Ask Lemmy

Because we want to spend our end of days in comfort

In debt doesn’t mean broke. People with a mortgage that they are easily paying off have debt. Millionaires and billionaires have millions and billions in debt. Debt itself isn’t bad. Debt can be good.

who's pretending they aren't broke?

Debt, used properly, makes you wealthy. Every billionaire you know has debt because of the advantages.

I grew up middle class. To afford my prestigeous university, I took out debt (before grant only financial aid). The value of my education allowed me to earn a higher salary to pay it off in two years. I kept earning that salary and more after the debt was paid. It had a high present value.

I bought my latest house four years ago. Mortgage rates were so low I decided to finance part of it at 2% even though I had the cash. I now earn 4.5% in money markets. After taxes, I earn 0.72% every year not to pay off my mortgage. With $350,000 remaining, this is an extra $2,500/year right now.

I shop with credit cards that give me 2-5% back on purchases. I pay off my balance every month and have never paid one penny in interest or penalties in over a decade. My credit cards therefore pay ~$1,500/year tax free.

Larry Ellison likes controlling Oracle and being a billionaire. Rather than selling stock of Oracle to fund his lifestyle, he instead borrows against the value of the stock. As Oracle appreciated, he got to keep the gains he doesn't trigger capital gains taxes.

Most Americans do live paycheck to paycheck. They live at the ragged edge of their means and remain ignorant of finance. However, this is a global phenomenon. The difference is that much of the United States tax code is set up to benefit the wealthy. Adopt their habits and your wealth starts to snowball.

While I have no debts, sometimes my bank account is hovering at a $200. I hate the insecurity it gives me.

That's called Modern Monetary Theory. It's a fun game until the underlying physics of our little civilizational project fails, that is to say the energy return on pumping oil out of the ground.

I know that I'm broke and I'll be working until I either go senile or die. It took me too long to start figuring things out.

We have a very materialistic and consumeristic culture and we shame the poor.

I don't know anyone pretending they aren't broke in America...I know a lot of good people struggling paycheck to paycheck and that's it. I love how Lemmy has become this echo chamber of hate for Americans when y'all are just as fucked in Europe and other countries too with so many similar or different issues. Imagine a little compassion for all people rather than assuming "America bad because America". Just so incredibly sad and stupid to see how dumb so many people are.. that kind of thought process is exactly the same type of people that vote for trump that have this same attitude about "insert race or country here". Y'all need a reality check, yesterday...

Being in debt isn't synonymous with being broke.

I could pay off my house tomorrow if I wanted, but financially it doesn’t make sense - so I keep the debt. That doesn’t mean my net worth is negative or that I don’t have disposable income.

What's important is how much you can buy, not how much money you have.

How else are we supposed to know who's better than who?

Debt is not a broke person thing. Most people you'd consider to be well off have debt.

Americans dont feel broke because they have extremely strong purchasing power.

I mean, it depends on what you mean by that. Anyone who has a credit card is going to have debt, just by virtue of needing to pay the bill.

But if you mean "most Americans have a negative net worth"

taking into account assets and debts

most Americans have a positive net worth.

https://www.kiplinger.com/retirement/average-net-worth-by-age-how-do-you-measure-up

The median net worth of all Americans in 2022 was $192,900.

Stupidity and the art of flexing.

If a person has a house they are paying a monthly mortgage payment towards, no one in America would consider them "broke".

I was in debt for several years from college tuition, but would not have been considered "broke" because I managed a job that met my essentials plus enough to pay down my tuition loans.

Debt isn't seen as bad so long as it's being managed. Exceptions for Dave Ramsey fan types.

You could say college and housing and medical stuff should never out a person into debt and I would agree. But that wasn't the question, it was about general perspective in the US.

I blame that predestination bullshit that's in the country's DNA. If you're rich it must mean God loves you and if you're poor that's due to your sins.

I am absolutely beyond broke on paper. My debts are well into the six figures and my bank account is in the low five figures.

I'm in my 40s and have a whopping $15k for retirement and no assets.

It's pretty awesome.