Hard Light Productions Forums
Off-Topic Discussion => General Discussion => Topic started by: S-99 on February 08, 2011, 09:22:05 am
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Just something i felt like finding out since the mainstay of the american population are debtors (after that i'm curious about other countries). I myself have no debt, but i also don't have that much money.
Reasons for being in debt if could be explained also would be enlightening. I imagine people in here needed to pay off some bills, school loans, etc.
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Out of work, owe my family and friends around $300 total.
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As of 2011, I've paid off my last swig of debt, I'm free!
Temporarily.
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Luckily, I'm not.
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School. Got some money in savings, since Mom's paying for my tuition. We haven't discussed a payback method, she just says I can make it up to her when I'm rich and employed and she's retired. I'm her retirement plan :P
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Are you talking day-to-day, living expenses type debt? Credit cards and ****? Or big, 'institutional' type debts? Because you know mortgages are hundreds of thousands of dollars, right? So your poll numbers probably need to be tweaked somewhat. :p
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Are you talking day-to-day, living expenses type debt? Credit cards and ****? Or big, 'institutional' type debts? Because you know mortgages are hundreds of thousands of dollars, right? So your poll numbers probably need to be tweaked somewhat. :p
This.
I've still got about $90,000 owed on my mortgage. If push came to shove, we could probably pay that off, but it would completely deplete our liquid assets and would require one or both of us to dip into our retirement funds. For the time being, bad idea.
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im over 10000 in debt and dont plan on paying one dead cent of it back. il see it go to zero when the world gets nuked. should teach em for giving credit to sociopaths.
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ATM $200, but this is the first time in a long time and that's just because I splurged on some stuff.
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Paid off my uni debt, currently in the process of saving - what for, depends on a few things, but yea.
No debt here.
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I'd like to know how so many here are not in debt.
Still paying ~$5,000 on car loan. And I'm hesitant to go to a 4 year college because I don't want to spend the next 15 years paying it off.
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I'd like to know how so many here are not in debt.
Still paying ~$5,000 on car loan. And I'm hesitant to go to a 4 year college because I don't want to spend the next 15 years paying it off.
Many schools will give you a free ride if you're not in a great situation financially. Do your FAFSA, get in somewhere decent.
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Canadian university debt... it's a pain in the ass and only getting bigger.
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parents paid for school. although if i had gotten loans instead, my employer would have paid them off in full after 6 months of work. that would have been nice to know 5 years ago.
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The median consumer debt in the United States is $30,000.
Looks like this forum has a pretty financially responsible bunch.
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And/or a bunch who is jobless and flat broke, so we don't have the means to go into debt in the first place, like myself. :p
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I'm a college student, but I'm $0 in debt. Thank you gubment!
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none, until i run out of college savings and continue to fail to win lottery scholarships.
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Made it through 4 years of uni on a scholarship, incurred a few Ks of debt from my Dad while finishing Grad school. "Inherited" another 15k of my wife's student loans. All payed off as of the beginning of this year, though, which feels great! Time to start saving for a house...
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And/or a bunch who is jobless and flat broke, so we don't have the means to go into debt in the first place, like myself. :p
i hate to break it to you but this has rarely stopped anyone
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Around 40 k€ at the moment. This is because I bought a house. No problems with the repayments, though.
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Oh, how I WISH my mortgage was a mere $90,000. Hell, I'd settle for even a mere triple that.
If you don't include the mortgage or a 0% financed car that I could/would pay off tomorrow if the dealer hadn't allowed me to pay off the balance over five years with no interest instead (Even with savings interest rates at less than 2%, it's still worth it to NOT pay it off any faster), the wife and I owe a whopping.... $0. (But I still stuck myself in the $5000+ category).
We worked hard to pay off our near combined $45,000 in student loans and haven't borrowed money for anything other than our home.... and as single-detached homes here run from $300,000 (for a < 1000 square foot shack built in the 1950s and unrenovated) to an average around $400,000 for a < 2000 square foot newish home on a decent-sized lot, I don't feel too bad about that ;)
You Americans can be grateful for the fact that fully-financed post-secondary exists there - I had top grades and still paid for the majority of my education with a combination of student loans and summer jobs.
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You can get a house in Denver for around $100,000 if you're willing to go crappy enough.
Personally I'd rather get an apartment unless I decide to have more than 2 kids
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$0. Possibly subject to change at the start of next semester. Still, two semesters on no loans at all is pretty good, considering I started with > $2000 a year ago.
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Owed about $2,000 to my parents for the car I bought from them in 2009. Then, in 2010, I owed about $2,000 to Ford for the Focus I bought from them to replace the one a Charger totalled. (The rest of that car's price was covered by the insurance check. Full coverage, FTW.) Now, I'm debt-free, and intend not to owe money to anyone again.
Right now, I make $1,300 per month, after taxes, and spend about $800 - $900. If I find myself making $13,000 per month, I'll probably still endeavor to live on about $800 - $900 each month, so that I don't need to worry about a mortage or car loan in the future. Save, save, save. Good things come to those who wait (and save). Save early; save continuously. Et cetera.
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Let's see....car...credit cards...Air Force...
Yep, right around $16,000. Unemployed. FML.
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As an interesting aside to your curiosity concerning American debt: how exactly is debt viewed in other countries? (I'm from the US). Where I'm from, personal finances are hardly ever discussed. If they are between friends, etc. hard numbers NEVER come into play. It's considered incredibly rude (nearly taboo) to ask anybody about their personal finances out of the blue.
Please please please don't think I'm trying to shut up your topic by being all "this is rude where I'm from! wut!". That's not my intention at all. You were curious about American debt, and I'm actually curious about how "taboo" financial discussions are in other countries. It might be an interesting correlation to find out that Americans are highly in debt AND don't like to talk about it (if this turns out to be the case).
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And/or a bunch who is jobless and flat broke, so we don't have the means to go into debt in the first place, like myself. :p
You'd be surprised at poor people's sense of self entitlement. With this i mean dumb poor people. A lot of people also don't know how to save up money so they can afford what they want.
And/or a bunch who is jobless and flat broke, so we don't have the means to go into debt in the first place, like myself. :p
It's not too hard to be broke and go into debt. One such easy way is to injure yourself and simply have one ambulance ride if you are uninsured. Another is signing up for credit cards.
The median consumer debt in the United States is $30,000.
Looks like this forum has a pretty financially responsible bunch.
Yeeesh, that's high for american consumer debt. I share your same thoughts about this forum community being a financially responsible bunch. This forum can pride itself with not being haven to dummies (we are all a very smart bunch). I was never in debt aside from 9 years ago needing to pay for 2 video games i rented and lost. If i couldn't afford something, i'd see if i could find it for free, save up, or consider how much i really want/need what was to be purchased.
As an interesting aside to your curiosity concerning American debt: how exactly is debt viewed in other countries? (I'm from the US). Where I'm from, personal finances are hardly ever discussed. If they are between friends, etc. hard numbers NEVER come into play. It's considered incredibly rude (nearly taboo) to ask anybody about their personal finances out of the blue.
I'd like to know about how things are handled in other countries as well. Personal finances where i live are discussed all the time. We interior alaskans usually do it as a form of small talk because staying alive in winter is expensive and all of us up here tend to familiarize with one another. Personal finances as far as what is usually discussed is what people buy, how much that thing they bought was, and possibly how much that person makes in a month. How much money someone actually does have is however taboo. This is of course for america. So i didn't really answer too much except how americans discuss finances in a desert winter climate.
Please please please don't think I'm trying to shut up your topic by being all "this is rude where I'm from! wut!". That's not my intention at all. You were curious about American debt, and I'm actually curious about how "taboo" financial discussions are in other countries. It might be an interesting correlation to find out that Americans are highly in debt AND don't like to talk about it (if this turns out to be the case).
I don't think you're being rude. It fits here. I guess we wait until somebody from another country chimes in on this.
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I guess we wait until somebody from another country chimes in on this.
It's not something that's discussed outside of close friends or colleagues, and numbers rarely enter the conversation.
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Looks like I was a little off.
http://blogs.forbes.com/moneybuilder/2010/06/24/one-big-difference-between-chinese-and-american-households-debt/
The average annual household income in China, converted to dollars, was $10,220, compared with $84,300 in the United States (the median US income is $47,300.)
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The average US household debt is 136% of household income, compared to 17% for the Chinese.
1.36 * 84300 = $114648 average US household debt.
On top of that is $8000 on average of credit card debt alone.
http://moneycentral.msn.com/content/savinganddebt/p70581.asp
So yeah, no wonder why consumer demand is so low and unemployment is so high. The US economy is ****ed. Blame the government, not the people who gave credit cards to morons.
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oh wait, i checked the wrong box
i owe lura $10
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throwing around dollars and statistics like that is pretty meaningless without knowing exactly where they come from. like i said before, if things like home loans are counted, the numbers mean something WAY different.
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If you want to sift through statistics, here (http://www.federalreserve.gov/releases/g19/Current/) are the US government numbers; it took me about five seconds to Google them. If you want a more solid source than that I can't help.
Point is, consumer debt alone is significant in the US. Consumer debt is relatively high interest debt that includes credit card debt, payday loans and so on and is generally not used to finance homes. US private debt is holding back growth.
But I don't mean to derail the thread. Just getting economics out of my system.
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Student loans. Enough said. >$5000. <$50,000. I'll be paying off my loans for years. Impossible to repay in 12 months but maybe I can manage in 36 months. Of course, that could bite me in the ass long-term if, in 5 years, we have massive inflation. In that case, I'd be better off waiting to repay so that inflation makes my substantial loans look like peanuts. Regardless, I'll repay ASAP and then settle down in post-grad life. I'll probably live paycheck to paycheck, but will avoid credit cards and selling equity.
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£40
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I guess we wait until somebody from another country chimes in on this.
It's not something that's discussed outside of close friends or colleagues, and numbers rarely enter the conversation.
Thank you for regurgitation of solatar. MP-ryan there in times to help you know what you already know. It's not like solatar is curious too, and what else to do than hope someone non american chimes in on the situation for some kind of info.
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Erm... MP-Ryan is from Canada, not the US. Most Canadians I've known do not think this is splitting hairs.
On topic: In the US, it is virtually impossible to buy a home without taking out a massive loan. I live in one of lowest cost-of-living parts of the country, am relatively affluent, and still had to take out >$125,000 in debt to buy a house that is way too small for my family a mere 4 years later. I don't know how you guys in more expensive parts of the country / world can afford to ever stop renting. The prospect of being in hock to a bunch of bank scheisters to the tune of $200,000 (let alone $300,000 or $400,000) gives me the screaming heebie-jeebies.
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Getting ridiculously lucky on a foreclosure auction helped.
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Thankfully i've lived my life so far paying for everything cash - which means saving up in many cases. This has saved me, I am sure, from a world of hurt.
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Yeah, idk why mp-ryan needed to be short with me. It just ended up him being a captain obvious (don't know where what i wrote earlier could not be understood) and i wasn't offensive. If someone from another country didn't want answer solatar's question, they just don't have too (and i don't need to get scolded in the process for being curious).
The best thing i could find to do, is buy a cheap plot of land and build you're own structure on it. I could get 1.5 acres at $7000 for something undeveloped. I don't do that because i have an awesome living situation, and am content with letting my rent money help my landlord buy this property we're on that came with a free house. Alaska has lots of this going around, other places do also but to different extents. Where most people live, stuff like that costs a pretty penny (i guess cheap prices on land are dependent on whether you feel like developing it or not).
Renting just sucks. I did live in a 4 bedroom apartment with a married couple and another person. All paying $400 a piece to fulfill the $1200 monthly rent. Prior to me moving in, the married couple lived there for 3 years. They did pump out $48000 total in 3 years of living there by themselves and the few times they had a room mate or two. They could have definitely done something else better if the money they have coming in is that steady.
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Yeah, idk why mp-ryan needed to be short with me. It just ended up him being a captain obvious (don't know where what i wrote earlier could not be understood) and i wasn't offensive. If someone from another country didn't want answer solatar's question, they just don't have too (and i don't need to get scolded in the process for being curious).
:wtf: He was just answering the question. The whole question was how financial matters are regarded / discussed in countries other than the US. As I have already pointed out, MP-Ryan isn't American. He's Canadian. Thus, he is providing a perspective from another country, as requested. I cannot see how you'd interpret anything he said as "being short" with anyone?
Thankfully i've lived my life so far paying for everything cash - which means saving up in many cases. This has saved me, I am sure, from a world of hurt.
Where buying a home is concerned, paying in cash is only an option if you are Filthy Stinking RichTM.
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Yeah, idk why mp-ryan needed to be short with me.
Because there wasn't much to say. He was telling you how debt works in Canada. Now you're crapping on him.
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Erm... MP-Ryan is from Canada, not the US. Most Canadians I've known do not think this is splitting hairs.
On topic: In the US, it is virtually impossible to buy a home without taking out a massive loan. I live in one of lowest cost-of-living parts of the country, am relatively affluent, and still had to take out >$125,000 in debt to buy a house that is way too small for my family a mere 4 years later. I don't know how you guys in more expensive parts of the country / world can afford to ever stop renting. The prospect of being in hock to a bunch of bank scheisters to the tune of $200,000 (let alone $300,000 or $400,000) gives me the screaming heebie-jeebies.
It's all about loan period and repayment plans. If you can afford to pay more on the principle (the actual balance), do so. For example, a $300k loan at 5% for 15 years is a $2372.38/mo payment. It'll cost $427,028 if you make all 180 payments. But if you repay it in 10 years--putting forth $3182/mo, it'll cost $381,836. Add to that your house can gain in value and that mortgage repayments are mostly tax deductible, your annual $38,184 loss counts against your income. If you and your spouse make $120k total, that means taxable income is closer to $82,000 and you'll, together, bring home $70,000 (after mortgage repayment). That's plenty to put towards cost of living and retirement and student loan repayment.
But yeah, massive loans are usually necessary. If you plan to move in the next 1-5 years, you should probably keep renting or, if you buy, hope the property sells for higher than you took the loan for. That way, you can take a chunk of money (tens or even hundreds of thousands) for the next house.
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I read somewhere that renting is more cost effective up until you live in one place for about five years, and after that it'd be better to buy a house. I do remember being skeptical of this article. Maybe I can find it later.
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I read somewhere that renting is more cost effective up until you live in one place for about five years, and after that it'd be better to buy a house. I do remember being skeptical of this article. Maybe I can find it later.
Well with a house, you're buying a tangible asset. With an apartment, your money evaporates with nothing in return. On the other hand, you also have to pay for gas and electricity, as well as taxes, upkeep, and the full value of any services added. And you're liable for keeping up with and within neighborhood codes.
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I read somewhere that renting is more cost effective up until you live in one place for about five years, and after that it'd be better to buy a house. I do remember being skeptical of this article. Maybe I can find it later.
Well with a house, you're buying a tangible asset. With an apartment, your money evaporates with nothing in return. On the other hand, you also have to pay for gas and electricity, as well as taxes, upkeep, and the full value of any services added. And you're liable for keeping up with and within neighborhood codes.
It's not nothing in return. You've got a place to live. I mean, you don't say buying and then eating food means you're just buying ****.
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What he means is that with rent, you are essentially paying for a service, not goods. Service is not something you can turn around and resell. Goods you can resell and get back at least some of the money you spent to buy them.
The principle you pay into your mortgage is money that you can get back when you sell the house (assuming the value of the house stays constant). If the value of the house increases, you can actually turn a profit. In the current market, I wouldn't bet on it.
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A service is still not nothing.
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Yeah, idk why mp-ryan needed to be short with me.
Because there wasn't much to say. He was telling you how debt works in Canada. Now you're crapping on him.
I'm glad it wasn't unclear to most people.
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that mortgage repayments are mostly tax deductible,
Oh God, I wish. There are a lot of screwy things about American mortgages, and their tax deductible nature arguably contributed heavily to the housing boom and collapse, but that feature would be SO nice here. I would plow all of the tax savings straight back into my mortgage and pay it off 10 years sooner.
On the subject of renting vs mortgages though...
My wife and I rented for several years (at low rental rates) because we didn't know where we would be living. When we bought our house last year, we expressly looked for a place that cost a little more but which we could live in comfortably, raise a family, and NOT have to renovate or move in the next 20 years. While we spent somewhere in the neighborhood of $80-90,000 (again, see my previous post on housing cost) more than some of our friends, we know we're staying here and not incurring moving costs again.
By contrast, we have friends who bought starter homes while prices were much inflated, and are now paying a mortgage at a value of approximately $70,000 MORE than the house is actually worth. Ouch. Had they rented another 18 months, they could have bought like we did
Really, the decision to rent or purchase depends on several factors:
1. Duration of stay.
2. Current personal financial stability (Good job? Permanent position?)
3. Interest rates AND housing prices (never look at one without the other).
4. Cost of renting versus cost of a mortgage.
5. Decision: Will future interest rates and prices offset the financial drain of renting now in order to save for the future?
6. Are my personal and family interests served better by owning my own home, or paying less in rent?
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The best thing i could find to do, is buy a cheap plot of land and build you're own structure on it. I could get 1.5 acres at $7000 for something undeveloped.
Heh, this makes me think of the South Jersey shore communities I've stayed at in the past. At least before the housing bubble burst, you'd have to pay a few hundred thousand just for a small lot a few blocks from the ocean. :p
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A service is still not nothing.
You're correct that having a roof over your head (even temporarily) is something tangible. However, you cannot resell most apartments (though you can sell the lease agreement). An apartment would be considered a service. On the other hand, a house is a tangible, durable product. If the house collapses through no fault of your own, insurance covers the loss but probably doesn't rebuild. If your apartment collapses through no fault of your own, you may have had renter's insurance but otherwise can consider it a complete loss.
The biggest pros for stand-alone houses include it being a tangible asset and possibly cheaper per square foot. Assuming the home is worth $200,000, your first payment has to beat 1/12th the interest and still pay into the principle. For example, a $200k mortgage at 6% means first payment is $1199.10. Every month, you pay 0.5% interest on the mortgage. That first month, $1000 of the payment is on interest and $199.10 is on the principle. The second month, $999 is on interest and $200.10 on the principle. The third month is $998 interest, $211.10 principle. By the 12th payment, the remaining principle is about $197,500. It doesn't seem like much (and it isn't), but the 360th payment is $6 interest and $1393.10 principle.
Above all, that's why you have to stay in a house for years or even decades for it to be a worthwhile investment. 12 months later, if housing values go up 10%, your $200k home ($2,500 in your pocket) is now worth $220k on the market, you can sell for $220k. $197,500 of that goes towards repaying the mortgage in full and the remainder--$22,500--goes into your pocket. What happened in the housing crisis is that people were hoping house values would continue to rise. They'd hop into adjustable-rate mortgages and bet that, in x months, the house will be worth more. Then not only do they pay similar to rent, but they'll make a lump sum at the end. The bet worked for years as urban homes especially skyrocketed in price, gaining 3%, 5%, 10%, or more each year. However, those house prices were only there because of demand; the actual value of the property didn't rise by 3%, 5%, 10%, etc.--it made smaller gains. That $200k house 3 years ago is worth $240k today according to the market, but is really worth more like $212k. Since the bubble wasn't just spread over a few years and year-to-year gains were pretty outrageous, (say, 3+5+10+8+5+8+10%) that house bought for $200k 7 years ago is now worth, on market, $320k. The actual value, however, was closer to $230k. Someone who bought the home for $320k loses $90k in equity practically overnight.
Anyways, I could go on and on about loan repayments and the like. MP-Ryan is correct, though. From a consumer standpoint, there's quite a few factors to consider if you're thinking of buying. One more thing to add, though...
7. Convenience: is the house closer/further from my and my spouse's workplaces? What's in the local neighborhood?
If you bought a house since the financial crisis or are paying for one from before the bubble expanded out of control, you're probably alright. While you owe that outrageous sum, the only thing you stand to lose is property of the home. In fact, I'd say your risk gets greater as time goes on, especially if you're laid off. If you paid $50k towards your mortgage principle, default, and are foreclosed upon, you lose that $50k. If you only paid $5k on the principle, you only stand to lose that relatively small sum. Remember that the bank owns the title to the house until you finish paying the principle.
That's also why it's so important to pay for loans as soon as possible, prioritizing the highest interest rates and then the highest sums. If you owe $10,000 on your credit card and have a 30% APR, you need to pay the credit card as soon as possible. Today, you owe $10k. If you can afford a $1k payment, you'll only owe $9,225. The second month, you'll owe $8430. The third, $7616. If you keep paying $1000/mo... the twelfth, you'll only need to pay $308 and then you'll owe nothing more. The credit card company cared more about the interest payment ($250/mo) and asked for $300 or $400 a month--which would draw out repaying for 5 years and let them collect that 30% APR as long as they can.
Anyways, if you had other debts at lower rates, you'd take that 12th month's $692 extra and put it towards a second debt that now has the highest interest--and keep doing putting your set "debts payment" against the highest interest rate. Instead of pocketing $1000 after paying that credit card, you should put that $1000 towards the mortgage. Going back to that $200k @ 6% fixed mortgage, you'd then add the $1,000 towards the mortgage in full; instead of $1200/mo, you'd put forth $2200 and your 30-year mortgage would be paid off in 10 years 2 months.
In the long term, I'd classify loans with collateral (real estate, vehicles, capital expenditure) as different from unsecured loans (health, education, furniture, etc.). The former isn't really debt as repayment ends in the collateral being seized and sold, while the latter will haunt you and make your life far more miserable.
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:wtf: He was just answering the question. The whole question was how financial matters are regarded / discussed in countries other than the US. As I have already pointed out, MP-Ryan isn't American. He's Canadian. Thus, he is providing a perspective from another country, as requested. I cannot see how you'd interpret anything he said as "being short" with anyone?
The shortness of his answer to his question lead me to believe that he was being short with me. What would've really helped in his communication of his answer to me would be at least letting me know what country he's from. If that would've happened. I wouldn't have been so quick to figure agitation on his end from what appeared to be offense taken from me asking the question (which was actually solatar's question that i was also hoping for an answer like he). I reread his answer. No he wasn't being short. But like i said, it's not much of an answer for the question not stating what country he is from. I'll admit when i was wrong, and i was wrong in the way i interpreted mp-ryan's answer. But, he could've communicated better. That's what led to all of this.
I'm going to leave this thread since my presence anymore in it will further derail an educational thread.
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Man, remind me to ask Bob-san if I ever need financial advice. :p