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Debt would be a better indicator really. A lot of people you think are 'doing well' where I live have 50k in credit card debit and owe 25k on their car.
by cmdrfred 10y ago
Debt would be a better indicator really. A lot of people you think are 'doing well' where I live have 50k in credit card debit and owe 25k on their car.
- pavlov 10y agoJust the amount of debt isn't a great indicator, you also have to look at the interest rate. And those are all over the place in today's world. The European Central Bank's refinancing interest rate is currently a negative -0.4%. If I could have a line of credit at that rate, I would take all I could -- for every million euros I borrow, they would pay me 4000 € / year in interest!
- cmdrfred 10y agoI agree, I'm not talking about mortgages or even reasonable student loans here, there is a good change they will generate value for the borrower. It's more about unsecured and underwater debt, that car that is worth 10k but you owe 25k on for example.