It seems like there is no limitation on the number of reminders we receive as to how dangerous a world we live in and the short-comings of mankind. The horrific attacks in Paris in the last couple of days present a harsh reminder that beyond our financial misdeeds, the world we live in is fraught with evil. There are many days where it seems like progress, in the context of humanity, does not exist. Let’s hope 2015 gains some positive traction.
On the financial end– no good news is left without bad news. Today’s economic headline was that job growth in 2014 was the best year since 1999. At the same time on The Wall Street Journal online section of the Economy, the lead story on the jobs growth noted that “Over the past year, hourly earnings are up a mere 1.7%, barely ahead of inflation’s 1.3%.” Another report in the Journal today is that, of car loans made in the last year, borrowers are missing payments at the highest rate since the recession. The delinquency rate was 2.6%. In 2008, when trouble arose, the delinquency rate rose above 3%. These facts tell us something: Everything is not so rosy out there! If the future trend is a return to easy credit, low down payment requirements for mortgage loans and excessive interest charges on consumer debt, then we will repeat the pain experienced in 2009-2012.
What does all this mean to you? It depends. In my view, your goal should be to have zero credit card debt. A mortgage at low interest on a house with equity is fine, but if it is still way under water, that’s a problem you should try and address. Car loans are fine– as long as you can afford them. Personally, I think it’s a good thing to have a car in good condition, with moderate miles and no car payment– but that’s a debate I will leave for another day.
Take a simple test. Question #1 – Add up what you are paying on your credit cards each month (without paying them off). If that number is greater than $1,000, ask yourself, “Would I like to put that money in the bank long term, rather than paying it endlessly on credit card debt?” Question #2 – Is the debt on my house or rental property more than 20% than the market value of the property? If you answered “Yes” to either question, here is my suggestion:
Attend our “Fresh Start for 2015 “ FREE Seminar that is coming up next Tuesday, January 13th – and you will learn how to solve those issues. If you answered no to both questions, you’re still invited, but you may find the Elder Seminar – “60++ What You and Your Parents Need to Know and Plan” we have coming up January 29th in Bingham Farms and February 11th is something you might really enjoy. The details on both are below.
And be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!
Have a great week and let’s all hope for a better world,