[roenxi]

If you want to imagine we are all born with a 'debt' then you should also assume we are born with an 'asset'. They should be workign to put that on paper faster than the debt.

As a personal choice, I don't accept any excuse for taking on debt to fund a lifestyle. It is just not a good idea.

I've talked to people who come up with these crazy justifications in their 20s why spending money now is more important than spending money later; I don't know why it is so hard to accept that these decisions have a 20 year time horizons and that they are going to live to be 75. The averages are pretty clear, if you prioritise financial security above incidental expenses you can have both.

Expensive experiences are not worth more than financial security, they don't meaningfully contribute to people's lives or happiness. You can be just as happy playing sports with locals to meet new people as traveling to exotic locations to gawp at nice architecture and meet new people. In 10 years you won't notice if you cooked your own food or had someone else do it for you. An expensive car will not bring a normal person good luck. You can live in a couple of different houses over a lifetime and save much money with little downside.

The pleasure of a purchase is not an urgent need.

[perl4ever]

"If you want to imagine we are all born with a 'debt' then you should also assume we are born with an 'asset'. They should be workign to put that on paper faster than the debt."

If you take your salary and divide it by a reasonable interest rate, then you get the value of yourself as an asset, or the equivalent amount of capital you would need not to work. It is a large amount if you choose a realistic interest rate.

So, sure, a few hundred thousand in debt for school or a house is not such a big deal when you consider that an ordinary salary is equivalent to a million or two in capital.

The issue is cash flow, which seems to be what you are acknowledging, so how do you get to a fanatical anti-debt stance?

[roenxi]

Maybe I didn't emphasis it enough; the key part is on the second line where I said "taking on debt to fund a lifestyle".

I spun a off topic; nickelcitymario's original scenario riled me up. It compared someone with a steady income to someone without an income and concluded that the person with an income had a financial edge because they had debts - that isn't right, the person with the income is ahead because they have an income.

A mortgage, car payments and student loans are luxuries that are not required to make an income; and the people I know with those things tend not to be using them to make money but rather to fund a lifestyle (for reference, I think the wealthiest set of friends I have are not university educated, buy second hand cars and rent - very relaxed lifestyle).

It is a common trope that people misjudge debt, take on too much, turn themselves into debt slaves and then suffer. They misjudge the situation and charge in when they are young and haven't really had time to learn about what makes a person happy. It is annoying that people keep downplaying the costs and risks of debt - it is an expensive, usually long term commitment and it results in ordinary people having less wealth. Wealth is hugely beneficial in strategic and tactical terms.

[nickelcitymario]

Didn’t notice this conversation take off.

Just to be clear, I wasn’t saying Marc was better off because of debt. I was saying he was better off despite having debt. I was responding to the specific idea that Americans are poorer than people in other countries because they have more debt. My point was it’s entirely possible (and common) to be better off despite having a negative net worth.

Others spoke to this better than me, though, when discussing cash flow and the like...