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March 22, 2010


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Great Guest post.

I really liked this: "Money makes money. Credit does the opposite. Debt breeds poverty". This saying comes to mind after reading these sentences: "you have to have money to make money". However, credit card's can be an excellent source to tide one over during a period of unemployment, hardship, medical expenses, etc. What if you run out of your 10% for the unknown unknowns? Borrow from friends? Use credit? Sometimes the latter option may be the only option.

With some of the late fees I have seen particularly from the credit card companies you don’t want to be late!

"The only two loans you should even consider are a home mortgage loan and a student loan for an education or training that increases your earning potential. Money makes money. Credit does the opposite. Debt breeds poverty."

This is true for the vast majority of people who will read it here, but it's not true enough to state as unequivocally as has been done by your guest-poster. Two of the most successful people I know started their own businesses from scratch. And by 'scratch', I mean their own talents plus money they borrowed to cover the start-up costs of their businesses. Actually, I shouldn't say that they've stopped borrowing. I know for a fact that one of them still borrows sometimes as his business expands, and the other may do so as well.

Taking out a loan (letting someone else invest in you) is good business if you can provide a large enough return on that investment to make you creditor happy plus a little extra to put in your own pocket or roll back into the business.

That said, I don't own my own business and the only thing I owe money on is my home.

I was actually cheering along in my head when this was describing the disadvantages of credit card debt and late fees. What a waste, right?

From this post and almost every other one I've read about debt or budgets lately, I see that my husband and I need to get rid of our car loan.

I made an extra $1000 principal this rate, we'll be car loan free by the end of 2011 and mortgage/debt free by the end of 2017. Yay!

I don't see the advantage of a HDHP if you can get health insurance with a low or zero deductible and reasonable premiums. Probably can't get a plan like that except thru an employer though. Pooling lots of people together is exactly how to reduce insurance premiums. I have a friend who works for a small (< 200) company and her health insurance is expensive because they get their insurance as one company only. My wife on the other hands also works for a small company but they get their health insurance through Administaff which pools lots of companies together to keep premiums low.

I pay my credit cards online using the scheduling payment features of each cards' website. That way I can pay the bill the day it is due and not worry about any late fees or checks getting lost in the mail.

No way I'm going to budget getting a new $30K (or whatever) car every five years. Any car I get ought to last 10 years. We have 3 cars right now - '97, '98, and '99.

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