Credit in the News

[MrShush]

http://www.phillyburbs.com/lifestyle/young_heart/does-that-make-ense-this-family-has-m-in-debt/artic...

[Adalen]

I would hope this is common knowledge, although that article is about national debt and not a "wealthy" family.  Honestly, if you don't learn how to manage $1, you won't know how to manage $1,000,000.. which is why I don't play the Lotto.

Mo' money, mo' problems.

[jefftca925]

This post really doesn't belong in this forum and should be deleted as it is related to politics. We really don't wanna go there...

[MrShush]

I posted this not to incite a political debate at all, rather the family of focus at the beginning. Economics, household or national, doesn't have to be a taboo topic.

Fictional or not, there are many high earning individuals I have worked with who have great jobs, excellent credit, but can't get approved for anything because their DTI is greater than 100%. The focus on credit cards in this forum seems to be largely around getting more and more. It is all too easy to spend more than one is physically able to repay.

[LS2982]

Thread needs to be deleted because it is politically motivated and a made up story to bash the current economy.

[llecs]

IMO, this thread is OK, provided future posters don't invoke politicking into their discussion (e.g. this Party failed to do this, or that Party is screwing us up). In other words, so as long as political parties or political names aren't added to the mix, and the comments are confined to addressing problems and/or solutions relating to the topic at hand, and everyone remains civil, then all would be well......otherwise post in HuffPo or National Review Online.

[Koop10010]

It doesn't matter how much money you make, if you have low self-control and don't live within your means, you're going to have problems.

[FrugalRican]

On a monthly basis, I see people that make 4X more than I do, and yet, their accounts are usually in the red.

Not even for a second do I believe that someone who makes more than me is less likely to carry no debt at all. If you make 4K a month and spend 4.5K... you can't really think you make a lot.

I know one man who makes 4K each WEEK and still can't keep his expenses down. His overdraft fees come out in the THOUSANDS by the end of the year.

[SoulMaster]

To the OP: I would argue that this family isn't wealthy at all.  Huge income <> wealth, it equals a huge income.

In fact, if Weath = Assets - Liabilities, then it must be true that in order to have a positive wealth, you must have less debt than assets.  I think the point you were trying to make is that people who make a ton of cheddar can be just as dumb (or more dumb) than those with modest incomes.  On that point, I'd agree wholeheartedly, as I used to be a SINK making ~$250K/year and still wound up filing BK.  I had no wealth.

The definition of wealth I use is slightly different than the simple formula above:  I'll consider myself "wealthy" when my cash/investments generate more income per year than I earn working.  IMO, true wealth means you don't have to work unless you want to.

My 2% Cashback,

-SM

[annielorie]

Just to put some perspective:  Ask a sick person their definition of WEALTH