How bad are our debts?

https://securecdn.pymnts.com/wp-content/uploads/2016/05/Americans-Trillions-In-Debt.jpg

This is an extract from my book, The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual to Building Liberating Wealth on a Low to Medium Income.

How bad are our debts?

According to ValuePenguin, the median American household owes $2,300 in credit card debt, while the mean is around $5,700.  The reason for the difference is that the latter measure is pulled higher by a relatively small number of individuals who owe huge amounts.  Forty-one percent of households carry some form of credit card debt.

Curiously, it is the households with the lowest net worth – $0 or negative – that have the highest credit card debts.  These are presumably poor or disorganized people who have borrowed themselves into, or tried to borrow themselves out of, trouble.

The next poorest group, with a net worth of up to $5,000, have the lowest credit card debt, and the amount of debt goes up steadily by each wealth category from there so that the households with the most owing on their credit cards are actually the richest – those with a net worth of over half a million dollars.  Those households with higher incomes also tend to have higher credit card debts[i] – apparently that high income still doesn’t allow them to meet all their wants, so they Read More

Rotten Tomatoes: critics vs audience

https://cdn.vox-cdn.com/thumbor/Q7T2MYNwQ6L_5MZspXcV6O0ek6E=/0x0:2560x1440/1200x800/filters:focal(1076x516:1484x924)/cdn.vox-cdn.com/uploads/chorus_image/image/56442545/rottentomatoes.0.jpg

Bored on lockdown, you look up the reviews for a film you’ve heard about.  The initial screen on Rotten Tomatoes indicates that it’s great, 93%, but experience reminds you that this is just the critics’ score.

You click through to the full page, and the audience score is 14%.

Wha . . . ?

There are various conspiracy theories about this, like how big studios manipulate ratings on YouTube trailers.  But having looked at many examples, the truth seems fairly prosaic.

For the most part, critics are twits.  The dark fear that keeps them tossing and turning between wanks at night is the ever-present possibility that they may be Read More

Good debts vs bad debts

https://loanscanada.ca/wp-content/uploads/2013/09/good_debt_bad_debt-1.png

This is an extract from my book, The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual to Building Liberating Wealth on a Low to Medium Income.

Good Debts and Bad Debts

If you are borrowing to spend on something with no lasting value – a new car, a vacation, or a big night out – that is a bad debt.  If you are borrowing to invest in something that may offer you a long-term financial reward – a home, a business, or skills – then it may qualify as a good investment, one that is rational to take out on your path to financial freedom.

But how can you tell which is which? Read More