USGrant1962
Thinks s/he gets paid by the post
Michael does his usual excellent job as he looks at spending rates versus FIRE. Too many points to summarize here, but a few key quotes:
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Article here: https://www.kitces.com/blog/spendin...ail&utm_term=0_4c81298299-75de226c7f-57160561
Discuss away!
In some of the largest categories, which tend to be financed with debt – e.g., homes and automobiles – lender guidelines place some restriction on the maximum amount of spending in each of those key categories. With the caveat that lenders don’t lend based on what is prudent for the borrower, but what will result in a permissible level of defaults and losses for the lender. Or stated more simply, borrowing guidelines are based on what the lender believes will extract the maximal amount of interest with an acceptable level of defaults… despite the fact that many of those borrowers will be in over their heads and struggling just to make their repayments!
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And also helps to recognize that, for most middle-income households where spending is challenging, it is actually far better to focus on housing and transportation costs than trying to trim vacations, clothing, lattes and avocado toast from the budget.
Article here: https://www.kitces.com/blog/spendin...ail&utm_term=0_4c81298299-75de226c7f-57160561
Discuss away!