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Well, what if the zombie apocalypse occurs tomorrow?
FYI, the "Great Recession" in 2008 was the worst economic event since the Great Depression which officially began in 1929. That's nearly 80 years, and at its worst, conditions were never, ever as bad as in the Great Depression, primarily because the government and the Federal Reserve worked together rather than sacrifice the economy (and the country) on the altar of ideology the way many economic/financial reactionaries wanted. The Great Recession also didn't last nearly as long as the Great Depression, which was still weighing down Americans 10 years later, and it affected a much smaller percentage of Americans than did the Great Depression, too.
Most "disasters" (forgive me, I have a degree in the subject) occur on a personal level.
Example:
Far more people loose their home to a house fire than to a hurricane or tornado every year.
That "disaster" impacts them, and perhaps 1-2 more people.
Economic "disasters" happen the same way.
Someone was fired today. To them, it's a life changing event (the old: it's a recession if your neighbor looses his job, a depression if you loose yours.)
When I was in my car wreck, it changed my life. Didn't really impact many other people though....
Don't fear zombie apocalypse's, Martians landing, or the Yellowstone Caldrin exploding.
HOWEVER: 99.99990% of people will:
Loose a job, deal with illness/injury, loss of a loved one, etc.... Which may not impact anyone else, but can have serious (including financial) impact upon their lifestyle and perhaps livelihood.
If you sign a 30-year contract in such a way that it hurts you if something happens in the first 10 years, and that event happens once a century, this is 10 years at risk out of a century, or 10%. This is not negligible.
The point I'm trying to make is it is not so simple as what happens to the portfolio over a 30-year period. If there were no payments due for 30 years even upon sale, then absolutely it is virtually risk-free. But this does not describe the real world.
You and Dave Ramsey can live your lives in fear, but not me. There's no sure bets about anything, except that once you're born, you'll eventually die.
If you fear debt, then you'll doom yourself to crappy jobs because you won't be able to afford to go to college or trade school unless your parents are so well heeled that they can afford to pay the full freight for it. Most Americans can't do that.
If you fear debt. then you'll probably never own a viable small business because using credit is necessary for almost all operations.
If you're forced to work crappy jobs because of a lack of a degree or job skills, how are you going to manage to save for retirement?
Most "disasters" (forgive me, I have a degree in the subject) occur on a personal level.
Example:
Far more people loose their home to a house fire than to a hurricane or tornado every year.
That "disaster" impacts them, and perhaps 1-2 more people.
Economic "disasters" happen the same way.
Someone was fired today. To them, it's a life changing event (the old: it's a recession if your neighbor looses his job, a depression if you loose yours.)
When I was in my car wreck, it changed my life. Didn't really impact many other people though....
Don't fear zombie apocalypse's, Martians landing, or the Yellowstone Caldrin exploding.
HOWEVER: 99.99990% of people will:
Loose a job, deal with illness/injury, loss of a loved one, etc.... Which may not impact anyone else, but can have serious (including financial) impact upon their lifestyle and perhaps livelihood.
For your information, "loose" does not mean the same as "lose".
Most "disasters" (forgive me, I have a degree in the subject) occur on a personal level.
Example:
Far more people loose their home to a house fire than to a hurricane or tornado every year.
That "disaster" impacts them, and perhaps 1-2 more people.
Economic "disasters" happen the same way.
Someone was fired today. To them, it's a life changing event (the old: it's a recession if your neighbor looses his job, a depression if you loose yours.)
When I was in my car wreck, it changed my life. Didn't really impact many other people though....
Don't fear zombie apocalypse's, Martians landing, or the Yellowstone Caldrin exploding.
HOWEVER: 99.99990% of people will:
Loose a job, deal with illness/injury, loss of a loved one, etc.... Which may not impact anyone else, but can have serious (including financial) impact upon their lifestyle and perhaps livelihood.
I'm not denigrating your problems because I realize that you can make all the plans in the world, but then fate throws you a curve ball, and all your plans go down the toilet. People who have been through disasters, are generally careful going forward, but living entails taking some risks. Should you decide not to get married because a significant percentage of marriages end in divorce? Should you decide not have children because some children are born with birth defects?
Should you decide not to buy a house using a mortgage just because some people lost their jobs in the recent past? Most Americans, unless they already have a paid for house, and are down-sizing, can not afford to pay cash for house. Even if they could, is it necessarily the best place to put $150-200k? If you decide to rent, maybe your rent's cheaper than your house payment plus taxes plus insurance ... and may it's not.
Ncole1 likes to use hypothetical scenarios to "prove" he's right. Well, not everybody fits the hypothetical conditions just as most people aren't anywhere near "average".
I'm not denigrating your problems because I realize that you can make all the plans in the world, but then fate throws you a curve ball, and all your plans go down the toilet. People who have been through disasters, are generally careful going forward, but living entails taking some risks. Should you decide not to get married because a significant percentage of marriages end in divorce? Should you decide not have children because some children are born with birth defects?
Should you decide not to buy a house using a mortgage just because some people lost their jobs in the recent past? Most Americans, unless they already have a paid for house, and are down-sizing, can not afford to pay cash for house. Even if they could, is it necessarily the best place to put $150-200k? If you decide to rent, maybe your rent's cheaper than your house payment plus taxes plus insurance ... and may it's not.
Ncole1 likes to use hypothetical scenarios to "prove" he's right. Well, not everybody fits the hypothetical conditions just as most people aren't anywhere near "average".
Well there is no perfect financial advice. I do what works best for me and puts my family at the lowest amount of risk if I kick the bucket they are set. I don't like debt but it doesn't mean that I can't take on debt. Or that I don't use debt. Plenty of scenarios I've described where I used debt temporarily to my advantage. I didn't like debt before I heard of Dave Ramsey. As far as Daves advice some is not bad advice if you need a starting point.
I agree you can't live in fear of every scenario of what if. But there are a lot of scenarios that you can't go in with wild abandon either.
You and Dave Ramsey can live your lives in fear, but not me. There's no sure bets about anything, except that once you're born, you'll eventually die.
Too black and white. There are big risks, and there are small risks. My point here is that the risk is non-negligible (e.g. 10%), not just that it exists in the same manner as the risk of a global nuclear war starting next month.
Quote:
Originally Posted by Linda_d
If you fear debt, then you'll doom yourself to crappy jobs because you won't be able to afford to go to college or trade school unless your parents are so well heeled that they can afford to pay the full freight for it. Most Americans can't do that.
This is a lie. The reason parents have trouble paying for it is that they refuse to make the lifestyle sacrifices needed to do it. The income that the EFC formula assumes for living costs can easily be lived on if you are reasonable about housing and cars. The problem is that a lot of people are not. Thus they have inflated living costs.
Quote:
Originally Posted by Linda_d
If you fear debt. then you'll probably never own a viable small business because using credit is necessary for almost all operations.
Then explain how Dave Ramsey operates his own business?
Quote:
Originally Posted by Linda_d
If you're forced to work crappy jobs because of a lack of a degree or job skills, how are you going to manage to save for retirement?
The same way I always do - spend less than I make. It's not hard.
This is a lie. The reason parents have trouble paying for it is that they refuse to make the lifestyle sacrifices needed to do it. The income that the EFC formula assumes for living costs can easily be lived on if you are reasonable about housing and cars. The problem is that a lot of people are not. Thus they have inflated living costs.
That's completely untrue.
03-21-2015, 11:01 AM
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n/a posts
Quote:
Originally Posted by freemkt
It is hard on a poverty level income to spend less than you make; I'm confident most Americans could not do it.
Right, but at some point those people would move up and make more money.
You never move up because you won't put in the effort. You simply want to be given what other people put in years of hard work to obtain.
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