Why do Americans pretend they're not broke when most Americans are in debt?
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Sorry, I'm dense. For me being in debt and paying off something like a loan on a house has the purpose of paying something you do not have the funds for to pay off in one go. Seeing as the longer you take paying it off, the more you actually pay since rates increase or whatever, depends on contract specififcs.
How is it not a smart thing for you? Is this about US credit rating system or something else.
Edit: thanks to all replies, not gonna spam thank yous to you all. Didn't consider those options.
I'm not who you are responding to, but I'm in the same position.
Interest rate on house mortgage is around 2%, currently looking to invest in an apartment in Europe. The current rates are ~4% here, so it makes more sense to keep the cheap money from the house mortgage than to trade it for more expensive money.
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Sorry, I'm dense. For me being in debt and paying off something like a loan on a house has the purpose of paying something you do not have the funds for to pay off in one go. Seeing as the longer you take paying it off, the more you actually pay since rates increase or whatever, depends on contract specififcs.
How is it not a smart thing for you? Is this about US credit rating system or something else.
Edit: thanks to all replies, not gonna spam thank yous to you all. Didn't consider those options.
I have enough to pay off my house right now but I'm not because the interest rate is both lower than inflation and what I earn from interest, and other invesents, plus the increase in home values. If I paid off the house today then I also wouldn't have as much in my emergency fund. I have 5 years left of the mortgage, I'm paying roughly $50/mo interest which goes down every month.
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Sorry, I'm dense. For me being in debt and paying off something like a loan on a house has the purpose of paying something you do not have the funds for to pay off in one go. Seeing as the longer you take paying it off, the more you actually pay since rates increase or whatever, depends on contract specififcs.
How is it not a smart thing for you? Is this about US credit rating system or something else.
Edit: thanks to all replies, not gonna spam thank yous to you all. Didn't consider those options.
My savings are invested in the stock market, and the returns I get from that are higher than the interest on my mortgage. If I liquidated my investments to pay off the house, the savings from not paying mortgage interest would still be less than what I’d make from the market over the same period. I’d rather use the profits from my investments to cover the mortgage interest - that way I still have money left over. If I did the opposite, I’d lose that extra money.
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My apologies. In my attempt to be horrifically racist, I forgot to also be sexist. It won't happen again.
God damn lazy modern bigots. Back in my day there was a word for people like you, but using it will get me banned on half the fediverse.
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I do, but I bought it used.
I know you're joking but I'd much rather buy a very used house than a house made today. At least in the US seems like houses from 20-40 years ago are solid but everything made in the last 5-10 years absolute paper mache dog shit.
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I mean, it depends on what you mean by that. Anyone who has a credit card is going to have debt, just by virtue of needing to pay the bill.
But if you mean "most Americans have a negative net worth" --- taking into account assets and debts --- most Americans have a positive net worth.
https://www.kiplinger.com/retirement/average-net-worth-by-age-how-do-you-measure-up
The median net worth of all Americans in 2022 was $192,900.
Yeah, but if you were younger than 35 in 2022, your net worth was 39,000 USD. It was already brutal, since society expects people to own, or at least rent, homes in their twenties. Now, I haven't heard about things shaping up for younger people (quite the contrary), Trump's dollars are less biggy and the clocking bomb in the form of inflation, they all paint a gloomy picture.
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I mean, it depends on what you mean by that. Anyone who has a credit card is going to have debt, just by virtue of needing to pay the bill.
But if you mean "most Americans have a negative net worth" --- taking into account assets and debts --- most Americans have a positive net worth.
https://www.kiplinger.com/retirement/average-net-worth-by-age-how-do-you-measure-up
The median net worth of all Americans in 2022 was $192,900.
wrote last edited by [email protected]$192,900
How much of an average little house is that?
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We have a very materialistic and consumeristic culture and we shame the poor.
It's actually curious to read this comment while several others state how they could manage to pay their debt, but they choose to be in debt because it's somehow convenient for them. I believe them, it's just curious because anyone could say the same.
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I had $17k in the 401k when I was laid off from my last job - it had been twice that but there was that big collapse. Raised a lot of kids and couldn't put much away. Always something but never much. That was in my 40s.
I am dug out now, mostly, in my 50s, not to the point I think I'll retire but oh my God when I look at the difference between them and now it's crazy, there is so much more.
I just want to say, don't give up hope. I would never have dreamed that this would turn around and it did. And the kids grew up too.
Oh, sorry, I haven't given up hope. It was sort of said with...a laugh. I do have some investments I've made as of late that are looking like they could pay off big...we'll see. Either way, I still sleep okay at night and I have a roof over my head so I can't complain.
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MSMs propaganda, decades of it, so you wont realize that you are "actually poor" because of the top .05% owners. im simplifying, buts its through various mechanisms, like advertisements, news, politicians.
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No idea who down voted you but holy shit, some people om here resent the idea of having to educate themselves.
Hopefully threat actors but JFC
Do we have a personal finance community on fedi?!
I am sure there is enough middle age cucks here to provide proper info for specific questions.
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My savings are invested in the stock market, and the returns I get from that are higher than the interest on my mortgage. If I liquidated my investments to pay off the house, the savings from not paying mortgage interest would still be less than what I’d make from the market over the same period. I’d rather use the profits from my investments to cover the mortgage interest - that way I still have money left over. If I did the opposite, I’d lose that extra money.
Your personal financial situation is not really representative of the financial situation of Americans in general though.
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Most americans aren't in debt.
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Most americans aren't in debt.
wrote last edited by [email protected]Most americans aren’t in debt.
American household debt is on a relentless upward trajectory. It was at a record $18.20 trillion by 2025, up $4.6 trillion since 2019. With 90% of Americans having some form of debt
https://www.debt.org/faqs/americans-in-debt/demographics/
IDK about US education and math but "most" in the rest of the world means more than 50%.
10% = not good -
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It's just temporary trust me.
Tonight is the night, I'm going to sleep and have
the American Dream 
️ 
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I mean, it depends on what you mean by that. Anyone who has a credit card is going to have debt, just by virtue of needing to pay the bill.
But if you mean "most Americans have a negative net worth" --- taking into account assets and debts --- most Americans have a positive net worth.
https://www.kiplinger.com/retirement/average-net-worth-by-age-how-do-you-measure-up
The median net worth of all Americans in 2022 was $192,900.
Credit cards don't have to mean debt if you pay them off before the intrest applies. That's how you use them responsibly. Many don't.
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Debt is not a broke person thing. Most people you'd consider to be well off have debt.
Americans dont feel broke because they have extremely strong purchasing power.
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My savings are invested in the stock market, and the returns I get from that are higher than the interest on my mortgage. If I liquidated my investments to pay off the house, the savings from not paying mortgage interest would still be less than what I’d make from the market over the same period. I’d rather use the profits from my investments to cover the mortgage interest - that way I still have money left over. If I did the opposite, I’d lose that extra money.
What would happen if stock market dives?
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Your personal financial situation is not really representative of the financial situation of Americans in general though.
No, even regular savings accounts have ~4% interest, so it makes sense for anyone who got a mortgage more than 2-3 years ago when the rates went up. Any extra money shouldn't be going to pay down old debt faster, it should be in savings or other high yield accounts.
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What would happen if stock market dives?
The value of my portfolio dips too, but I don’t actually lose anything unless I sell. I just hold and wait for prices to recover - as they always have so far. In fact, when the market drops I buy even more, because the same money gets me more shares. People don’t lose their savings because of a crash; they lose them because they panic and sell for less than they paid.
