Yet another financial question

[Rigmaster]

ctrlguy- I think you have some........ umm.... control issues......

[RobertK]

Of course they have no useful economical return. They also have no economical liability once payed off. My point was, for the third time, this is not an argument about spending habits, so the post regarding middle class, rich, poor, etc... was absolutely pointless, and it was wrong. I forget who it was, wasn't you though.

The debate is about whether credit cards are good or not, and for the third time, IT DEPENDS.


end.

I was simply pointing out that credit is mainly used by the middle class and the MAIN reason is because they buy many things they THINK are assets but are really liabilities.

Anything that LOOSES VALUE = liability. (ie. your TV, your car, etc.)

Anything that CREATES income = asset. (ie. real estate, businesses, stocks, etc.)

If you are comfortable being middle class do as the middle class do - worry about building a credit score so you can continue to borrow for everything.
If you are serious about wanting to build wealth or be wealthy do as the rich do - use your income to purchase income producing assets.

Who ever said it was a "money making" scheme? We all spend money, day to day.... why not get something in return? If you can't see that, you have lost your mind...

You obviously missed the part where people are likely to spend 18-36% MORE when using their "rewarding" credit cards. Do you really think that a credit card company is a non-profit organization? Reward programs are so popular because most people use them as an excuse to overspend and the credit card companies spent millions in market research and advertising to ensure it. Surely you're not so naive to think that banks would freely give out money with no ROI?

I forgot to mention 401K....

Why do you have a 401k when you live in Canada? IIRC a 401k is a US retirement investing tax shelter.

[Turf1600]

It's like talking to a brick wall guys. Next thing you know he'll be asking for a copy of your mortgage.

[rwh11385]

Just because you read articles and books detailing a way to pull you out of debt and live within your means doesn't mean that's the only way to live.

Hahahaha. Solid.

That makes no sense. An asset is something with future economic value. A liability is an obligation.

+1. Someone doesn't know jack shit about accounting, regardless of how many Dave Ramsey books they read. Depreciation is just an expense of having new assets.

Of course they have no useful economical return.

Yeah - Last time i checked, most people buy TV's for personal utility (economic word for happiness) - NOT AS AN INVESTMENT, hahahaha. rofl.

Where am I exactly? All wise, all knowing, 22 year old punk?

Still waiting to run your credit score.... cash in hand, and NO it doesn't affect your credit rating.... dumb ass

Hahaha, I love other people clowning on psloan. I get all the humor for none of the work.

p.s. RobertK is a dumbass as well.

[JGood]

I was simply pointing out that credit is mainly used by the middle class and the MAIN reason is because they buy many things they THINK are assets but are really liabilities.

Anything that LOOSES VALUE = liability. (ie. your TV, your car, etc.)

Anything that CREATES income = asset. (ie. real estate, businesses, stocks, etc.)

That is completely wrong. A liability is an obligation.

Once you purchase an item, and pay for it, how is it an obligation? It's not.

The payments created by gaining ownership of the item are your liabilities.

I've never met anyone who thinks the things they buy (TV's, cars, computers, microwaves, etc...) are assets in the sense that they will have future economic benefit. Nor have I ever heard of anyone owing money due to ownership of these items AFTER they are paid for.

I think you were trying to quote common financial advice phrases, but you mixed up the wording a bit, and it doesn't make sense.

And I still fail to see how this has anything to do with the argument. You are talking about self control, not CC vs. debit card spending.

I'm not sure how rich people only spend money on assets. They don't own TV's and refrigerators? Of course they do, they also have self control and don't buy stupid shit, and have great jobs. They invest their extra money in assets, so they can snowball their income.

I invest my extra money in 401k, and contribute a bit to savings each paycheck. The rest gets spent on racing because that's what I live to do. I have no wife or kids. So I'm not living successfully, and I should tear up my $13k CC (which has a 0 balance), stop racing and start investing in assets? Ha, yeah...

[rwh11385]

I was simply pointing out that credit is mainly used by the middle class and the MAIN reason is because they buy many things they THINK are assets but are really liabilities.

Anything that LOOSES VALUE = liability. (ie. your TV, your car, etc.)

Anything that CREATES income = asset. (ie. real estate, businesses, stocks, etc.)

You are a fucking moron. You don't think rich people use credit cards or other forms of financing? Have you never taken a corporate finance course? Companies always will try to find the cheapest means of paying for a purchase later, and they usually don't get rewards unless they get an early payment discount, etc.

Actually, you couldn't be more wrong. A machine in a factory loses value very much so and has to be replaced, but it is still a very important asset. The loss is value is called depreciation and is written against profits coming from it. In a personal life, the profit from owning a TV, a car, etc. is the utility you draw from it. Sure there is an expense from having a new car, or traveling, but they are important sometimes to personal happiness, something that does not show on a balance sheet.

A liability is an obligation, as JGood mentioned, not a value-losing asset or an expense - very different things if you know JACK SHIT about accounting, but it is clear you do not - hence why you are too retarded to use credit cards.

You keep saying you don't want to middle class, yet are you educated at all? You are some guy who plugs in keyboards and reset passwords (a bitch who is easily replaced) and parts cars in your driveway while not using credit cards living under a tin foil hat avoiding FICO. Where in this plan do you move up or even enjoy life - besides the naive dream where you magically rise up because of your avoidance of building credit?

[Turf1600]

Heeter - bank statement time. Let's see whatcha got. lol

[rwh11385]

Why? All my money (and Sallie Mae's, Purdue's, a corporation's scholarship, and a student organization's scholarship) goes towards the ROI on me, not into a bank account earning minimal interest, if any.

Resorting to that question simply means you have completely been annihilated on all other fronts are desperate for some small victory in the debate.

[Rigmaster]

It's funny to me watching you all knowing 20-somethings debate the ins and outs of financial well-being.


What keeps coming back is the belief that all of this is black and white, all or nothing.

No one said that rich people don't use credit cards, to infer that from RK's post is lame.

No one said that credit cards are baaaaaaaaad, and that they have no practical use.

The reality is that it has become the American way of life to live beyond your means, and that alot of people do so by using credit cards to buy the things that they *must* have.....that is until they find the next thing that they cannot live without. Some people seem to think that they *need* a new car every 2 years or their neighbors will laugh at them behind their backs.

Hell, I'm glad people are trading in their 2004 M3 for 2007 335i's- it means that I'll be able to buy one in a few years for 30-50% of original sticker. I can afford to buy a new car, but I damn sure don't plan on ever doing so. If it comes time when I need something "new", I'll buy a 1 year old car and let someone else take the first year depreciation hit.


Good luck to all you broke ass baggy pants college kids in the coming years, seems you're gonna need it in more ways than one.

[Farbin Kaiber]

I simply cannot grasp that the mods let this pissing contest go for so long. It's threads like this that supply the outside world with tons of conflicting info.

[Jean]

Heh, I am such a dumb ass for buying a new car every year for the last 3-4 years . Learned from it, not buying a new car until debt is paid off 100% .

MODs- feel free to lock this, it's way overdue.

[rwh11385]

Good luck to all you broke ass baggy pants college kids in the coming years, seems you're gonna need it in more ways than one.

man, you are old. current jeans are fitted, not baggy. :) women's if you are emo

[Rigmaster]

man, you are old. current jeans are fitted, not baggy. :) women's if you are emo

Yep, I AM old.


BTW, where do you get those fitted jeans with the zipper in the rear that you wear?? Just curious, I'd hate to walk in that store by mistake while shopping for my Levi's 501's....




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[Turf1600]

Yep, I AM old.


BTW, where do you get those fitted jeans with the zipper in the rear that you wear?? Just curious, I'd hate to walk in that store by mistake while shopping for my Levi's 501's....




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[Turf1600]

Why? All my money (and Sallie Mae's, Purdue's, a corporation's scholarship, and a student organization's scholarship) goes towards the ROI on me, not into a bank account earning minimal interest, if any.

Resorting to that question simply means you have completely been annihilated on all other fronts are desperate for some small victory in the debate.

Uhh I gave up on this being serious a long time ago