Debt.

[sickmint79]

i would not try and pay off debt faster than you need to at this point, not if it's borrowed to you cheaply, ie. like i assume those student loans may be. i'm carrying 45k debt on my HELOC now on purpose because i think what i'm doing with the money will come out ahead of the 4.5% i'm borrowing it at. i wouldn't make extra payments on something like that, or low interest student loans/car payments.

 

[James]

The rule that card companies follow to determine your risk is if you break the 30% of available credit threshold.

For example: If you have a $10,000 limit combined on all your cards. If you carry less than $3,000 from month to month you're fine. But once you start going over that your credit score will be adversely affected.
Carrying 50% therefore as a rule of thumb is a no no.
You could totally max out a $2,000 limit card....and carry a $1,000 balance on another card with a limit of $8,000...and you'd still be under the radar of card companies.

 

[Angus]

I don't get their logic at all. I'd have to actually hear that from someone that works at a credit agency. I had heard that you don't want your balance to approach the 50% limit marker.

They like it when they make money off you and when they can do so without any hassels, like missed/late payments or too much out... I got my information from my finance professor 3 semesters ago, maybe you had her at UIC too? Ms. Brown. lol

half that class was her warning us about credit reports and she actually made the entire class get their free annual credit report and had to turn in evidence that we actually got it. haha

 

[sickmint79]

you shouldn't carry anything month to month on a credit card anyway unless you have 0%.

 

[02BlueGT]

The rule that card companies follow to determine your risk is if you break the 30% of available credit threshold.

For example: If you have a $10,000 limit combined on all your cards. If you carry less than $3,000 from month to month you're fine. But once you start going over that your credit score will be adversely affected.
Carrying 50% therefore as a rule of thumb is a no no.
You could totally max out a $2,000 limit card....and carry a $1,000 balance on another card with a limit of $8,000...and you'd still be under the radar of card companies.

Yep, thats why I only use one at a time, then pay it off over a few months.....
Built up enough credit that I just bought a townouse, with a very low interest rate, and lots of stuff for it, and like sickmint97 said, if you pay off the lower interest stuff later it may end up saving you money. not actual dollar amount, but value wise(as long as inflation keeps at this rate, or increases).....

 

[sickmint79]

i like the idea of taking out a HELOC and putting that money into a high yield checking account and a lot of precious metals. of course, most people would say this is crazy. but if there is bad inflation, this strategy will be FTW

has been a solid win actually since 2001. but who knows what is going to go on now!

 

[02BlueGT]

i like the idea of taking out a HELOC and putting that money into a high yield checking account and a lot of precious metals. of course, most people would say this is crazy. but if there is bad inflation, this strategy will be FTW

has been a solid win actually since 2001. but who knows what is going to go on now!

Thats the problem I have with anything like that, the market is very volatile now, and even the smartest economists aren't sure how this is going to play out..... then again higher risk usualy pays off better, so good luck

 

[sickmint79]

even guys who like that idea acknowledge it is laden with risk. and smartest economists is debateable since those supposed guys didn't see this thing staring them in the face for the most part. at least the guys generally accepted as the smartest guys in the room.

note that the above play is not directly related to the (stock) market at all, it is more directly related to political and monetary policy of the country/world. the world has a lot of bad debts now, and this debt needs to go away so we can have real sustainable economic growth again. the only way you can do that is through
1. defaulting on debt (bankruptcy - no bailouts)
2. forgiveness of debt (borrower and creditor ajust the PREMIUM, not interest rate)
3. paying the debt back - if you happen to be able to print money, you can just do that. each dollar is worth less, but you can pay them all back!

i believe the 3rd will be occurring in a big way for the US

 

[02BlueGT]

even guys who like that idea acknowledge it is laden with risk. and smartest economists is debateable since those supposed guys didn't see this thing staring them in the face for the most part. at least the guys generally accepted as the smartest guys in the room.

note that the above play is not directly related to the (stock) market at all, it is more directly related to political and monetary policy of the country/world. the world has a lot of bad debts now, and this debt needs to go away so we can have real sustainable economic growth again. the only way you can do that is through
1. defaulting on debt (bankruptcy - no bailouts)
2. forgiveness of debt (borrower and creditor ajust the PREMIUM, not interest rate)
3. paying the debt back - if you happen to be able to print money, you can just do that. each dollar is worth less, but you can pay them all back!

i believe the 3rd will be occurring in a big way for the US

I hope 3 doesn't happen.....I have a feeling #2 is going to happen, probably not by choice
(as in govt. mandated)....

 

[sickmint79]

it will happen for some, but only by force. china certainly isn't going to forgive us any of the debt we owe them. that one would apply for banks and homeowners/homedebtors though. probably only when the gov puts in a plan to force them to do so. personally i subscribe to #1 because it doesn't reward/forgive stupidity, but in practical terms i could find #2 acceptable.

3 is just going to happen period. we rely on debt so much here that other countries simply not buying as much of ours is going to lead to inflation as we do some accounting juggling and buy our own.

 

[02BlueGT]

it will happen for some, but only by force. china certainly isn't going to forgive us any of the debt we owe them. that one would apply for banks and homeowners/homedebtors though. probably only when the gov puts in a plan to force them to do so. personally i subscribe to #1 because it doesn't reward/forgive stupidity, but in practical terms i could find #2 acceptable.

3 is just going to happen period. we rely on debt so much here that other countries simply not buying as much of ours is going to lead to inflation as we do some accounting juggling and buy our own.

A mix of all three seems the most likely over all by the time it is back to a growth period

 

[sickmint79]

yes, certainly. financial industry has a bunch of lobbyists and control in political circles so that's part of why they get bailouts and others do not. also the belief by some that the entire financial system would collapse if they aren't bailed out (debateable) - personally i think the system is fucked up and should be replaced, although doing so in a major shock might be pretty bad. i think ron paul had a really brilliant idea to do this though.

 

[02BlueGT]

yes, certainly. financial industry has a bunch of lobbyists and control in political circles so that's part of why they get bailouts and others do not. also the belief by some that the entire financial system would collapse if they aren't bailed out (debateable) - personally i think the system is fucked up and should be replaced, although doing so in a major shock might be pretty bad. i think ron paul had a really brilliant idea to do this though.

I am not economist, or financial expert, but I have believed for a long time that the system is way too complicated and there are way to many hands in the pot, I mean shit, I got my mortgage officially on May 8th, yesterday I recieved a letter stating that my loan had been sold to a different bank(this is the second time it's been sold in under a month). If a bank was going out of business I could understand, but these things would be given out much more carefully if the original bank had to own it untill it was paid off, that way you would be sure to only give it to someone that would pay it off

 

[Smoke]

The problem-and its not rocket science-is that the majority of people as a nation owe too much money on too little income.

The catch 22 is that debt doesn't go away unless its forgiven,or paid.Option 2 aint gonna happen short term since paying off debt takes time,during which that person won't be 'splurging'.
I'm a good example,since instead of buying another car,or travelling more ,I'm saving to deal with debt,so those are all sales lost because I'm paying back owed amounts.

Problem is,the banks won't forgive debt,since that's how they make money.If they erased mortagage debt,those with burdensome car loans would ask forgiveness too,and so on.Pretty soon there's no bank anymore.

So its up to government to make up the difference,except the government is in worse debt than everyone else.

And every other developed and 3rd world nation owes money to each other.We owe to China,china owes Japan,Japan owes us,we owe Germany,Germany owes Italy,Italy owes Taiwan,etc.

There really is too much friggin debt.I'd like to loose my share of this fubared cycle,lol.

 

[PANDA]

How do you buy things online or build credit? I don't carry a balance ever but i can't imagine not having a credit card. Having to carry around change sucks.

Debt card. Any credit I have is from paying bills, gas, etc. Id rather have a average credit score and a huge savings than a perfect credit score and lots of shit to pay off. That's just me, I don't buy shit with money I don't have.

 

[skeezer]

It's not all about score polski, you need history too.

5 years ago I was making over 60k a year with hardly no credit going on. I tried to buy a $11,000 used car and couldn't without a co signer because I didn't have enough credit history. That was a joke. It takes years to build it up. Have fun trying to buy a house anytime soon. Living at home til you're 35 should be awesome. Or you could rent for 5 years and go against your own words by throwing your money away on nothing, just like credit card interest.

 

[sickmint79]

The problem-and its not rocket science-is that the majority of people as a nation owe too much money on too little income.

The catch 22 is that debt doesn't go away unless its forgiven,or paid.Option 2 aint gonna happen short term since paying off debt takes time,during which that person won't be 'splurging'.
I'm a good example,since instead of buying another car,or travelling more ,I'm saving to deal with debt,so those are all sales lost because I'm paying back owed amounts.

Problem is,the banks won't forgive debt,since that's how they make money.If they erased mortagage debt,those with burdensome car loans would ask forgiveness too,and so on.Pretty soon there's no bank anymore.

So its up to government to make up the difference,except the government is in worse debt than everyone else.

And every other developed and 3rd world nation owes money to each other.We owe to China,china owes Japan,Japan owes us,we owe Germany,Germany owes Italy,Italy owes Taiwan,etc.

There really is too much friggin debt.I'd like to loose my share of this fubared cycle,lol.

why would it be up to the government though? the government has no money other than what it takes from its citizens. if private bank and private citizen get into some sticky debt situation, why should government, or me, as a 3rd party make someone whole with my own money? the market has a solution for this if you let it happen - the 2 parties negotiate to resolve their issue, or one of them fails/defaults.

it is a problem that we have too much debt and too little income, but i don't think that's where the problem originates - i think that situation is a result of something else, and if you dig deeper you find the real root cause. and IMO it's that instead of the amount of money/credit being controlled by a free market, it's controlled by men at the federal reserve who we think our smart enough to gently control and direct the economy. instead of an invisible hand, we have replaced it with a benevolent hand of government intervention. as good as its intentions may be though, it is clumsy and things like this have and will continue to happen.

 

[sickmint79]

It's not all about score polski, you need history too.

5 years ago I was making over 60k a year with hardly no credit going on. I tried to buy a $11,000 used car and couldn't without a co signer because I didn't have enough credit history. That was a joke. It takes years to build it up. Have fun trying to buy a house anytime soon. Living at home til you're 35 should be awesome. Or you could rent for 5 years and go against your own words by throwing your money away on nothing, just like credit card interest.

i used to think renting was a total waste of money but i'm not convinced of that anymore at all. i definitely think there are times now where it makes sense. living at home sure is better for the pocket tho !

 

[skeezer]

in certain situations, short term, it may make sense.

for mr money bags panda over here, his mom will be washing his tighty whities for quite some time to come.

 

[Eagle]

@ panda's tighty whities

 

[Eagle]

I personally think that living @ home is a joke, unless you're there out of necessity. I've seen folks live @ home for YEARS making big bank and spending it all off on booz and shit they didn't need. Sure its fun dropping $1k @ the bar with your buddies, but damn.

If you're @ home saving up cash to buy a reasonable home, then you're doing it for the right reasons. If you're just staying @ home cuz its easy and lets you spend like a retard, grow a set and get into the real world on your own.

 

[blakbearddelite]

I got my information from my finance professor 3 semesters ago, maybe you had her at UIC too? Ms. Brown. lol

I did have Ms Brown for Managerial Accounting. She once called out Greasy for sleeping in class or something.

Debt card. Any credit I have is from paying bills, gas, etc. Id rather have a average credit score and a huge savings than a perfect credit score and lots of shit to pay off. That's just me, I don't buy shit with money I don't have.

But I don't see where you're out any money buy putting stuff on a credit card and then paying the balance off each month? Where are you getting these huge savings by not using a credit card?

 

[Eagle]

Using a revolving credit card as well... just like what it sounds like and PAYING IT OFF every month really won't get you great credit. You need to hold ~50% balances on them to get the biggest bang for your debt... er buck... on your FICO score. $0 bal on a $10k card = risk. One day you might snap and buy a blower for your BMW, never know.

 

[Mook]

I personally think that living @ home is a joke, unless you're there out of necessity. I've seen folks live @ home for YEARS making big bank and spending it all off on booz and shit they didn't need. Sure its fun dropping $1k @ the bar with your buddies, but damn.

If you're @ home saving up cash to buy a reasonable home, then you're doing it for the right reasons. If you're just staying @ home cuz its easy and lets you spend like a retard, grow a set and get into the real world on your own.

when i was younger i was living at home and spending like an idiot. the past 2 years have been spent paying off my idiot ways. i should be credit debt free by the fall and with any luck, in a position to at least rent my own place by the 1st of the year. ive made a lot of mistakes when its come to credit and saving money and ive paid for it. but now i'm back on track.

and yes i realize i still piss away money switching cars but theres a reason ive had the Z for over a year now. ive finally learned well, more or less

 

[skeezer]

or a broke ass MR2 with a blow up doll driver mod