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Net Worth = Assets - Liabilities. |
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after all, we're not politicians here, who take sides no matter what. SmileWavy |
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Where is the self control in this country?? I want a new Porsche, but I don't run out and buy one... |
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As for the PLAN...Hmmm, I didn't actually state a plan, brainstorming... 1. No tax breaks for interest on home mortgages above a certain level (actually kind of happening with the AMT) 2. Tighten up the financing laws, and interest rates (obviously this may cause a recession) - essentially making it harder for poor risk people to get any credit. 3. Tax the heck out of imports (also could cause a recession). 4. Tax the advertising industry separately.:D 5. Eliminate income taxes and go with a pure VAT. 6. They've already eliminated some stuff like bankruptcy to avoid debt. 7. Force manufacturers to deal with recycling their products which become trash - I'm thinking electronics here, not guns. The problem with all this stuff, unfortunately, is that it flies in the face of the current valuation system. A company is valued for more sales, almost more so, than its profit margin. America/stock market is still stuck on more # = better rather more quality = better. I'm sure the anarchists among us will love the above ideas. |
Let's put some numbers on this, then.
According to the Census Bureau, there are approximately 110 million households. Additionally, the Census Bureau states that total household financial assets for 2005 is $38 trillion (includes stocks, bonds, pension funds, etc), and total household liabilities is $11.9 trillion for 2005. The numbers are from 2007 Statistical Abstract: Census Bureau Let's calculate the numbers based on the claim: Quote:
If the statistics represent truth, then the middle class is like the dinosaurs a few years before extinction. This may not be a bunch of lazy, stupid people making stupid choices in life. Generally, half the nation's households are financially upside down. In case you were wondering, I'm not offering solutions. I'm just whining.:p |
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My grandparents are a prime example of this. In the 70's my grandpa was making over 200K a year. Today, I am 18 and I have more money in the bank than he does. They just bought every thing in sight. When my dad was 16 his family had 8 cars for 3 drivers. They had no idea how to save. You dont have to make a ton of money to not be up to your eyeballs in debt, you just have to live within your means |
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I witnessed a father/adult son conversation about the son's new car purchase. It went something like this: Dad: "Hey, did you get a deal on the car? What are your payments." Son: "Only $350/month!" Dad: "Way to go!" If dad had a clue he would have asked about the interest rate, length of the loan, how much did he put down, what's the total cost of credit, etc, etc. All Pa had to hear was the payment to be satisfied that junior got a good deal. It bugs me that some of my closest friends will never be able to retire. Currently they live in larger homes, take better vacations, buy more stuff, etc, than we do, but it kills me that these guys who are in there 40s have zero or negative net worths. |
And a balance sheet can be misleading, too. While it's nice to have a ton of equity in your home/cars/art collection, those are just ongoing expenses until they are sold. The real test of wealth is earning assets.
That aside, I'm still boggled that more than half of the population is upside down. Downright scary.. |
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I guess my concern here is that when you start making government policy to curb individual choices you start on a slippery slope. Of course our government has already started down that slope with taxes on tobacco and alcohol, laws against the sex industry, etc. I'm not saying those ideas are bad or even that some of the ideas for helping people stay out of debt are bad. I hope that we don't end up in a future where we all eat a government mandated diet (to avoid health risks), drive government mandated cars (to save on fuel and improve driver safety), watch government mandated TV, and wear government mandated clothing. |
Lenders need to be a little more responsible about handing out credit. If Joe sixpack isn't smart enough to manage all that credit without getting himself hopelessly in the hole, don't extend the credit to him.
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Coupla points and thoughts;
-in banking, deposits are a liability, not an asset. -AK-47's (amongst others) should not be polished but oiled instead. -90% of the rich people i know got there by being born to the right circumstances. they are given opportunities by other rich folks who assume anyone who is rich must know what they are doing. not always the case, but hey, who's keeping track. once GIVEN that first million or whatever it takes very little skill to make it grow quickly. -A-L=E. My grocery store doesn't accept E as payment for food. -i wonder just how many people are in fact spending away with the thought that akhmed is going to start WW3 in the coming months and it will all be over anyways. -WTF was that guard thinking when he left Jack's dad alone with his son?! |
Was Berettafan watching 24 on a large screen tv, sitting on a leather la-z-boy, in a million dollar house, all paid for on credit?
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Well the rent-a-center people found me so no more leather couch and big screen;)
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BTW Wayne, if the dollar tanks, the economy will tank too. Once all the industries which have been exported can get built/running again, (resulting in a trade surplus since the dollar is so devalued), then the economy will truly be back on the road to health. Problem is there is India, and China, and most of Africa that all would love to provide cheap labor for a while. Since birth control is almost absent in all but China (where there are so durn many people anyway), labor is going to get cheap for a long time. |
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ps: I'm NOT in that category however... |
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Sorry Wayne, but this is incorrect. Stick with CPA's for tax advice. |
Oh, and a 'here here' on teaching basic financial skills in high school!
I got it in an optional accounting class. Shouldn't be optional, that is for sure. |
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