-07-2005, 11:01 AM   #24
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Quote:
Originally Posted by Soon2bSubbieowner
You cant touch anything DECENT for under $400k within 30 miles of DC, and by decent I mean a 2 bedroom condo.

-Rob
This is about 25 miles from DC (maybe 30). 3br split level house in Whispering Woods in Annapolis, MD. Actually, I'm surprised this house is that cheap. must be something wrong with it. $290,000
http://www.homesdatabase.com/cgi-bin...MFHKNqdQfTU%3d

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Old 03-07-2005, 11:04 AM   #25
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Quote:
Originally Posted by Neek
NOVA, DC, NY, Mass, Cali, GA, FL, now the Carolinas...all rising in values like mad. Home affordability nationwide is dropping like a rock.

How does South Dakota sound?
I've thought the same thing for a while now. However, I think affordability will change. Right now the prices are sky high. If they don't go down in price, then I predict a lot of values will level off and remain stationary for many years to come. A lot of houses in my area were worth the same in 2001 that they were worth in 1993.

YMMV

Also, this thread is starting to get hijacked.
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