In Hot Water During Economic Crisis
The real estate industry is involved in the crisis that’s plaguing the USA nowadays. More specifically, the mortgage issues and selling houses and properties to those who are already in debt. From the vantage point of a consumer who depends on being thrifty to survive, I can tell you honestly that borrowing more, and investing using credit is a bad idea. The problem is everyone’s doing it. In a credit economy like the US, purchase of big investments involve credit, until of course, the banks cannot lend anymore, because they are in too much debt themselves.
Applying thrift and prudence in spending during daily life as well as in business could just make someone the new rich (french nouveau riche). Looking at some people who have “made it” it’s quite obvious that they didnt get to where they are by living on credit and dodging debt screwups by acquiring more debt. The theory is that if you maxed your card which had, for example $1000 limit, and you charged $1000 in daily shopping and other purchases, how would an increase to 5,000 dollars affect you?
At what point do you say “I have to stop spending or I won’t be able to pay for this? It really depends on your income, and a flexible credit limit creates the “power to purchase”. Managing personal debt means not borrowing too much and not allowing credit limit to rise to the ceiling, which eventually would rise above your ability to pay it and you will go bankrupt.
If we read the rags to riches stories of these nouveau riche, we will realize that a good financial standing starts with making good decisions about purchases. Cut out the fluff and stick to basics. Click to view more nouveau riche articles.
