Just heard a statistic that 70% of America is living Paycheck to Paycheck....

[Bimmerbill]

Dang! I'd love to get a bonus big enough to buy a Harley!

I gotta find a better paying job!

I'm shocked by the statistics. $7.5K net worth?!?! Even after graduation from college and working for $8 an hour I was never that bad off!

[uncledrz]

this is an absolutely fascinating discussion!

My personal observation is that the people I know personally or through business are not living paycheck to paycheck. Rather, they have either accumulated significant assets or have a pension/health insurance from public or private employment.

Some younger people, especially those with children still at home are in the paycheck to paycheck dilema, but most are not.

Yet, the statistics which have been set forth by many of the posters seem to support that there is some large percentage of our populace that is in this situation.
If that is the case, and we are more stretched and less secure financially, then as T-Al questioned, this may have a great impact on our ability to withstand higher interest rates as well as higher energy costs.

Very interest conversation.

[SteveR]

Quote:

Originally Posted by Bimmerbill Dang!* I'd love to get a bonus big enough to buy a Harley!* I gotta find a better paying job! I'm shocked by the statistics.* $7.5K net worth?!?!* Even after graduation from college and working for $8 an hour I was never that bad off!*

A net worth of $7500 would not be all that unusual, especially in people just starting out in a career. A car with a low down payment and a long loan term will always have a negative net worth. Add student loans, CC debt. and no real assets and you can have a pretty substantial negative net worth. After my divorce I calculated my net worth at that time to be over -$100k and that was with a house equity. I had no cash, no investments and was saddled with the debt (13 CCs worth). Add to that loans on two cars (one was a lease so no value). I was 38 years old. When I graduated from college at age 22 I had no debt and no assets. For that brief period of time I had a net worth of zero. Even a few years later is was not over $5k. By the time I was 30 my NW might have been $10-15k due to house equity.

NW today is far different than what it was 15 years ago when I was in my late 30's. Not bragging here, just trying to put some of the comments here in perspective. You can have a good income but have a low NW; at least until you learn how to save and create ways to increase your NW. If you make $100k/year but have few appreciated assets and high debt you will still have a low NW.

20 years ago a $5000 bonus would have gone to pay some CC debt and to buy part of a new toy or whatever. Now it goes into investments and retirement plans with a few bucks left over for some minor spending on travel or a special gift or two. Big difference in spending patterns today vs then.

[Dreamer]

The bonus probably made the down payment or so. They probably financed the rest! I really have no idea how much Harleys cost and only know how much my DH's bonus is when he receives one. They are nice to receive, but we don't count on it!

[Leonidas]

Quote:

Originally Posted by brewer12345 Probably little to none, but tere are (very foolish) lenders who will give loan you up to 125% CLTV on your primary residence.

I had the radio on in the truck a couple of days ago and I heard a few minutes of "the mortgage show" on AM radio. The two guys on the show were hawking their company and sounded like a couple of used car hucksters.

No Job? No problem!

Living at home and not paying rent? Just have your mama or your auntie write us a letter, 'cause it's no problem.

Past foreclosure? No problem!

We want to work with you!

It went on like that for several minutes. At first I thought it was a skit, but then it hit me that these guys were serious. ARMS, interest only, 110% of appraised value - whatever you can think of these guys were selling it.

[Mwsinron]

They just end up strolling in and taking peoples houses? Either way it seems to be win win for them. Either the loanees begs family for money and they get paid or these places just plow through and take the house. Rough road for folks going down that path.