Poor rich people

[Anonyne#017]

There has been this group of people slowly increasing behind silently, which has gotten slightly mention lately and are so called rich people who are poor. This refers to people whose monthly income is above average salary or enough to be considered as rich or matching other higher class income, but these people are living in debt hell. Even thought their income is considered above average, they are losing most of their money paying back their debts leaving them only a little bit of money. These are people from all kind of career areas including managers, lawyers etc. who have been driven to debt hell each with different reasons; failed business attempts, living over their means or other imprecise loans or living styles, arrogance and whatever imago bubbles.

Personally I have always been quite stubborn with these kind of things. I do not like leechers or leeching. I've always been quite independent on that matter and prefered doing things myself (at least when it comes to trying at least once). I've never taken even a single penny of loan in my life. Still today, I have no debts to pay or worry about. I'm not calling myself rich or anything, but I've never really had any need of taking any kind of loan and I've just lived simple when needed. There are of course many people out there who live in different kind of areas or born in different kind of families and might end up being forced to certain kind of life...

What about you people? How many of you have taken loans? How much for average? What reasons? Studies, private business, cars, houses? Do you have a stable plan for long run to pay back? Perhaps you might lose your job one day and end up selling ass on the streets, perhaps you might get increase to your salary or winning in lottery? Or what about your partners? Money related issues tend to be one of the most common reasons of fights in relationships too. How much do you share your money related matters together. Do you plan a lot for the future, think what you are going to buy? Are you perhaps like a woman who buys whatever useless shiny things (when their husband is not lookins and hiding them under the bed in shame) because they look nice or they want to make their friends jealous of new shoes to boost their silly social status amongst bitches or something?

 

[bigwarmload]

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^ That's called the American Middle Class.

 

[Rey C.]

I divide (personal) debt into two categories: debt to buy appreciating assets and debt to buy depreciating assets. I put education, real estate, a business, etc. in the (theoretically) appreciating category. Things like cars, shoes, clothes, big screen TV sets, etc. all go into the depreciating category. So to me, you have good debt for appreciating assets and bad debt for depreciating assets.

I'm in the process of buying a car right now. The debt that I will take on will be bad debt, because the car is going to go down in value over time. I have the money to pay cash for it, but my plan is to soften the blow of depreciation by taking a low interest loan for the purchase price and investing the money at a rate that's roughly twice what the loan rate will be. That's the plan anyway. A 2% +/- 5 year auto loan vs. a stable, dividend paying stock yielding 4% +/-, that can be sold to pay the car off, if necessary. I'll still take a hit on the depreciation. But not as much as if I just paid cash for the car or used a loan and didn't have the like amount of cash to invest.

BTW, you make a very good point and a keen observation about so called "rich people" who spend more than they earn (rep given). The common term for them is "credit card millionaires". Some people have the need to appear wealthy/keep up with the Joneses, and they use debt to do it. They tend to buy the trappings of success (cars, over-priced houses, clothes, imported furniture, etc.), and not invest in assets that will/should pay off down the line. I am a former Yuppie/child of the go-go 80's. I had fun, but I'm now rather ashamed of what I was and how I was. But thankfully, my soul was saved and I now see the light. Maybe not an :angels:, but I'm doing better than I used to. I still like nice things. I'm still fascinated by investing and making deals just for the sake of making deals. But I'm not consumed by the need to make money and spend it all (and then some) just to to fit in with a bunch of people who have (also) lost their souls and worship money and possessions above all else. Now, the idea of being comfortable down the line, trying to do right by those I care about, not having to work when I'm 65 (or whatever) and not having to worry about servicing debt for needless, useless crap means a LOT more! Feels better... healthier... cleaner.


Cool thread. Good thinking. :yesyes:

 

[bobjustbob]

We call them "House-Poor". It starts when you've got enough for a down and figure the mortgage and taxes are less than rent. Gotta furnish the place. Sacrifice a vacation or 2. Wouldn't it be nice to plant some shrubs? That's only a few hundred bucks, we won't eat out as much. Let's buy some lawn equipment to keep it up. We used to get new cars every 4 years but haven't since we got the house. We now need a new transmission. The air conditioner or furnace just went out. Open the wallet. Congratulations! The value of your property just went up, we're going to increase your taxes. Those extra kids cost more than diapers. Build them a swing set and put in a pool...

What happened to our raises? We had it all planned out. How much is our cable and cell phones now after the introductory offer? Can't cut back on that... Very typical. You all know people living the way I just described.

 

[Anonyne#017]

I divide (personal) debt into two categories: debt to buy appreciating assets and debt to buy depreciating assets. I put education, real estate, a business, etc. in the (theoretically) appreciating category. Things like cars, shoes, clothes, big screen TV sets, etc. all go into the depreciating category. So to me, you have good debt for appreciating assets and bad debt for depreciating assets.

I'm in the process of buying a car right now. The debt that I will take on will be bad debt, because the car is going to go down in value over time. I have the money to pay cash for it, but my plan is to soften the blow of depreciation by taking a low interest loan for the purchase price and investing the money at a rate that's roughly twice what the loan rate will be. That's the plan anyway. A 2% +/- 5 year auto loan vs. a stable, dividend paying stock yielding 4% +/-, that can be sold to pay the car off, if necessary. I'll still take a hit on the depreciation. But not as much as if I just paid cash for the car or used a loan and didn't have the like amount of cash to invest.

BTW, you make a very good point and a keen observation about so called "rich people" who spend more than they earn (rep given). The common term for them is "credit card millionaires". Some people have the need to appear wealthy/keep up with the Joneses, and they use debt to do it. They tend to buy the trappings of success (cars, over-priced houses, clothes, imported furniture, etc.), and not invest in assets that will/should pay off down the line. I am a former Yuppie/child of the go-go 80's. I had fun, but I'm now rather ashamed of what I was and how I was. But thankfully, my soul was saved and I now see the light. Maybe not an :angels:, but I'm doing better than I used to. I still like nice things. I'm still fascinated by investing and making deals just for the sake of making deals. But I'm not consumed by the need to make money and spend it all (and then some) just to to fit in with a bunch of people who have (also) lost their souls and worship money and possessions above all else. Now, the idea of being comfortable down the line, trying to do right by those I care about, not having to work when I'm 65 (or whatever) and not having to worry about servicing debt for needless, useless crap means a LOT more! Feels better... healthier... cleaner.


Cool thread. Good thinking. :yesyes:

Ah, nice reply. I wasn't really expecting too much from people actually being willing to talk about financial related issues openly. But I believe that this might be somewhat close subject for porn girls too regarding type of their career. I know that here are people from different corners of the world who have slightly different cultural practices regarding these kind of things, which I'm not too familiar with. I live personally in a country where lot of things, like schooling are mostly funded from tax-money.

Thought I'm not talking solely of people who live for silly imago, but also people who have been forced to these kind of situations through bad decisions or unluckiness too. Imago bubbles and arrogance simply works as one cause which might lead to these kind of problems. There are also people who have failed business in the past or simply have been used to have higher salaries in the past. These people might have had enough money to do their payments in the past, but aren't earning enough money anymore. These people might be making for example 10 000 € / month (which is pretty good salary here while excluding millionaires and other astronomical salaries), but that all money simply goes to paying off their old debts and they are left with barely anything. It's a rather a matter of, where person who makes more money, won't save any more money in the end than person who makes much less.

 

[Harley Spencer]

Interesting thread.

I've never taken out a loan and have lived a pretty simple life as far as money is concerned. I grew up in a poor family, not even being able to afford lunch at school, couldn't go shopping like the rest of the kids at the start of the school year for new supplies, having to miss out on certain field trips because we couldn't afford it, not being able to afford seeing a doctor, only going grocery shopping once a month. Eventually I got my own job and was able to pay for my own things, including doctor bills.

The only debt I've ever had has been old doctor and dentist bills, and a fine I had to pay once. Anytime I've ever been down financially, I simply spent very sparsely. Not going out to eat or buying new clothes, getting the cheapest things at grocery stores, only eating meals at work when it was free, rolling my own cigarettes, etc. And since I'm not the type of girl to get my hair done at salons, get manicures and pedicures, go tanning, etc. I have less luxuries to worry about affording.

I also don't have a single credit card and don't plan on ever getting one. Sure, some people can manage them just fine and never end up with credit card debt in their entire lives, but I don't want to go down that path. Having no credit of course also means not being able to do certain things that require said credit, but I can live with that. I've managed to skate by thus far, and would prefer to live the rest of my life spending only money that I actually have in my bank account or in my pocket.

Getting rich isn't really my goal in life, as nice as that would be. I just want to live comfortably- get a house, doesn't have to be a big one, not have to live paycheck to paycheck, being able to go on a vacation without having to worry whether it's going to break the bank, much less take a vacation that isn't work related. Forget all the fancy cars, jewelry, designer clothes, expensive wines (I don't even like wine so :dunno, first class flying, etc. Not for me.

 

[SabrinaDeep]

Never ever debts. No line of credits, no monthly payments, not even a credit card. I live pretty good with what i just save from not having to pay interests back and when i go to my bank i can give them shit if i need to without need of diplomacy. of course these days i can afford things i couldn't earlier and it has been strange at times not to be able to do some things which seemed normal to other people; but now those things taste really sweet, being a 100% product of my efforts and work.