Christmas has come and gone and while most Americans have taken down the tree and cleaned up the mess, they've yet to evaluate the financial wreckage of another financed holiday season.
Reportedly shoppers in the U.S. racked up an average of $1,054 of debt over the 2020 Christmas season — an increase of 5% over last year. In fact, 44% of shoppers racked up more than $1,000 in holiday debt, while 5% accumulated more than $5,000 in debt. Go, Santa!
Bouncing back from those purchases won’t come as easy (for most people) as buying the gifts did, and paying off the doubt will outlast the holiday cheer by far...without a payoff plan, that is.
Based on a consumer survey, only half of those holiday spenders plan to repay the debt within 3 months — others (29%) said they need more than five months to pay it off - leading to interest on the credit card debt and growing balances. Like hamsters on a wheel, they'll keep throwing money at the...
Banks are the only business in the world that uses somebody else's money to build wealth! Congratulations...your compound interest is helping to build a bank on every corner across America...and it's making them filthy rich.
Here's how it works. When a bank receives money from a depositor, the bank then loans out a portion of that money. This is called fractional lending - it’s how banks make money. They loan out a portion of what has already been deposited. We deposit in - they loan out!
Many banks have minimum amounts of liquidity. That means that they only loan out a certain portion of their total deposits.
For example, let’s say a bank has 50% liquidity; that means that they keep at least 50% of their deposited money ready for customers to withdraw at any time.
But, when you leave that much money just sitting there, the bank isn’t making any significant returns. So… what do most banks do? They loan out most of the money that...
There's no denying the fact that real estate is a great long-term investment...if you look at it with a long-term perspective, that is. You can't really go wrong when it comes to investing in housing - but the name of the game isn't to repeatedly borrow against an asset...the name of the game is to actually OWN it...or at least most of it so you can leverage your way to wealth!
Unfortunately, homeowners often think of their investment as a giant ATM machine, and plenty of them are eager to cash out every chance they get for as much as they possibly can. Some people cash-out to play...perhaps a vacation or to fund a wedding - but people cash- out to pay off other debt with higher interest rates; and they do so without blinking an eye about beginning the 30-year debt cycle all over again. Bye-bye, equity. So much for that long term investment perspective - it doesn't take much to go from asset to liability with this strategy! Lather, rinse,...
No doubt real estate is a great investment, but long-gone are the days where prices soared overnight....a time when even a blind monkey could make a quick dollar on a good flip. But what happens when prices don't soar like you thought they would? Worse yet, what happens when they drop?
What goes up, must come down...including real estate, and it's for this very reason that it's a good idea to build your own equity as fast as you can instead of waiting for the market to build it for you. The idea of bringing money to the table to sell a house may not be familiar to YOU, but it's a common occurrence for people in need of selling when the market hasn't produced the gain sufficient to cover the cost of selling and/or closing.
People investing in the stock market understand that what goes up must (eventually) come down, while people investing in real estate never expect to get caught short. The stock market "resets" itself and the real estate...
To rob Peter to pay Paul means to take money from one source to give it to another. Usually, robbing Peter to pay Paul means taking the money to pay off one debt to pay off another debt. Basically, It is a situation where there is not enough money to go around and one must choose which debt is more urgently in need of payment. Yep, that pretty much sums up the way most Americans are managing their finances these days!
I'm not sure how it happened, but somehow people see debt as a good replacement for cash; in this case, the abnormal has become the norm. They'll open a new credit card account with a better interest rate to pay off another, and before you know it both cards are maxed out because they couldn't resist using plastic when they wanted to spend what they didn't have - they Rob Peter to pay Paul.
Most people refrain from adding anything to a savings account for "a rainy day" as long as they have a little room on a...