California Is Insolvent (Broke) (2013, mortgages, loans)

[sunshine7793]

When you owe more than you have you are broke. And the California State Auditor says that CA is broke:

Capitol Alert: State auditor: California's net worth at negative $127.2 billion

[sunshine7793]

It's been suggested that we could make some progress on this problem if we sold off some of our state-owned assets. Like parkland for example. Some of those guys paying that 13% tax rate would give a pretty penny for an acre of land with a view of Half Dome (in Yosemite). That is if they have any money left after taxes.

[Mack Knife]

Almost every person with a house is broke then. Every person with a car loan is surely broke since it is probably worth 1/3 of the balance on the loan.

Think it through before you jump on the bandwagon.

If you have no income, no chance of generating income and all remains static, then yes, you are broke.

If you owe say $500,000 and have 100,000 in the bank are you broke? If you have no job, no other assets, yes. But what if you will make 3 million over the next 20 years? Are you still broke? Hardly.

There is a huge difference between cash flow, a snapshot in time and what happens over time.

[18Montclair]

Thats breadcrumbs compared to the US govt which is what?15, 16, 17 trillion dollars in the hole.

California might as well be China.

[slo1318]

Originally Posted by Mack Knife

Almost every person with a house is broke then. Every person with a car loan is surely broke since it is probably worth 1/3 of the balance on the loan.

Think it through before you jump on the bandwagon.

If you have no income, no chance of generating income and all remains static, then yes, you are broke.

If you owe say $500,000 and have 100,000 in the bank are you broke? If you have no job, no other assets, yes. But what if you will make 3 million over the next 20 years? Are you still broke? Hardly.

There is a huge difference between cash flow, a snapshot in time and what happens over time.

Yes if you owe $500k and have $100k you are broke.

[bigdumbgod]

<<yawns>>

Yeah, and we all shall be smote for our sins, blah blah blah. Keep wishing for the Death of CA. We'll still be here.

[EscapeCalifornia]

Originally Posted by Mack Knife

Almost every person with a house is broke then. Every person with a car loan is surely broke since it is probably worth 1/3 of the balance on the loan.

How do you figure this? Yes, many people are upside down on their homes, but hardly "almost every person." As far as cars, I think they're usually worth around half of the purchase price after 5 years, which is the term of most loans. Yes, there's a period right after purchase where its worth less than the loan, assuming you financed 100%, since it loses value the moment its driven off the lot. But over time, that decreases as the loan balance is reduced faster than continued loss of value.

[sav858]

Originally Posted by slo1318

Yes if you owe $500k and have $100k you are broke.

That is not the definition anyone uses for being "broke" at all. With that line of thinking the majority of homeowners with mortgages are "broke" then. If you can properly manage and pay down your debt that I wouldn't say one is "broke" at all.

[slo1318]

Originally Posted by sav858

That is not the definition anyone uses for being "broke" at all. With that line of thinking the majority of homeowners with mortgages are "broke" then. If you can properly manage and pay down your debt that I wouldn't say one is "broke" at all.

Just a negative net worth, plus he said nothing about it being a mortgage.

[Tex?Il?]

Originally Posted by Mack Knife

Almost every person with a house is broke then. Every person with a car loan is surely broke since it is probably worth 1/3 of the balance on the loan.

Think it through before you jump on the bandwagon.

If you have no income, no chance of generating income and all remains static, then yes, you are broke.

If you owe say $500,000 and have 100,000 in the bank are you broke? If you have no job, no other assets, yes. But what if you will make 3 million over the next 20 years? Are you still broke? Hardly.

There is a huge difference between cash flow, a snapshot in time and what happens over time.

I think most of us have just learned to ignore Sunshine.