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So how much "bad" debt are you in?
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this post was submitted on 20 Oct 2023
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ITT: few people having any clue what the difference is between good and bad debt, or that debt is basically essential to creating wealth.
I'm just enthralled at the idea of how normalized having negative money has become. Something something dystopian
I mean most people saying they don't have any bad debt, but saying they have good debt isn't too bad! It is interesting to know how much mortgage people are carrying.
But these days even mortgages feel bad. 400k at 7% is 28k of just interest. So houses feel way out of reach with current prices/rates.
If rates go down prices go up. So doesn't feel like there is much winning for non home owners.
Housing prices, like everything, is determined by supply/demand. Interest rates are only part of the equation.
The main reason housing is high right now is because of the supply side, and that’s low at the moment because COVID destroyed the global labor market and the supply chain, so materials are sky-high, with fewer people to do the work of building.
Also, as the stock market tanks people move their money into safer places, like cash or property, hurting the supply side even more. This is what cashed up Boomers are doing (yep, we can keep blaming them).
Housing prices won’t come down until supply outweighs demand.
With how much they push for 25+ years mortgages you're going to pay way more than 78k for a 400k one.
Not sure if you mean per year but mortgages are generally going to be over much longer time periods. A couple who I know are looking to buy somewhere new and are looking at getting £400k mortgage or thereabouts. With rates as they are now, and over 25 years, they'll end up paying back £900k!
7% per year yes.
28k per year in interest on just a normal home is crazy.
Wealth is not created, it is taken.
You literally create wealth at your job.
actually, I am unstable and an incredible liability. If anything, I am a wealth-shrinking entity, like the common household Offshore Tax Shelter. Beware my economic hoodoo.