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Exactly. Which means when you finish school, if you have a student loan you have negative wealth. If you finished a good school and can expect a decent career y
by saberdancer 6y ago
Exactly. Which means when you finish school, if you have a student loan you have negative wealth. If you finished a good school and can expect a decent career you are not in a bad situation even though your wealth is negative.
- vishnugupta 6y agoThe point of the parent was that you aren’t in net debt if you own a tangible asset, like a house or a car, on loan. If push comes to shove you could sell off your house, move into a cheaper rental house, and clear the debt. Student loan gets you into negative wealth territory but not housing loan.
- ryandrake 6y agoWe forget so soon! Housing debt (which is secured with a tangible asset) can easily bring you into negative territory when your home value falls below your loan balance, which happens regularly, as real estate is cyclical. Also, I'd bet many, if not most, car loans are underwater the first day the car is driven off the lot. Lots of people have to pay additional money to satisfy the loan, after selling their car.
- deleted 6y ago[deleted]