How can so many people be in debt.

[PrinceofWands]

Originally posted by: MySoS
The funeral post made me think about this. I find it strange how so many people are in debt. My family (parents) is low income, yet we have 0 debt. We are able to buy new cars, and make home improvements up front in cash. So I don't see how if my parents who are poor can afford to do things like paying for a 25,000 car up front, and buy a new $15,000 roof up front with in a years time. Why do middle class families have to take out loans and such. Why are so many middle class families in debt. What are they spending their money on. I think the problem is people spend more then they have. That is why I think the idea of a morgage on a house, or a loan is stupid one. Just paying for everthing up front. That way you won't be in any debt.

I agree 100%. My father never earned 40k a year but supported a family of 6, helped put 4 kids thru college, we always had great stuff, lotsa gifts, ok cars, etc. I've never made 30k a year, but i have zero debt as well and live quite comfortably...hell I have 8 computers at my house right now, all athlonxp or newer, if that's any indication. I did it by not getting into debt and only buying what I needed, not what I wanted (like no name brand clothes, watching for specials, not having any addictions, etc).

oh, and a MAJOR point is not trying to live someone artificially inflated, like a major city or anything.

 

[Darien]

School costs a lot. That's all the debt I have. Beyond that I'm fine.

 

[Anonemous]

some people are just down on their luck. I was debt free until this week, now I'm going to be 10k in debt.

 

[jagec]

Originally posted by: MySoS
Gross income is only 62,000 not 73,000 you can't just combine their incomes like that. Second 62,000 is middle class.

for the last time, income is only a small factor in determining class. In fact, the highest-class people have an income of zero

Originally posted by: randal
OMFG you are in college !? WOW that's $73,000. Holy sh|t, this thread gets more and more incredible! Do you have to eat crap every morning to keep up the quota or something?

Wow. Just wow.

naw, probably just paint chips...or as I like to call them, "Wall candy".

 

[dafatha00]

Every time that MySOS posts fvcking pisses me off

 

[CTrain]

Originally posted by: notfred
You are poor the same way my Vietnamese friend Tai is poor. He grew up in a family where they bought clothes at goodwill, they didn't buy him a car when he turned 16, etc. His parents both worked in a convienience store (which they owned, but leaving out details is a perfectly acceptable practice in this thread, apparently). Tai recently graduated from college with a degree in finance. His parents are planning to retire soon. Tai, being a helpful son, looked over thier finances: They have over $1,000,000 in assets. They are not poor, they're jsut cheap Asian people, like your family.

You guys should just stop flaming the guy and read the quoted post above.
Notfred summed it up perfect for most Asian families out there.
Thats where hes coming from. He just doesn't realized that his family is not POOR but extremely frugal.
Probably the way he was brought up, he thought he was POOR, but he doesn't realize that his parent are frugal as hell and know how to save money.

I'm Vietnamese and I was brought up the same way.
We had nothing when we came here.
Both parents work menial jobs just to support us.
We all wore hand-me-down and ours cars were always P.O.S.
If you had asked me while I was in HS, I would say we were poor too.

But you know what those Asian parents know how to save money.
My Dad finally landed a great job but that was cut short when he had a stroke.
My brother took over their FINANCE and I was shocked when I found found they were worth $700K ++
I was like WTF, how in the world did they have that much money......I thought we were poor when we were growing up.

So had you asked me before I found out their worth, I would say we were poor growing up too but damm, my parents were just frugal and know how to save money.

So cut the guy some slack.
MySos F.Y.I. your parents is not poor man, they are just extremely frugal like most other Asian parents out there.
They just made it look like you're poor growing up because they were so frugal.

 

[jagec]

Originally posted by: CTrain
But you know what those Asian parents know how to save money.
My Dad finally landed a great job but that was cut short when he had a stroke.
My brother took over their FINANCE and I was shocked when I found found they were worth $700K ++
I was like WTF, how in the world did they have that much money......I thought we were poor when we were growing up.

here's my question...how was that money invested?

 

[Doggiedog]

Originally posted by: CTrain

Originally posted by: notfred
You are poor the same way my Vietnamese friend Tai is poor. He grew up in a family where they bought clothes at goodwill, they didn't buy him a car when he turned 16, etc. His parents both worked in a convienience store (which they owned, but leaving out details is a perfectly acceptable practice in this thread, apparently). Tai recently graduated from college with a degree in finance. His parents are planning to retire soon. Tai, being a helpful son, looked over thier finances: They have over $1,000,000 in assets. They are not poor, they're jsut cheap Asian people, like your family.

You guys should just stop flaming the guy and read the quoted post above.
Notfred summed it up perfect for most Asian families out there.
Thats where hes coming from. He just doesn't realized that his family is not POOR but extremely frugal.
Probably the way he was brought up, he thought he was POOR, but he doesn't realize that his parent are frugal as hell and know how to save money.

I'm Vietnamese and I was brought up the same way.
We had nothing when we came here.
Both parents work menial jobs just to support us.
We all wore hand-me-down and ours cars were always P.O.S.
If you had asked me while I was in HS, I would say we were poor too.

But you know what those Asian parents know how to save money.
My Dad finally landed a great job but that was cut short when he had a stroke.
My brother took over their FINANCE and I was shocked when I found found they were worth $700K ++
I was like WTF, how in the world did they have that much money......I thought we were poor when we were growing up.

So had you asked me before I found out their worth, I would say we were poor growing up too but damm, my parents were just frugal and know how to save money.

So cut the guy some slack.
MySos F.Y.I. your parents is not poor man, they are just extremely frugal like most other Asian parents out there.
They just made it look like you're poor growing up because they were so frugal.

We would cut him some slack if he would STFU and stop lecturing us when he doesn't know jack sh!t. Seriously, the dude is out of touch with reality questioning what other people are doing in their lives. Before doing that, he should question what's going with him and his family because obviously he doesn't know.

 

[lobadobadingdong]

because medical expenses are absurd. most of my debt is from medical expenses.

 

[vood0g]

mysos, next time pull yourself away from your mother's tit before you come here and post. oh yea, and one more thing, DIAF.

 

[DBL]

Originally posted by: SCSIfreek
I just read thru most of the crap wrote by MYSOS. If your parents brings in 62K net income from a 73K gross income, you're basically cheating on the government. Federal Tax alone should be at least 25% of the gross income , not to mention about DIS, SSN and state tax.

I honestly think you should re-write this thread or just sum up all this sh!t up with one sentence.

"My parents knows how to save their money" or better yet "My parents put false information on their tax return so we could afford 4 cars, a new roof and pay everything with cash $$$$"

Just to let MySOS know, your parents ain't poor but they sure did rised a stupid kid.

It's my understanding that he is stating that they are declaring a 62k net income, meaning they will pay taxes on 62K rather than 73K. IOW, they have deductions totaling 11K. Assuming a 25% tax bracket, they would then be paying 21.2% of their gross in federal taxes. For a family w/ dependants, that's pretty high.

I'm single and last year I paid something like 7% of my gross in federal taxes. Of course, I live in NYC with relatively high local and city taxes, which you are allowed to deduct from your federal. In addition, I have a pretty high mortgage (in relation to my income), so that enables another nice deduction.

And as far as mortgages being bad debt, look at this table which details my % gains in Net Worth for the past 7 years.

1999 -
2000 92.37%
2001 2.59%
2002 75.85%
2003 -1.43%
2004 140.27%
2005 8.4%

Can you guess when I closed on my condo? At the moment, I'm still reluctant to factor in its appreciation for 2005, which is something like 14% for NYC. Regardless, I can say w/o a doubt that I am infinitely better off having taken on mortgage debt.

 

[crystal]

I don't know. He said his parent got him a car. That's mean he could drive, but the way he wrote/speak is like a 10-12 year old. How old in cali. before you can drive? 16? Could anybody be this naive at that age?

 

[maziwanka]

Originally posted by: DrPizza
Also, allow me to introduce myself, since you're relatively new to the forums: Apparently my nic conceals that I graduated summa cum laude in applied mathematics (ranked #1 in my class as of my junior year), have 3 1/2 years of engineering courses on top of that, am working on a master's in physics concurrently with a masters in technology in education, and am considering the PhD in mathematics education when I'm done with those - but 2 weeks into this semester, I'm rethinking that I may want to relax. (plus I have a bunch of other grad work that isn't going toward anything).... I'm a math and physics teacher, as well as an adjunct college professor teaching calculus. I know a little bit about interest, and, as a matter of fact, just finished a mini-unit on the subject in pre-calculus (since it lends itself so well to exponential and logarithmic problems, plus will apply to most of their lives more than many of the other topics I cover)

holy crap. we are quite similar. i also graduated summa cum laude with a degree in applied mathematics. i was considering pursuing a phd in applied mathematics but instead decided to attend law school. im waiting to hear back now.

 

[Tifababy]

My fiance's mom always says how poor they are, yet their house is worth over $500k (they paid half of that 12 years ago). Just got the interior and exterior of their house repainted, bought a new mini-van, all new furniture from pottery barn, a new $5000 plasma tv, and are now recarpeting their entire house. Oh yeah, and they have a $20k bill coming for our wedding this summer. Yet she still complains about how poor they are...guess what, she's asian.

I think you're stupid for paying for a house in cash. Even if I won the lottery, I doubt I'd pay off my house. My interest rate is around 6%, take off around 2% for inflation and I'm paying about 4% on the house. I can also deduct all the interest from my income when I do my taxes. So it's actually less than 4% that I'm losing. And all my mutual funds and 401k have gone up by more than 10% in the last year, so I'd much rather put my money into stocks and bonds than a house (which is appreciating at more than 10%).

House debt = good
car or credit card debt = bad (usually)

 

[spasticnationboy]

I am not poor, just perpetually Broke, which is funny, since I pretty much do everything I want to, but bitch about not having much money and working two jobs, sometimes three, just to pay for whatever needs paid for........

Right now I need to maintain my truck, get a few things fixed, and I'm talking tune up, lube jobs, fix the brakes all the way around including a few hundred for the big Iron pieces the brake pads fit onto that the last guy screwed up before I bought it used for 6 grand.... and I'm talking about $800 to a grand just for that basic kind of stuff, not to mention new tires sometime this year, that's another three to four hundred...... add that on top of mortgage, car payment, health insurance, kids braces, and food and gas, and there's just not that much left over for much else.... and I make what's considered a good living at at good job, but since I was behind the income curve and had a family to support with a psycho, spend thrift EX, I racked up about 20G's in CC debt over my 20's which I'm stuck with now at over $400 a month in Miinumums......I'll be stuck with it for the next ten years........That's what hamstrings us........ I think a lot of it has to do with parents not warning thier kids about the consequences, or schools teaching the nut's and bolts of debt........I had no clue... should have known better for sure.................. that and I'm sure there are those out there being scammed by unscrupulous Finance companies......
Even if we won't vote for him, we should probably all listen a bit more closely to Ralph Nader.....
Selah

 

[richardycc]

Originally posted by: MySoS
The funeral post made me think about this. I find it strange how so many people are in debt. My family (parents) is low income, yet we have 0 debt. We are able to buy new cars, and make home improvements up front in cash. So I don't see how if my parents who are poor can afford to do things like paying for a 25,000 car up front, and buy a new $15,000 roof up front with in a years time. Why do middle class families have to take out loans and such. Why are so many middle class families in debt. What are they spending their money on. I think the problem is people spend more then they have. That is why I think the idea of a morgage on a house, or a loan is stupid one. Just paying for everthing up front. That way you won't be in any debt.

your parents are probably in debt of some sort, you just dont know about it.

 

[kalster]

people just want to have the latest/great , whether it makes financial sense or not

i find it fascinating, when i was in school, (at USC, a very expensive private school), i was a T.A for a semester, i used to meet lot of students who were juniors in the class i was the T.A for, i was friends with few of them, most of them had big time student loans to pay for school, they still had all the latest toys (pda's, laptops, ipods ) , how can someone in their right mind buy something that expensive when they have close to 70-80k in debt, living life king size is 1 thing but thinking about the future is extremely important as well

 

[i3rYs0n]

it todays world, to live a normal financially stable life (usually) you have to be in debt. Most people take loans out, not because they can't afford to pay in lump sums from savings, but because it is just easier. It may cost more in the long run, but having a loan forces you to budget, and should allow you to keep more money at the moment (rather than having to save up for something you want to buy). My parents have plenty of money, but when they built their new house they opted for the 30 year loan. This way they have an extra 500 or so dollars every time a payment is due. They have already figured out that they will end up paying for the house around 250% of what it was built at. The economy depends on people being in debt, because it will be almost garrenteed that money will continously be circulated.

 

[CTrain]

Originally posted by: jagec

Originally posted by: CTrain
But you know what those Asian parents know how to save money.
My Dad finally landed a great job but that was cut short when he had a stroke.
My brother took over their FINANCE and I was shocked when I found found they were worth $700K ++
I was like WTF, how in the world did they have that much money......I thought we were poor when we were growing up.

here's my question...how was that money invested?

It was a period when my dad got his insurance license and got a job at MetLife cause he knew someone.
He made a niche selling Life Insurance to all the Vietnamese out there.
I guess he made quite a bit of money and invested real well.
My Mom has had the same menial job for 20+ yrs.

 

[cavemanmoron]

your parents paid cash for a car??


They must make a Lot more money than I do,

I live alone,and pay a mortgage,because I don't live at home,with Mom and Dad.

I only have My income,not,2 or more peoples to spend.

 

[Blazin Trav]

This is America. We like buying stuff.

 

[PrinceofWands]

Originally posted by: cavemanmoron
your parents paid cash for a car??


They must make a Lot more money than I do,

I live alone,and pay a mortgage,because I don't live at home,with Mom and Dad.

I only have My income,not,2 or more peoples to spend.

It's no problem to pay cash for a car, as long as you don't go for a 30,000 car. There are plenty of option to pay 10-15k and get a reliable car for the next 10 years. I've never made 30k in a year, and even I saved up 10 to pay cash for mine.

 

[Ender17]

Originally posted by: SampSon
Troll troll troll your boat, gently through the forums...

qft

 

[yoda291]

ok, just so the OP is clear on this.

Debt is not necessarily bad. Using the glaringly obvious example, if bank A is offering me 5% interest annually for a savings acct and bank B is offering me a loan at 2% interest for a million bux I would assume the debt that Bank B gives me (I have assumed some debt), and I place it in Bank A. So now, despite the fact that I may have just acquired over a million dollars in debt, at the end of everything, I will be adding $30.000+ gross to my income without doing a darned thing ->compound interest.

Obviously, situations like this rarely happen EXCEPT in terms of real estate. Ergo, there are often times when it might be more beneficial to acquire debt in order to purchase a home EVEN IF you have the cash to front the whole thing.

so the problem is not debt. It's lack of debt management skills.

 

[stnicralisk]

Originally posted by: MySoS
My family (parents) is low income, yet we have 0 debt. So I don't see how if my parents who are poor can afford to do things like paying for a 25,000 car up front, and buy a new $15,000 roof up front with in a years time.

What exactly is your definition of low income because a low income family CANNOT save 15k in a years time.. your family is middle class my friend.