2013년 11월 24일 일요일

About 'is debt or equity cheaper'|... with equities and thought...to load up on debt. It's difficult...and the result is abnormally low long..., cheap foreign labor...of slow growth or even recession, or...







About 'is debt or equity cheaper'|... with equities and thought...to load up on debt. It's difficult...and the result is abnormally low long..., cheap foreign labor...of slow growth or even recession, or...








               According               to               a               recent               NBC               News               article,               younger               American               seems               to               be               taking               on               the               attitude               of               "No               house,               no               car,               less               debt".

In               many               instances,               it               appears               that               the               recent               recession               and               economic               hardships               that               have               accompanied               it               have               either               forced               younger               Americans               into               this               situation               or               taught               them               enough               to               know               not               to               overextend               themselves               financially.
               Personally,               even               though               my               wife               and               I               fit               the               35               and               under               age               category,               our               situations               is               not               one               of               "no               house,               no               car,               less               debt,"               but               one               of               "house,               car,               no               debt".

While               it               wasn't               an               easy               path               to               get               to               this               point,               here               is               how               we               did               it.
               House
               The               housing               market               collapse               hit               us               hard.

We               had               just               purchased               our               first               home               in               the               middle               of               2008               and               we               thought               that               we               had               avoided               the               majority               of               the               housing               market's               demise.
               We               were               wrong.
               While               home               values               in               our               area               dropped               by               about               10               percent               before               leveling               off,               after               a               short               respite               they               continued               their               long               journey               down               to               the               bottom               of               the               market,               dropping               a               total               of               almost               40               percent               and               actually               still               falling               in               the               area               of               Chicagoland               in               which               we               purchased.
               We               lost               nearly               $100,000               on               this               home               when               we               sold               in               2011,               but               we               found               a               way               to               make               the               situation               a               positive               one.

Rather               than               just               giving               up,               we               took               the               little               remaining               equity               we               had               from               our               home,               sold               a               lot               of               our               unneeded               possessions,               and               downsized               significantly.

We               purchased               a               much               smaller               home               --               a               two               bedroom               one               bath               condo               --               that               was               about               half               the               price               of               our               first               home.

We               bought               the               home               outright               so               that               we               could               avoid               the               costs               and               constraints               of               a               mortgage,               as               well               as               the               associated               interest.

While               our               first               home               experience               was               far               from               a               perfect               one,               we               did               our               best               to               make               the               best               of               a               bad               situation.
               Car
               While               we               are               currently               a               one-vehicle               family;               I               guess               the               takeaway               from               that               is               that               we               at               least               have               a               decently               working               vehicle.

According               to               the               NBC               News               article:
               Younger               Americans               are               also               putting               off               borrowing               to               make               other               big-ticket               purchases,               including               cars.

In               2007,               when               credit               was               easy               to               get,               nearly               three               out               of               four               under-25               households               had               a               car,               the               Pew               researchers               reported.

By               2011,               that               number               had               dropped               to               two-thirds.

Despite               a               recent               surge               in               car               buying,               and               a               pickup               in               auto               lending               to               subprime               borrowers,               both               the               number               of               younger               households               and               their               average               loan               balances               have               fallen               since               2007.
               We               have               avoided               taking               on               a               vehicle               loan               for               several               reasons.

First               off,               we               downsized               to               our               one-vehicle               situation               in               order               to               cut               costs               on               things               like               parking,               insurance,               maintenance,               and               upkeep.

Secondly,               we've               looked               at               newer               used               vehicles,               and               most               of               what               we've               seeing               out               there               isn't               much               better               than               what               we               have               now,               and               making               such               a               purchase               could               end               up               being               costlier               than               just               maintaining               our               current               vehicle.
               Therefore,               since               we're               not               willing               to               buy               new,               and               the               used               inventory               isn't               on               par               with               what               we'd               like,               we're               willing               to               have               to               put               $1,000               or               so               into               vehicle               maintenance               each               year               since               it's               still               cheaper               than               buying               a               used               vehicle               or               making               payments               on               a               new               one.
               No               Debt
               The               NBC               News               article               state               that,               "Americans               under               35               are               carrying               substantially               less               debt               than               they               were               before               the               2008               meltdown,               according               to               an               analysis               released               Thursday               by               the               Pew               Research               Center."
               We're               not               only               carrying               less               debt,               we're               carrying               no               debt               at               all.

The               entirety               of               our               debt               in               2008               came               from               our               home               mortgage,               and               the               elimination               of               the               debt               when               we               downsized               in               order               to               own               outright               allowed               us               to               become               debt               free               and               stay               that               way.

With               no               mortgage               payment,               we               can               ensure               payment               of               bills               with               greater               reliability               since               we               have               more               money               to               put               toward               these               areas.
               Therefore,               while               we're               similar               to               the               younger               American               norm               after               the               2008               financial               crisis               and               recession,               we're               trying               to               take               it               a               step               further               and               push               ourselves               even               harder               to               stay               financially               stable               and               responsible               members               of               the               younger               generation.
               More               From               This               Contributor:
               5               Websites               that               Could               Save               You               Money
               How               I               Differentiate               My               Blog
               Preparing               to               Publish               My               First               E-book
               Disclaimer:
               The               author               is               not               a               licensed               financial               professional.

The               information               provided               in               this               article               is               for               informational               purposes               only               and               does               not               constitute               legal               or               financial               advice.

Any               action               taken               by               the               reader               due               to               the               information               provided               in               this               article               is               solely               at               the               reader's               discretion.
               Sources:
               Schoen,               John               W.

NBCNews.com.

"Younger               Americans:               No               house,               no               car,               less               debt".

February               22,               2013.

http://www.nbcnews.com/business/economywatch/younger-americans-no-house-no-car-less-debt-1C8473187.

February               23,               2013.







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