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"[My father's] most adamant instruction was that I should never under any circumstances go into debt." Now that's a dangerous heuristic. Never purchase a hous
by __ 18y ago
"[My father's] most adamant instruction was that I should never under any circumstances go into debt."
Now that's a dangerous heuristic. Never purchase a house, car, education, or medical treatment, except with cash?
- gaika 18y agoIt is even worse, imagine if everyone were to follow it: there would be no money today.
- nostrademons 18y agoThere could be money; there was before fractional reserve banking was invented. It's just that the economy would work significantly less efficiently, we'd get widescale deflation every time people wanted to save, and we likely wouldn't see the large investment projects that have resulted in our 21st century lifestyle.
- deleted 18y ago[deleted]
- elai 18y agoExcept for a house, there are many, many people who do that. Especially in countries where education & medical treatment is not heavily inflated like the USA. And even in the USA you can go to berea and get a 2003 Civic without much hardship at all. Some people can take the subway for a while until they save the money for a car.
- nostrademons 18y agoI never understood the concept of financing or leasing a car. I was taught that you save for a car, and then when you buy one, you start saving up for the next one.
- dominik 18y agoA better rule might be: "Never go into debt unless your benefit from whatever you buy using the debt exceeds the cost of the debt." Examples: A house generally appreciates in value. Usually worth going into debt. A new car. Unless you gain somehow from having a brand new car (e.g. you're a movie star), you can get most of the value from a used car and avoid the massive value decrease. A computer. As a hacker, you need your computer to create. Having a computer lets you make wealth that wouldn't be possible without one. An education. Hopefully improves your ability to create value by teaching you new and interesting things :)
- run4yourlives 18y agoYou shouldn't be going into debt to fund a computer purchase. That's the kind of stupid debt the quote is talking about. If you can't save up $1500 to buy a good computer, you probably don't want it bad enough.
- ConradHex 18y agoAnd if you're saving up the money, you may decide a $500 computer is just great.
- marvin 18y agoAnd ditto with a car. A car is so cheap almost everybody could save up enough money in a reasonable amount of time. Not so with a house, or an education.
- ashwinl 18y agoA car may be "cheap", but the primary variable cost associated with it is only getting expensive (i.e. it's approaching $5/gal in CA)
- mlinsey 18y agoWhy does this matter in a discussion of whether you need to take out loans for a car? Surely you're not suggesting that people should take out loans for gas?