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think about how much interest you saved by refinancing ,low auto loans , personal loans , credit card debt.
Americans spent 5.8% of their after-tax income paying interest on mortgages, credit cards, car loans and other debt, according to data from the Bureau of Economic Analysis.
Household interest payments fell to an average of $469 per month , down from a peak of $728 in 2007, after adjusting for inflation. That equals $3,100 a year.
Mortgage interest payments are down 30% from their 2007 peak. Interest payments on other debt, such as credit cards and car loans, are down 50%
think of how much bonds made in capital gains by those who just bought treasury bonds instead of cd's because they paid attention to the fed telling folks don't sit in cash instruments..
think about how little most folks have in long term savings to even get any interest on. very little.
those folks with a decent amount of long term assets of assets don't keep them in cash. other assets did great just because of low rates
low interest rates put far more money in most americans pockets than were given up .
any questions ?
Last edited by mathjak107; 01-22-2014 at 03:14 PM..
think about how much interest you saved by refinancing ,low auto loans , personal loans , credit card debt.
Americans spent 5.8% of their after-tax income paying interest on mortgages, credit cards, car loans and other debt, according to data from the Bureau of Economic Analysis.
Household interest payments fell to an average of $469 per month , down from a peak of $728 in 2007, after adjusting for inflation. That equals $3,100 a year.
Mortgage interest payments are down 30% from their 2007 peak. Interest payments on other debt, such as credit cards and car loans, are down 50%
think of how much bonds made in capital gains by those who just bought treasury bonds instead of cd's because they paid attention to the fed telling folks don't sit in cash instruments..
think about how little most folks have in long term savings to even get any interest on. very little.
those folks with a decent amount of long term assets of assets don't keep them in cash. other assets did great just because of low rates
low interest rates put far more money in most americans pockets than were given up .
any questions ?
Yes, what about the many posters/readers in the forum who pride themselves on being frugal, no debt and still reeling from the meltdown. Right or wrong they still have lives that have been hurt by QE and their conservatively invested savings are now hurting. There parent were children of the depression and both generations were raised valuing CD's.
cash is an asset class like anything else. no where in history has anyone not been burned by holding the wrong asset at the wrong time and that includes cash. cash has had negative real returns after inflation and taxed almost 1/2 the time and averaged only 2% real return historically.
the fed did everything but drop leaflets from helicopters warning folks this is not the time for cash instruments, at least move to treasury bonds.
the fact is most of america lives hand to mouth and money does not remain in an account long enough to get much interest. most of america can't come up with even 8 months emergency money.
those with savings usually have ira's and 401k's and are well ahead despite low cash returns.
there are really very few that have not benefited in some way from these historically low rates on mortgages and loans .
cash is an asset class like anything else. no where in history has anyone not been burned by holding the wrong asset at the wrong time and that includes cash. cash has had negative real returns after inflation and taxed almost 1/2 the time and averaged only 2% real return historically.
the fed did everything but drop leaflets from helicopters warning folks this is not the time for cash instruments, at least move to treasury bonds.
the fact is most of america lives hand to mouth and money does not remain in an account long enough to get much interest. most of america can't come up with even 8 months emergency money.
those with savings usually have ira's and 401k's and are well ahead despite low cash returns.
there are really very few that have not benefited in some way from these historically low rates on mortgages and loans .
anyone with a mortgage has benefited greatly.
Again consider the folks in the frugal and some in the not wealthy thread. This is why they have restrictive titles and don't want everyone posting.
if they had savings in cash instruments and didn't take an interest or heed the warning then it is their bad.
nothing in life works all the time or is risk free even if they would like it to be.
as they say , financial ignorance is no excuse.
the problem with many of the frugal you speak of is they subscribe to the saying a penny saved is a penny earned but they forget about the fact it will always be a penny.
it is wise investing that grows these pennies into substantial money through decades of compounding,.
many are so consumed trying to pinch pennies that they cherish every cent so much they never want to part with it to invest it and so many never grow it into much.
in fact after taxes and inflation they actually lose money in cash instruments more often than not and made the riskiest bet of all.
most of america benefited from these low rates a whole lot more than the group you are referring to. if they didn't benefit it was their own actions that caused it as they tried to hide under a rock and avoid all risk,even us treasuries..
if folks are poor and have little savings they would get no interest to speak of anyway. they saved in other ways because products they buy had prices that reflected low corporate financing expenses,.
low rates are not just us , the entire industrialized world is at all time lows. every one of those countries is at or near recession levels and has low low rates or a worthless currency and they were not part of quantitative easing.
Last edited by mathjak107; 01-22-2014 at 05:12 PM..
if they had savings in cash instruments and didn't take an interest or heed the warning then it is their bad.
nothing in life works all the time or is risk free even if they would like it to be.
as they say , financial ignorance is no excuse.
the problem with many of the frugal you speak of is they subscribe to the saying a penny saved is a penny earned but they forget about the fact it will always be a penny.
it is wise investing that grows these pennies into substantial money through decades of compounding,.
many are so consumed trying to pinch pennies that they cherish every cent so much they never want to part with it to invest it and so many never grow it into much.
in fact after taxes and inflation they actually lose money in cash instruments more often than not and made the riskiest bet of all.
most of america benefited from these low rates a whole lot more than the group you are referring to. if they didn't benefit it was their own actions that caused it as they tried to hide under a rock and avoid all risk,even us treasuries..
if folks are poor and have little savings they would get no interest to speak of anyway. they saved in other ways because products they buy had prices that reflected low corporate financing expenses,.
low rates are not just us , the entire industrialized world is at all time lows. every one of those countries is at or near recession levels and has low low rates or a worthless currency and they were not part of quantitative easing.
QE has been a godsend to those of us in countries that missed the financial crisis and had their money in RE.
Peru saw 1,000% appreciation on land in the city and 300% appreciation on condo's. Cash in local currency appreciated by better than 30% and was earning 8% in CD's with 2-3% inflation. As QE will be around for a long time, better learn to embrace it as the alternative (deflation) is not a pretty thing!
It would be nice if a guy could decide at age 25 whether or not to kick in another 3% to 5% in order to lower his FRA from 67, 68 or 69 down to 60 or 62.
That's an idea I never thought of before. Maybe something that should be considered in the SS reform discussion.
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