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post #1 of 26 Old 10-14-2004, 9:57 AM Thread Starter
 
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Spending beyond your means

Some economic stats from publications I've read recently:

The US personal savings ratio has declined from 12% in 1982 to 1% now;
Household debt as a % of disposable income has risen from 64% in 1982 to 114% today;
Households' overall financial balance (the difference between gross savings and capital expenditure) has fallen to a record deficit of 3% of US gdp;
The US trade deficit in August widened to $54bn, and for all of 2003 it was $496.5bn.

You guys are buying too many foreign bikes on credit and filling their tanks with too much imported oil.

PS The UK is no better!
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post #2 of 26 Old 10-14-2004, 11:25 AM
 
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Re: Spending beyond your means

Yep. Americans have always been bad. There are lots of reasons that manufacturing goes overseas, we spend more and more. I don't really feel like arguing about oil so I'll leave that alone...

It's seems to be a pandemic. As you say the UK is bad. When I was in Japan, a country notorious for its excellent financial habits, personal savings rates were at their worst in decades.....



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post #3 of 26 Old 10-14-2004, 11:39 AM Thread Starter
 
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Re: Spending beyond your means

Do we all buy on credit these days? In the past, I had always saved before buying a car or bike. House with mortgage, natch, but repaying that over time. Fogeyish behaviour.

Seems like with these stats everyone is buying on credit and never repaying their debt overall.
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post #4 of 26 Old 10-14-2004, 12:07 PM
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Re: Spending beyond your means

My only outstanding debt is my mortgage, which by design would be manageable if I find myself working odd jobs. The 929 is pretty much my only extravagance (though I consider a bike of some kind a necessity ).

And let me tell you it's a lonely lifestyle around here. Most people I talk to about such things think I'm overly conservative.
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post #5 of 26 Old 10-14-2004, 12:37 PM
 
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Re: Spending beyond your means

Plucked down cash for the RR, the dealer kind of freaked. Although there is a trend over here to be debt free that I think is becoming more fashionable so maybe there is hope.

Must obey the sheep dog
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post #6 of 26 Old 10-14-2004, 2:25 PM
 
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Re: Spending beyond your means

I for one am one of those people that are overly financed. The dilemma I was faced w/ is this.

1. New-ish out of college. My wife and I both make good money. Neighther of us really had much of anything.
2. Interest rates were/are so freaking low!!!
3. Buy now and go deep into debt vs. buy later and pay higher interest rates and therefore more in the long run.

Furthermore, and let's call this:

4. I can save and get about 2% on my investments. Screw that.

Now I'm at another impasse. Do I save less and pay off my debt, or do I continue slowly paying down the debt and slowly consistantly invest and save, build up a nest egg and pray that the market comes back?

I'm a "middle of the road" kind of guy, so I'm moving my debts to "good debts" and not putting all my eggs in one basket. I'm paying my debts (a little extra at a time) and continuing to save and (get crappy returns) right now.

HD
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post #7 of 26 Old 10-14-2004, 2:28 PM
 
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Re: Spending beyond your means

Quote:
Originally Posted by oldfogey
Some economic stats from publications I've read recently:

The US personal savings ratio has declined from 12% in 1982 to 1% now;
Household debt as a % of disposable income has risen from 64% in 1982 to 114% today;
Households' overall financial balance (the difference between gross savings and capital expenditure) has fallen to a record deficit of 3% of US gdp;
The US trade deficit in August widened to $54bn, and for all of 2003 it was $496.5bn.

You guys are buying too many foreign bikes on credit and filling their tanks with too much imported oil.

PS The UK is no better!
Interesting numbers....but what do they mean....

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post #8 of 26 Old 10-14-2004, 2:29 PM
 
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Re: Spending beyond your means

Quote:
Originally Posted by Heavy-Dee
I for one am one of those people that are overly financed. The dilemma I was faced w/ is this.

1. New-ish out of college. My wife and I both make good money. Neighther of us really had much of anything.
2. Interest rates were/are so freaking low!!!
3. Buy now and go deep into debt vs. buy later and pay higher interest rates and therefore more in the long run.

Furthermore, and let's call this:

4. I can save and get about 2% on my investments. Screw that.
HD
To each his own but owing nothing feels sweeeet! Plus you are not factoring in risk. Also pay now low rate, pay later high rate, payoff now no rate

Edit: I am sure you have seen the poor souls that are out of work on the site. Now would you rather be unemployed with no house payment or with a paid for house? Extrapolate this to all other payments.

Must obey the sheep dog

Last edited by sheepofblue; 10-14-2004 at 2:31 PM.
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post #9 of 26 Old 10-14-2004, 2:51 PM
 
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Re: Spending beyond your means

Quote:
Originally Posted by sheepofblue
To each his own but owing nothing feels sweeeet! Plus you are not factoring in risk. Also pay now low rate, pay later high rate, payoff now no rate

Edit: I am sure you have seen the poor souls that are out of work on the site. Now would you rather be unemployed with no house payment or with a paid for house? Extrapolate this to all other payments.

i don't disagree. However, our jobs are stable and I'm hell bent to make the most of my 20's. Extrapolate that!
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post #10 of 26 Old 10-14-2004, 3:10 PM
 
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Re: Spending beyond your means

Quote:
Originally Posted by Heavy-Dee
i don't disagree. However, our jobs are stable and I'm hell bent to make the most of my 20's. Extrapolate that!
Just a heads up from an old sheep no job is secure or all jobs are. But you seldom know in advance.

But either way good luck and with hard work you both will be fine.

Must obey the sheep dog
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post #11 of 26 Old 10-14-2004, 3:29 PM
 
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Re: Spending beyond your means

I was in the overfinanced group as well, still am but I'm making my way out of it. No major purchases until most of my debt is cleared 'cuz monthlhy payments suck!
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post #12 of 26 Old 10-14-2004, 4:15 PM
 
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Re: Spending beyond your means

Quote:
Originally Posted by sheepofblue
Just a heads up from an old sheep no job is secure or all jobs are. But you seldom know in advance.

But either way good luck and with hard work you both will be fine.

government jobs are
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post #13 of 26 Old 10-14-2004, 4:23 PM
 
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Re: Spending beyond your means

OK enough from me, think I will go back to plotting rides and chasing memory leaks

Must obey the sheep dog
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post #14 of 26 Old 10-14-2004, 5:20 PM
 
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Re: Spending beyond your means

I survived my first year of (big bike) racing without any debt! YAY! But then again I was eating sack lunches and not spending money on anything else....and I didn't crash all year. Friends of mine that crashed a couple times this year are heavy in debt.

I don't think I could afford to race if I crashed regularly.

To the optimist, the glass is half full. To the pessimist, the glass is half empty. To the engineer, the glass is twice as big as it needs to be.
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post #15 of 26 Old 10-14-2004, 5:41 PM
 
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Re: Spending beyond your means

Quote:
Originally Posted by oldfogey
You guys are buying too many foreign bikes on credit and filling their tanks with too much imported oil.
OK, I didn't touch this earlier, but now I'm awake and in a better mood so now I won't rant.

China imports more energy than the US. Carry on.



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