[miningape]

You'd be surprised what lifestyle creep does to people. Often people don't pay off their debts and instead scale their debts to their new income - it's stupid I know.

I agree they should be in a better position because of their income, and I'd say more than an average amount are. But there are still a lot of people in that bracket who absolutely would have the floor pulled out from under them.

People are often caught with their pants down assuming the good times will keep rolling. And even when they see the market downturn or have a generous severance, it still can be very difficult to scrape together the 6+ months emergency fund required on short notice.

[whatshisface]

Depending on the resale value of what the debt is for (homes mainly) maintaining your leverage ratio can work out great for you. Mortgages are the only way most people are able to invest with leverage and the source of a lot of generational wealth.

[miningape]

That's true, but if you over-leverage yourself and the market goes through a downturn it can spell financial ruin. It's not something to lightly do without the cashflow/assets to back up your financial knowledge - which most people don't have.

[from-nibly]

You should only leverage what you are OK with losing entirely. Most people should not be leveraging their only home as investments. We are heading into some rough times and people will find out about that.