A Quote by Michael J. Knowles
People go into debt when they judge it beneficial to borrow money against their future earnings. Few can afford to buy a house outright, but many consider it worthwhile to take out a loan, which they will service and pay off over time, for the immediate privilege of living and investing in a house.
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Now, suppose that a homeowner puts down only 3% of their own money or 3.5% for the FHA. That means if prices go down by only 3%, the house will be in negative equity and it would pay the homeowner just to walk away and say, "The house now is worth less than the mortgage I owe. I think I'm just going to move out and buy a cheaper house." So it's very risky when you have only a 3% or 3.5% equity for the loan. The bank really isn't left with much cushion as collateral.
The worst loophole is what Donald Trump has talked about: the tax deductibility of interest. If you let real estate owners or corporate raiders borrow the money to buy a property or company, and then pay interest to the bondholders, you'll load the company you take over with debt. But you don't have to pay taxes on the profits that you pay out in this way. You can deduct the interest from your tax liability.
These debt obligations will simply erode America's standard of living in the future. Money spent to service the debt is money that we don't have to spend on consumption's goods, or on investment in our future.
I don't save money. Save is a four letter word! I like to borrow money because I can get richer faster on borrowed money. I have what is called retained earnings, so I don't have to save money. If I need money, I will go out and borrow it.
Bad karma is the spiritual debt one has accumulated for one's mistakes from all previous lives and this life. It includes killing, harming, taking advantage, cheating, stealing, and more. On Mother Earth, when you buy a house, you take out a mortgage from a bank. This mortgage is your debt to the bank. You pay every month for fifteen, twenty, or thirty years to clear your financial debt. In the spiritual realm, if you have bad karma, you may have to pay for many lifetimes to clear your spiritual debt.
A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.
I'm short-selling my house. I have more loans than I can sell the house for. The house will not go into foreclosure. It will be a short sale. I can't afford the house as I once could.
People look at the future and see a black hole. They look at climate change and see an ecological crisis. They look at their leaders corrupted by money and see a political crisis. They wonder if they'll ever be able to pay off their student loan or own a house. Given this ecological, political and financial crisis, what they want is a different future. Their fundamental demand is a different regime to provide that future.
I recalled how a lot of my older siblings would go to a friend's house and borrow records to play and sometimes borrow a turntable because we didn't have a turntable in the house until I was 8, about the same time we had a TV.
One of the big problems with growth investing is that we can't estimate earnings very well. I really want to buy growth at value prices. I always look at trailing earnings when I judge stocks.
God's dream is that you have an abundance, that you be totally out of debt, pay your house off, pay your credit cards off, and have so much overflow that you can be a blessing to everyone around you!
First, pay off your high-interest-rate debt. If you have student loan debt - that's low interest rate; that has a tax benefit - you can leave that out. A mortgage can be an OK one. Credit card debt is poison. That needs to be paid off right away.
Money is not the most important thing, but when you need it, there are few substitutes. So while I like the things money can buy, I love what money won't buy. It bought me a house but it won't buy me a home. It would buy me a companion but it won't buy me a friend.
As you have to pay more interest and amortization on what you owe, you're left with less and less money to buy goods and services - unless you borrow even more and go further into debt.
The people who are taking these loans because it's the only way they can afford their house are exposing themselves to a lot of risk. They're not saving money and they're not building equity, which means they could find themselves in a scenario where they owe more money than their house is worth.
The debt settlement company will direct you to stop paying your creditor and instead send the money directly to them each month. The company's goal is to demonstrate to your creditor that you don't have the money to pay up - that's your leverage. After a few months, the company will typically go to the creditor and say, "I'm holding X dollars on behalf of your customer. He doesn't have the money to pay you, so you should take this amount as a settlement or you'll end up with nothing." If the creditor wants to get paid badly enough, it will take the money.
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