Total Motorcycle Community Forums

DivideOverflow wrote:I agree on keeping debt to a minimum. I have one year left in college, but I have no student loans, credit card debt, car payments, etc. The only debt I will have is when I buy my first house this summer. I own my car, as well as my bikes... no payments on anything.

I am able to do this because I work all summer (40 hours per week), and I work part time during the year. My parents havent had to pay a dime for my college education. Which is good, because I am hitting them up for house warming gifts...

I'll see how the no-debt thing works out after I get the house. haha

the only problem with this, is it sounds like you havnt established any credit. That is, unless you're saying you HAD credit cards, and payments at one time, and you paid them off...

my point is having no credit is no good either. Its a good idea to get a low intereste rate credit card, but something you would normally buy anyway, and then pay it off every month, just to establish some credit. Even though high debt and too many credit cards is bad, you still have to show companies (mortgage companies for example) that you have established credit, and that you will pay them back.

No credit is worse than bad credit. Never figured that one out.

No credit history but now want credit = life change = unstable.
No credit may = not really a person = credit fraud.

My parents stopped taking loans, cancelled their credit cards, and went "no debt" for about 15 years ... they were really proud of themselves... until they tried to buy a house. Their old credit history had all been deleted and they couldn't get a mortgage. I could (I was 19 and my entire credit history was one credit card) but they couldn't. Oh, they eventually got one but they had to sit through a lot of "hmmm...."ing from bank officers. I L'dMAO over that.

Someone a couple of pages back made this statement. "Financing ANY "luxury" Item is foolish. Whether it be a TV or motorcycle.
Some will say a motorcycle is their sole means of transpostation, therefore NOT a luxury. However any NEW bike IS a luxury if you cannot pay cash for it."

Based on that thought process, we would only be driving 2 door geo metro hatchbacks with AM radios and stock tires. Becasue truthfully anything more than that "IS" a luxury. Our society is based on luxury items. I'll bet there are a bunch of you who have riding tractors to mow your lawns when a push mower will get the job done. Hope you don't wear Nike or Addidas shoes cuz the one's from Target or Payless will fill the bill for alot less. And I'll be 95% of the folks here have at least one credit card that has a balance on it too. Granted you never want too much debt but try buying a house without established credit and see what happens.

I dont have any credit card debt. I have about $500 on one credit card because I just got back from a trip. I use it on trips and pay the balance when I get back, but the payment hasn't cleared yet

AM radio is also totally a luxury. And Target shoes are expensive, Payless is much better.

Most people need to finance at least some things, but, unfortunately, many people finance so much stuff that all of their income goes into repaying the debt which they never pay off (and never accumulate any savings). It seems to be the American way.

I know people who have financed their house, 2-3 luxury cars, a boat, an RV, a vacation home, a county club membership, and half a dozen maxed out credit cards. The interest on the loans alone consumes most of their income. But it's all a house of cards--they don't really own anything and if one of them lost their job, they'd lose it all.

I can't imagine it to be possible that someone could finance a house, 3 BMWs, an RV, a boat, a vacation home, a country club membership and a half dozen credit cards (I assume are a couple thousand each at least) with no liquid assets.

If banks/credit unions are financing these people, they deserve to get burned on it when the customer defaults. Thats just common sense.

The entire US economy is a house of cards really. If housing prices plunge or if interest rates really jump up, you'll see lot's of people jumping out of windows.

Oh, there are plenty of those people around where I grew up/used to live...living way beyond their means.

You want the really nasty part? In 10-15 years, those rat-humpers will have more money/a greater net worth than most of us. At least, that's how it has worked out for as long as I've been alive.

Here's the trick... they do own one thing... the house. Not outright... they are making mortgage payments of course... but one whole paycheck of their two-plus-income family group is going to the mortgage. The BMWs are all leased. The boat is on credit. The furniture is all Ikea junk charged to plastic. They are leaking money like sieves...

...but their house is appreciating at 20% or more per year.

...and in 15 years they could set fire to the boat and furniture, cash out their bank accounts and set fire to all their money, return the BMWs at the ends of their leases... sell their house and walk away with $350,000+ in their pockets. All you can say is, "yeah, but they could've walked away with $700,000 in their pockets if they weren't such idiots"... shrug.

There are people who do the same thing in a rented apartment... those are the people to really shake your head about... but most of the "three bimmer" crowd has the house/condo and everything else leased.

And yeah, if the housing market has a real slump they'll all walk away like they did in the late 80s/early 90s... and buy again like they did in the late 90s/early 2Ks...

If you ask a rich person how they got rich most of them would tell you to Spend someone elses money not your own.