More Consumers Find Themselves 'Upside Down' On Trade-Ins

30 minutes ago, William Maley said:

I should have a bit clearer on my comment. If a fix ever gets approved, it will likely be for the newer models.

There is a third option, let us not forget. You skip taking the settlement and keep driving the vehicle. I'm not sure many are taking this option.

It would be hard to do so given the money involved.  Also, there is the unicorn factor.  I remember my grandfathers...one complained about parts and service for a Hudson when Hudson went belly up, one complained about parts for a Studebaker.

And a 1950's Hudson or Studebaker is orders of magnitude more simple than a modern TDI....there will be very few common rail vW TDI vehicles on the road in the USA when this is over with.

I would bring back saving money.

And then I'd bring back something a hell of a lot worse, than saving money.

50 minutes ago, Suaviloquent said:

I would bring back saving money.

 

And then I'd bring back something a hell of a lot worse, than saving money.

My children's friends are very, very financially responsible.  All of them have paid cash for older used cars that have been sane purchases.

6 hours ago, Frisky Dingo said:

 

A 5 grand retail car can very easily depreciate to a $1,000 car in less than 3 years. 

Yes.. As I have said before... I kno people who have bought the segment leader S550 4Matic in 2014 for $98K.. check the book on it now at just 36K miles and U will find that it is now worth about $54K

Just now, Cmicasa the Great said:

Yes.. As I have said before... I kno people who have bought the segment leader S550 4Matic in 2014 for $98K.. check the book on it now at just 36K miles and U will find that it is now worth about $54K

Luxury cars depreciate horribly....

Just now, A Horse With No Name said:

Luxury cars depreciate horribly....

Yes.. but the problem is that most consumers only hear about the domestic luxo (Cadillac) having this problem.. worse yet is that their depreciation by percentage isn't even as bad as the Europeans

Just now, Cmicasa the Great said:

Yes.. but the problem is that most consumers only hear about the domestic luxo (Cadillac) having this problem.. worse yet is that their depreciation by percentage isn't even as bad as the Europeans

I see a lot of cars go through auction because I know people in the industry and live near the Ohio auto auction, a huge auction site here in Columbus.

Cadillac does MUCH better than the Europeans...people are genuinely MUCH more afraid of European cars and their issues...with damn good reason....

Based on what I've seen, the very initial hit is worse on Cadillacs. With cars, anyway. About 3-4 years in, however, they've leveled out and aren't as severe as many European offerings.

6 minutes ago, Frisky Dingo said:

Based on what I've seen, the very initial hit is worse on Cadillacs. With cars, anyway. About 3-4 years in, however, they've leveled out and aren't as severe as many European offerings.

Cadillac is still fighting its demons, but at least it is putting up a fight....

Whatever the case may be...

As we all know, cars more often than not, are a depreciating asset.

When I went to school, in high school even...high school accounting economics class taught us to amortize depreciating assets...

People today dont amortize their stuff properly and its MANDATORY to do it right on cars....

Meaning....

The first step is to not buy toooooo much car than needed or afforded

The second step is to buy second hand if new is not feasible.

The third step is to NEVER EXCEED A MONTH LOAN MORE THAN 48 months.......

And if possible, take advantage of 0.9% or 1.9% financing...

The forth step is to keep that car up until it dies

The fifth step is to properly maintain the car

The sixth step is to keep in mind that cars need fixin and that means it takes  money

The seventh step is to NOT buy other junk when you are tight with money such as upgrading your cell phone every 6 months and to buy the latest fashion trends and to continually buy 6 dollar lattes at Starbucks...

Meaning...

Dont buy/lease Impala when Cruze is what could be afforded. And even then, buy Sonic if even a Cruze is toooo much car...

Cruze and Sonic too small?

Then a USED Impala should do....

OK....there are MANY options today, no need to buy Impala when specials on Accord is available or to even buy used when sooooo many cars from sooooo many manufactures exist but then again, the used  car market is flooded and so forth and so forth....

Bottom line is:

People dont AMORTIZE PROPERLY ANYMORE....

THEREFORE, I might sound self righteous...but I amortize properly.

Back in 2007....I owned 2 restaurants....

In 2005 I bought a $40 000 CDN Impala SS.

In 2007, I bought a 32 000 Ford Edge base model.

In 2009, the current restaurant I own helped in keeping the other restaurant afloat. It was bleeding money and the 1st restaurant's profits were used to pay the 2nd restaurant's bills.

I couldnt afford the 2007 Ford Edge.

I downsized to a 2009 Mazda 3 base model.

I did not have time to amortize the Edge properly but I had put a substantial down payment on it and when I traded it in for the Mazda, all I did was lower my payments to 200 dollars less per month, increased my loan to just 6 months more  than I would have for the Edge, and at that....the loan for the Edge was just a 48 month loan....

People are dumb with their money and they make dumb decisions with their money and while we could blame Corporations and banks that make it all too easy for the fools to part with their money, the REAL problem concerning this upside down thing rest SOLELY on the CONSUMER.

Yes yes.

Life happens and sometimes we have NO CHOICE to end up upside down....

I aint talking about THAT situation....

I am talking about when people DECIDE ALL BY THEMSELVES TO NOT AMORTIZE their purchases properly.....

And in 2016, there are a shtye load of people in that category...

Well said Olds....but what you are talking about takes self discipline...something in wildly short supply these days....

This is the state of new car lease/financing with a prolonged period of low interest rates.

Yeah, another gut wrenching pot thickener. 

41 minutes ago, Suaviloquent said:

This is the state of new car lease/financing with a prolonged period of low interest rates.

 

Yeah, another gut wrenching pot thickener. 

All of the easy fixes such as dropping interest rates have been sued to get things going, and we seem to have a glut of both new and used cars on the market.  Test drove a Cruze Saturday after being offered $50 by a local Chevrolet dealer to come in for a test drive.

They were discounting it by about 4K....Cruze hatch....

Found one in California new discounted 6K on car Gurus....brand new...

Escape, 2016 leftover was like 9 grand off at a local Ford dealer....

When car makers can't drop their pants any more on prices the market might make an uncomfortable adjustment or two.

Yes I am amazed at how deeply Chevrolet is discounting their brand new Cruze, for example.  Is it a sign of a weak product or a weakening market?  Maybe it is a good product overpriced.  They are discounting it to the point of squeezing the Sonic out of ppl's radar.

Yes I've spent a lot of money on vehicles, been lucky enough over time to not be "underwater" on any of them at the time of trade-in.

Yes I am thinking my next one will essentially be a commuter that exceeds at practicality for the dollar spent, which is why I gravitate toward small hatchbacks.  But I won't drive something boring.

I love my truck, I've actually used it as a truck a good bit and not just as a way to get back and forth to work.  I have 32k miles on it now and I believe I owe in the $14-15k bracket on it.  It was $32.5k MSRP new.  Not bad.  Pretty good equity for sure.  If I put a bit down, I could be pretty close to buying a Fit EX manual or the like outright with no payment.  The no payment thing on a brand new vehicle would be something to be thankful for.

1 hour ago, ocnblu said:

Yes I am amazed at how deeply Chevrolet is discounting their brand new Cruze, for example.  Is it a sign of a weak product or a weakening market?  Maybe it is a good product overpriced.  They are discounting it to the point of squeezing the Sonic out of ppl's radar.

 

Yes I've spent a lot of money on vehicles, been lucky enough over time to not be "underwater" on any of them at the time of trade-in.

Yes I am thinking my next one will essentially be a commuter that exceeds at practicality for the dollar spent, which is why I gravitate toward small hatchbacks.  But I won't drive something boring.

I love my truck, I've actually used it as a truck a good bit and not just as a way to get back and forth to work.  I have 32k miles on it now and I believe I owe in the $14-15k bracket on it.  It was $32.5k MSRP new.  Not bad.  Pretty good equity for sure.  If I put a bit down, I could be pretty close to buying a Fit EX manual or the like outright with no payment.  The no payment thing on a brand new vehicle would be something to be thankful for.

You can afford your new cars, no grief from me!

On November 29, 2016 at 9:08 AM, ccap41 said:

These are some wicked exaggerations you have here.. An older 5k car will not depreciate to 1k unless you wreck it. It will likely be worth 3000 at minimum as long as it runs. And inflation has been insane with cars but base prices have not jumped 17% in 3 years time. Usually year to year there is a few hundred bucks inflation for cars in that price category. Not $2,000 a year.

Most people don't sell private party, they trade so that is the real value of your car at any time 

tell me the price of an impala in 2009 and 2016. Same size car v6 you'd buy it in 09 for 19 grand now it's 29 grand. Car prices have gone through the roof. The 36k vs 30k is not an exaggeration.  

15 minutes ago, regfootball said:

Most people don't sell private party, they trade so that is the real value of your car at any time 

tell me the price of an impala in 2009 and 2016. Same size car v6 you'd buy it in 09 for 19 grand now it's 29 grand. Car prices have gone through the roof. The 36k vs 30k is not an exaggeration.  

From what I can see an Impala started at 23,800 in 2009 and worked it's way up over 31K with the SS. Today's Impala starts at 27,300. $3500. Almost like I said, a couple/few hundred bucks per model year.

36-30 isn't an exaggeration but in a THREE year span, it most certainly is.  

1 hour ago, ccap41 said:

From what I can see an Impala started at 23,800 in 2009 and worked it's way up over 31K with the SS. Today's Impala starts at 27,300. $3500. Almost like I said, a couple/few hundred bucks per model year.

36-30 isn't an exaggeration but in a THREE year span, it most certainly is.  

You can't look at sticker. You have to look at prices they are actually selling for. As a whole the entire car market is asking back breaking price increases. 

On November 29, 2016 at 9:59 AM, Frisky Dingo said:

 

Yeah, no. I see cars that run and drive fine all the time that are only worth $1,000. You can probably private party it for 3K or close to, but trade-in? Absolutely it is not not uncommon to see cars worth that little.

 

 

 

 

#1) Yes and no. The problem is that often times even when someone is being mindful of cost, they only look at the immediate savings rather than down the road at total cost of ownership, residual value, etc. People will buy a Dodge or Nissan over a Honda or Subaru to save a few grand up front to get a car with statistically far inferior reliability and resale value. Then, when it's time to trade it in, the car is worth a fraction of what some of their other options would have been. It's poor logic, and many buyers outright refuse to accept it.

 

#2) Yes, and this is almost always their own doing. Pay your bills. It's simple. Pay your bills, and you will have at least decent credit. Enough to buy a good car with a reasonable (6-7%) rate. People just flat out refuse to pay payments- many times small ones like $30-40- and then wonder why they have crappy credit. It's astounding.

 

#3) This one you did nail, and it is a massive problem in it's own right. Wages have been stagnant for a very long time. The cost of goods and living is increasing at an exponentially faster rate that peoples' income. Something will have to give eventually. 

 

#4) This is a good point that hasn't been brought up yet. More and more people are not only not putting money down, but rolling their sales tax into the loan. This should really be avoided. For one, you're going to pay interest on it, making the amount more. The bigger reason is you are already starting yourself out in an even bigger hole in terms of value relative to what you owe.

 

#5) This isn't quite impossible, but it's very, very, very unlikely. It's easily the least significant factor here.

 

#6) Leasing is really an option that should be looked at by more buyers. So many of them are digging themselves an ever-deeper hole by buying, and trading 2-4 years later. Leasing would eliminate so many issues brought up in this thread. Unfortunately, after so many article telling buyers how terrible leases are, and how much advice they've gotten from family and friends about how bad it is, many aren't even open-minded to it. Their loss.

 

#7) This is such a phenomenally good point, and one that people who have high income or old-school thought and buy cars with cash. IT IS JUST NOT FEASIBLE, OR EVEN SMART IN MANY CASES, FOR THE AVERAGE PERSON. Let's just say you're being reasonable and plan to buy a $12,000 car with cash. Rather than going and financing it for $235 a month, you save $300 a month and put back towards it. In the mean time, you have to have transportation somehow. So what?? You pay to ride a bus? You give someone gas money? You continue to drive and maintain that old hooptie? All of those things are taking money away from you, the only difference is- YOU DON'T HAVE A NEW(ER) CAR. It floors me how many people fail to understand this.

 

#8) This is also a very, very good point, and it;s one I've talked about for some time now. Things cannot continue on their current trajectory. That is fact. Something will have to change. If wages don't increase, which is extremely unlikely; and if car prices don't come down, which is just as unlikely; another solution must happen. I think a special class of vehicles that weren't as regulated and had less equipment and far cheaper costs would be a great idea. It would help car sales continue to be strong, and it would place transportation in the hands of many who currently don't have it, or have poor forms of it.

Why does the Mitsubishi Mirage sell so well.   Lol

1 minute ago, regfootball said:

You can't look at sticker. You have to look at prices they are actually selling for. As a whole the entire car market is asking back breaking price increases. 

Just because they're selling at higher prices doesn't mean they have inflated that much. That just means people are adding bullsht options to their cars. People added bullsht options in 2009 as well.

Cars don't depreciate 80% in 3 years when they're brand new, taking the largest hit. Let alone when they're 10 years old aging to 13 years old. (Your $5000 to $1000 example).

I agree that car prices have out paced economical growth and wage increases for far too long for there not to be a big hit at some point but I just think the numbers you used were very exaggerated over the period of time you used (3 years).

Interesting figures, yes a few years old but then history still shows some interesting graphs:

http://www.freeby50.com/2008/11/history-of-new-car-costs-and-average.html

Love this one since is also has wages, homes, as well as cars.

http://www.thepeoplehistory.com/70yearsofpricechange.html

Wages have for sure not kept up with home and car prices. We really need to see a massive correction in the crazy prices things sell for.

Interesting to see the Consumer prices for this year month by month.

http://www.bls.gov/news.release/cpi.nr0.htm

Course seeing the price index from 1913 to 2016 is also impressive.

http://www.inflationdata.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded%3Dtrue?reloaded=true

http://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/

This last link really drives home the point of crazy price increases when you look at the index from 2000 to 2016.

2000 to 2008 we saw our largest increases in prices at a time of diminished wages under the government than. 2008 to 2016 saw wages rise but so did cost of things. We need a much better balance.

8 hours ago, ocnblu said:

Yes I am amazed at how deeply Chevrolet is discounting their brand new Cruze, for example.  Is it a sign of a weak product or a weakening market?  Maybe it is a good product overpriced.  They are discounting it to the point of squeezing the Sonic out of ppl's radar.

 

Yes I've spent a lot of money on vehicles, been lucky enough over time to not be "underwater" on any of them at the time of trade-in.

Yes I am thinking my next one will essentially be a commuter that exceeds at practicality for the dollar spent, which is why I gravitate toward small hatchbacks.  But I won't drive something boring.

I love my truck, I've actually used it as a truck a good bit and not just as a way to get back and forth to work.  I have 32k miles on it now and I believe I owe in the $14-15k bracket on it.  It was $32.5k MSRP new.  Not bad.  Pretty good equity for sure.  If I put a bit down, I could be pretty close to buying a Fit EX manual or the like outright with no payment.  The no payment thing on a brand new vehicle would be something to be thankful for.

 

1. Cruze finally has incentives (didn't back in June when I was choosing between Cruze and Malibu). Thing is Cruze msrp's are ridiculous. Lt's were 24-25k. Premieres almost 30. No sane person would pay that for a Chevy compact. So the discounts now are just trying to find what people will actually pay for a compact car. Sort of old school GM. Rebate the shit out of it. 

2.  Truck market is more forgiving. Used trucks hold value better and if taken care of people will pay more for a good used truck compared to a car. You'll be fine.  

13 hours ago, ocnblu said:

Yes I am amazed at how deeply Chevrolet is discounting their brand new Cruze, for example.  Is it a sign of a weak product or a weakening market?  Maybe it is a good product overpriced.  They are discounting it to the point of squeezing the Sonic out of ppl's radar.

I think it's a sign of an extremely competitive segment. Back before Cruze existed, if you were in this segment you bought a Corolla, Civic, or maybe a Protege/3... and you probably paid pretty close to sticker on it. You only bought a Cobalt or Focus or Elantra if you were price hunting and couldn't afford a better car. These days if the Chevy dealer won't make a deal on a Cruze, then Hyundai, Kia, Honda, Subaru, Ford, Mazda, and Toyota all have perfectly acceptable substitutes. If you're trying to get a car for cheap, then Sentra or Dart or even 200 are available. VW will give you a reach around just for walking in the door. 

The new Cruze is probably the best compact Chevy has ever built and certainly among the leaders in the class.... it's just that the whole class is so good these days that it isn't punishment to pick most any other vehicle on price. 

9 minutes ago, Drew Dowdell said:

VW will give you a reach around just for walking in the door. 

Where's my nearest VDub dealer?!?

10 minutes ago, Drew Dowdell said:

I think it's a sign of an extremely competitive segment. Back before Cruze existed, if you were in this segment you bought a Corolla, Civic, or maybe a Protege/3... and you probably paid pretty close to sticker on it. You only bought a Cobalt or Focus or Elantra if you were price hunting and couldn't afford a better car. These days if the Chevy dealer won't make a deal on a Cruze, then Hyundai, Kia, Honda, Subaru, Ford, Mazda, and Toyota all have perfectly acceptable substitutes. If you're trying to get a car for cheap, then Sentra or Dart or even 200 are available. VW will give you a reach around just for walking in the door. 

The new Cruze is probably the best compact Chevy has ever built and certainly among the leaders in the class.... it's just that the whole class is so good these days that it isn't punishment to pick most any other vehicle on price. 

Cruze is a really fine little car, especially in hatch form

2 minutes ago, ccap41 said:

Where's my nearest VDub dealer?!?

Washing his hand after the reach around....

7 minutes ago, A Horse With No Name said:

Washing his hand after the reach around....

On 11/29/2016 at 10:14 AM, Drew Dowdell said:

My 12 year old Honda CR-V is worth at least $5k in a private sale.  It's paid off too.

Yep....cars are still worth something....

Willing to bet once I update my fleet I could still pull 2.5, 3.5 and 4k private for mine...and also paid for.

I always wondered why people need to have more than one new car anyways...I watch folks with over a grand just in car payments! I figure in our case a new CUV (base model) and a used semi-compact car  should cost less than half of that.....

19 hours ago, ocnblu said:

Yes I am amazed at how deeply Chevrolet is discounting their brand new Cruze, for example.  Is it a sign of a weak product or a weakening market?  Maybe it is a good product overpriced.  They are discounting it to the point of squeezing the Sonic out of ppl's radar.

 

Yes I've spent a lot of money on vehicles, been lucky enough over time to not be "underwater" on any of them at the time of trade-in.

Yes I am thinking my next one will essentially be a commuter that exceeds at practicality for the dollar spent, which is why I gravitate toward small hatchbacks.  But I won't drive something boring.

I love my truck, I've actually used it as a truck a good bit and not just as a way to get back and forth to work.  I have 32k miles on it now and I believe I owe in the $14-15k bracket on it.  It was $32.5k MSRP new.  Not bad.  Pretty good equity for sure.  If I put a bit down, I could be pretty close to buying a Fit EX manual or the like outright with no payment.  The no payment thing on a brand new vehicle would be something to be thankful for.

 

That was GM's fault...3 shifts at L town, and lets bring some up from Mexico...equals a serious glut of them. Added to the fact that compact sales are down (everyone is buying CUV/SUV) means some good deals. Not Cavalier good deals, but some nice discounts. 

If I choose to go the small car route instead of the CUV one, there's a good chance it will be a Cruze then...

8 hours ago, daves87rs said:

That was GM's fault...3 shifts at L town, and lets bring some up from Mexico...equals a serious glut of them. Added to the fact that compact sales are down (everyone is buying CUV/SUV) means some good deals. Not Cavalier good deals, but some nice discounts. 

If I choose to go the small car route instead of the CUV one, there's a good chance it will be a Cruze then...

I am thinking fo doing a write up of the test drive my wife and I took in one.  Quite the nice little car, actually.

GM is learning better how to manage supply, but they still have a way to go to catch Honda and some other car makers.

12 hours ago, A Horse With No Name said:

I am thinking fo doing a write up of the test drive my wife and I took in one.  Quite the nice little car, actually.

GM is learning better how to manage supply, but they still have a way to go to catch Honda and some other car makers.

Yeah, I have been in one, just no test drive...yet!

And some folks at GM need to still learn how to forecast...it's just not smart to add a 3rd shift and add production from Mexico...they should have known stock would have evened out not too far down the road....

smart spenders, then, 

and smaller GM car fans like blu

Apparently Sonics and Sparks are 20% off MSRP now??????  New sparks for like 11 grand.  Now that is fiscally sound.

http://www.chevrolet.com/sales.html

hows about this lil popper?

http://www.chevrolet.com/sonic-small-car/locate.html#/vehicle-details?vin=1G1JC6SB1H4124983

http://cgi.chevrolet.com/mmgprod-us/dynres/prove/image.gen?i=2017/1JV48/1JV48__1SC/GGQ_gmds2.jpg&v=deg01&std=true&country=US&send404=true

http://cgi.chevrolet.com/mmgprod-us/dynres/prove/imageinterior.gen?i=2017/1JV48/1JV48__1SC/ACB_gmds2.jpg&v=deg01&std=true&country=US&send404=true

Sweet!  I just wish there were more cars on the ground in my urrea to choose from.  Spark LS manual in Splash for $11k though... hard to beat, and it's close by!

1 hour ago, ocnblu said:

Sweet!  I just wish there were more cars on the ground in my urrea to choose from.  Spark LS manual in Splash for $11k though... hard to beat, and it's close by!

And I think give it a year or two and you will find very good deals on gently sued Cruze models with the hatch....

On 11/29/2016 at 8:36 AM, hyperv6 said:

FYI just find out what people owe on Credit cards and you will see how poorly many manage money. Much of this is due tot he instant gratifications of buying things. When I point the finger the thumb is pointing back at me too as I have it like most others.

we all spoke at work once about how much people owed and it was amazing many could sleep as bankruptcy was not a possibility it was a future reality.

This is true. I was having this conversation the other day with a group I co-host on Money Management. I changed it up a bit when I told them that monthly I run about $10K in CC debt (some company some personal)... simply because I hate pulling out cash. If I paid the minimum I'd be sitting somewhere with a gun in my mouth. No matter what the balance.. its $0 at 10 days before the bill is due. 

16 minutes ago, Cmicasa the Great said:

This is true. I was having this conversation the other day with a group I co-host on Money Management. I changed it up a bit when I told them that monthly I run about $10K in CC debt (some company some personal)... simply because I hate pulling out cash. If I paid the minimum I'd be sitting somewhere with a gun in my mouth. No matter what the balance.. its $0 at 10 days before the bill is due. 

You have a higher income and higher expenses than most here, this is actually highly rational.

17 minutes ago, A Horse With No Name said:

You have a higher income and higher expenses than most here, this is actually highly rational.

But some in that meeting actually tried to argue that I shouldn't use my CCs at all.. I told them it was a wash.. and in my case better because that's $10K per month actually gaining interest or being invested that if I otherwise pulled from ATM or Debit.. wouldn't be.

3 minutes ago, Cmicasa the Great said:

But some in that meeting actually tried to argue that I shouldn't use my CCs at all.. I told them it was a wash.. and in my case better because that's $10K per month actually gaining interest or being invested that if I otherwise pulled from ATM or Debit.. wouldn't be.

No different than me using a credit card to buy a $350 router for my woodworking shop in my garage and paying it off at the end of the month.  credit cards are like that Router...a tool to use....

Use either a woodworking router or a credit card improperly though and you will get hurt, physically or financially.

2 minutes ago, A Horse With No Name said:

No different than me using a credit card to buy a $350 router for my woodworking shop in my garage and paying it off at the end of the month.  credit cards are like that Router...a tool to use....

Use either a woodworking router or a credit card improperly though and you will get hurt, physically or financially.

Absolutely. The discipline is what save U

2 minutes ago, Cmicasa the Great said:

But some in that meeting actually tried to argue that I shouldn't use my CCs at all.. I told them it was a wash.. and in my case better because that's $10K per month actually gaining interest or being invested that if I otherwise pulled from ATM or Debit.. wouldn't be.

Totally agree here, one must pay one self first. CC is to be used to cover expenses as long as one can pay it off and manage their money. This way you can optimize the investing side, rewards side and manage all bills no matter what your paycheck payout by your company is.

Today's millennials to generation X, those in their 40-50's have poor money management skills and this comes from parents and the schools that have removed home ec class where they used to teach money management. Plus the total self instant gratification just makes me shake my head.

Amazing how many people thing no big deal of carrying a ton of credit card debt with the attitude of everyone has debt. No big deal I will die with debt so why worry about if it is paid off or not.

1 minute ago, dfelt said:

Totally agree here, one must pay one self first. CC is to be used to cover expenses as long as one can pay it off and manage their money. This way you can optimize the investing side, rewards side and manage all bills no matter what your paycheck payout by your company is.

Today's millennials to generation X, those in their 40-50's have poor money management skills and this comes from parents and the schools that have removed home ec class where they used to teach money management. Plus the total self instant gratification just makes me shake my head.

Amazing how many people thing no big deal of carrying a ton of credit card debt with the attitude of everyone has debt. No big deal I will die with debt so why worry about if it is paid off or not.

I live really damned well on what other people in my income bracket spend on credit card bills....steak dinner this weekend...you betcha...plenty of cash....not going to Chase!

My children and their friends have adopted the same mentality.  Not all millennials are sloppy financially.

16 minutes ago, A Horse With No Name said:

I live really damned well on what other people in my income bracket spend on credit card bills....steak dinner this weekend...you betcha...plenty of cash....not going to Chase!

My children and their friends have adopted the same mentality.  Not all millennials are sloppy financially.

True, there are those that show great fiscal responsibility. Sadly the bulk do not and that is where America will Fail Again. Too many greedy instant gratification people.

I see this every day in the amount of auto's that people drive to their electronic toys they must have and yet I question just how much of it is really needed.

Upside down on auto's is at a point that we now have stories on how to get into a new auto when you still owe more than the old one is worth.

http://www.cbsnews.com/news/need-a-new-car-but-still-owe-more-on-yours-than-its-worth/

This story covers the truth of this upside down mess.

http://www.usatoday.com/story/money/cars/2016/11/27/record-number-car-buyers-upside-down-trade-ins/94506786/

The USA Today story just confirms this thread and has many scary facts about where we are going.

http://www.nytimes.com/2016/11/19/your-money/how-to-buy-a-car-when-you-have-an-upside-down-loan.html?_r=0

This story does not help as it comes across as embracing debt and going deeper.

Sad times on one hand we live in, yet very exciting times also for the EV future of the Auto Industry.

Job report is out, we are at a 9 year low and one of the best rates since 2000. Guess some things came out good about the last 8 years.

7 minutes ago, dfelt said:

Job report is out, we are at a 9 year low and one of the best rates since 2000. Guess some things came out good about the last 8 years.

No one who si sane wants to go back to the mess we had in the fall of 2008...

2 hours ago, Cmicasa the Great said:

This is true. I was having this conversation the other day with a group I co-host on Money Management. I changed it up a bit when I told them that monthly I run about $10K in CC debt (some company some personal)... simply because I hate pulling out cash. If I paid the minimum I'd be sitting somewhere with a gun in my mouth. No matter what the balance.. its $0 at 10 days before the bill is due. 

Your eyes would bust out of your head if you see what I run, but I have so much total revolving credit (over 6 figures) that I'm never using more than half of it. However, nearly all of that is at zero percent interest and it is being used to fund real estate investments. When the 0% is up, I have so much room in other places that I just move it around.  I'm not a flipper. I buy cheap, renovate, rent out, then refinance with cash out.

53 minutes ago, Drew Dowdell said:

 

Your eyes would bust out of your head if you see what I run, but I have so much total revolving credit (over 6 figures) that I'm never using more than half of it. However, nearly all of that is at zero percent interest and it is being used to fund real estate investments. When the 0% is up, I have so much room in other places that I just move it around.  I'm not a flipper. I buy cheap, renovate, rent out, then refinance with cash out.

Again, you are running a business....

3 hours ago, Cmicasa the Great said:

This is true. I was having this conversation the other day with a group I co-host on Money Management. I changed it up a bit when I told them that monthly I run about $10K in CC debt (some company some personal)... simply because I hate pulling out cash. If I paid the minimum I'd be sitting somewhere with a gun in my mouth. No matter what the balance.. its $0 at 10 days before the bill is due. 

I have sat with co workers that own $25K or more on credit cards and no way to pay it off.

Some have school debts on degrees they can not get a job to pay for it. One woman went to Mount Union for an Art Degree. Today she works as a translator and makes good money but not enough to pay off her school debts since it was a very expensive school.

People in general are poor at saving money and are poor on living in their means.

I see it happen every summer many can work a ton of Overtime. In place of saving it they spend it and when the Overtime dries they find it hard to live as they expanded their living to a level from their normal income.

Now keep in mind these are well paid jobs and employees. Now you take this to the people who are not making the money and they still have to have the new I Phone 7 and 70" TV. Yet they do not own a home and have a car with 150K miles on it and 3.7 kids.

Too often in life you have one shot to get ahead and if you squander it you will never get it back.

One political party is pushing to the people to let us help and we can write off your school debts and let us raise the min wage but yet people are no better off and the cost of everything just goes up so the new income levels are still not enough. You can give free collage but you will pay more tax. You can raise min wage but you will pay more for all you use in life.

We need to focus on teaching people how to be responsible with their money and work to teach them you do not need to go to Yale to make Six Figures.  Today the skill trades have too few people and there is a ton of money to be made if you work on these skills.

My Father in-law is one of the best welders you can find. he is retired and living well. He made 6 figures a year welding as the company could not find anyone who could do what he did. He also has been called many times since retirement to so special jobs for them as they can not replace him.

Life is what you make of it. You need to pursue opportunity and if you fail you never give up. 

I was blessed with parents that taught me how to be fiscally responsible and how to invest. I wish I had done more but I have done well.

Credit is just too easy to get and people are so weak to take it. While some want to blame business the fact is no one held a gun on these folks when they signed the papers. Bad deals are all around. Rent to own is one of the worst but no one is holding a gun on these people and a little simple math would tell them it is a bad deal.

7 minutes ago, hyperv6 said:

One political party is pushing to the people to let us help and we can write off your school debts and let us raise the min wage but yet people are no better off and the cost of everything just goes up so the new income levels are still not enough. You can give free collage but you will pay more tax. You can raise min wage but you will pay more for all you use in life.

We need to focus on teaching people how to be responsible with their money and work to teach them you do not need to go to Yale to make Six Figures.  Today the skill trades have too few people and there is a ton of money to be made if you work on these skills.

+ Freakin One.

@hyperv6

Well said my friend. This should be a basic 101 for everyone in 9th - 12th grade so they can hopefully learn from the errors of past adults and get the education they need to work and dig a deep hole that burdens them for life with debt.

I went to an inexpensive PA state university for a degree in Management and Information Technology. My great grandfather paid for 1/3rd, my parents paid for 1/3, and I did student loans on the rest. Those were paid off so long ago I couldn't even tell you what year it was I did so.  Cars are one area where I might splurge a little on credit (even then I'm a deal hunter) but I can do so because I've been careful in other areas.  My house was also inexpensive and I've lived here 15 years now, so it's half paid off. My mortgage is lower than some people's SUV leases.

A lot of it is just self control. The last new gaming system I own is an 8bit NES, I was 8 when I got that. Ive only ever owned one flat screen TV. I just bought my 3rd new laptop ever (and first in 6 years). I've traveled all over the US and Europe, but it's mostly paid for with airline miles and hotel points earned through work. I vacation in Europe for 2 weeks for less than some people spend on weekends at the beach.

At the same time, I'd never consider myself rich. I still have money concerns. I'm building two businesses at the same time while still holding down a full time job. It's a lot of work.

43 minutes ago, ccap41 said:

+ Freakin One.

Ohh absolutely....the son of the owner of a restaurant I love to go to got a degree in computer science, has not been able to find work for a year and a half. Offered to help get the kid into the electrical apprenticeship or the HVAC apprenticeship, kid sits at home and wants nothing to do with working with his hands.

I could see the government paying talented peoples tuition for the hard sciences where we need talented people, but at the same time, we have a glut of people getting degrees in theater and art therapy.

Explained to a student yesterday that getting a masters in political science after getting a bachelors in political science was an excellent way to be unemployable with even more student debt...was not what she wanted to hear.

We have two cultural biases in our country that are killing us, our anti intellectual anti science bias, and our anti blue collar anti working with your hands bias.

Our anti working with your hands/blue collar bias is the result of public school indoctrination into the virtues of white collar careers, and our anti intellectual bias is the result of our horrid media.  Both need to go.

14 minutes ago, Drew Dowdell said:

I went to an inexpensive PA state university for a degree in Management and Information Technology. My great grandfather paid for 1/3rd, my parents paid for 1/3, and I did student loans on the rest. Those were paid off so long ago I couldn't even tell you what year it was I did so.  Cars are one area where I might splurge a little on credit (even then I'm a deal hunter) but I can do so because I've been careful in other areas.  My house was also inexpensive and I've lived here 15 years now, so it's half paid off. My mortgage is lower than some people's SUV leases.

A lot of it is just self control. The last new gaming system I own is an 8bit NES, I was 8 when I got that. Ive only ever owned one flat screen TV. I just bought my 3rd new laptop ever (and first in 6 years). I've traveled all over the US and Europe, but it's mostly paid for with airline miles and hotel points earned through work. I vacation in Europe for 2 weeks for less than some people spend on weekends at the beach.

At the same time, I'd never consider myself rich. I still have money concerns. I'm building two businesses at the same time while still holding down a full time job. It's a lot of work.

Yes, but in this country you can make it if you want to...sons girlfriends parents arrived nearly penniless as immigrants, have built a couple of businesses, and are now worth serious coin.

We need to adequately fund state universities and encourage people to go to them and get degrees in technical fields, IMHO.

56 minutes ago, dfelt said:

@hyperv6

Well said my friend. This should be a basic 101 for everyone in 9th - 12th grade so they can hopefully learn from the errors of past adults and get the education they need to work and dig a deep hole that burdens them for life with debt.

....and keep people from moving back in with mom and dad when they turn 26....