Friday, March 04, 2005

 

Great personal finance advice (also a great way to destroy the economy)

From Walt Starr on Democratic Underground (via Will Pitt):
How smart people will handle the new Bankruptcy law

When life deals you lemons, make lemonade.

Here's a step by step process:

1) Stop buying anything but the bare essentials. There is no need for high definition surroundsound 50" televisions. Make due with what you have. Do not go shopping for needless crap. Don't spend that extra ten dollars because you thought the vase in Target looked pretty. If something breaks, save a few extra dollars out of each paycheck until you have enough money saved up to replace the broken item. Yes, this includes your television.

2) Put 5% of each paycheck into a savings account. Do not touch this money under any circumstances. If you want, when you reach four figures in this account convert some to Euros.

3) Stop using credit cards for anything except absolute emergencies. No, that high definition surroundsound 50" television is not an emergency. No, that cruise is not an emergency. Emergencies would be the plane ticket to fly across the country to get to your grandmother's side while she is on her deathbed.

4) Choose your credit card that has the lowest balance. Cut it up into little pieces, but keep account information handy for payoff purposes. The lowest amount to pay monthly is three times the minimum balance. Repeat these payments until you have a zero balance. Cancel the card.

5) Repeat step 4 until you get to your last credit card.

6) On your last credit card, the lowest monthly payment is still three times the minimum payment. Get this credit card to a zero balance. Lock up the credit card in a fireproof box with important papers. Keep and use only in case of emergency.

7) Everything you used to spend on your credit card payments now put towards principal payments on your mortgage.

8) When all debts are paid off, continue to spend very little money. Be thrifty and save for bad times that are coming.

The fact of the matter is, the credit card companies are going to realize a HUGE return on this bankruptcy bill on the front side. They'll even convince some idiotic Freeper types that insurance they sell for a massive premium price is worth it. They are going to squeeze deadbeat red state Freepers like squeezing blood out of turnips, but those of us who are good credit risks will be thrifty. We won't spend extra money on stupid crap. We will pay off our credit cards, and they will cease earning their monthly indenture payment from us.

Meanwhile, they will still have difficulties getting everything out of the Freeper red state deadbeats who are over extended on their credit and their earnings will start slipping again, so their rates will come down and they'll give credit to riskier and riskier consumers. Eventually, they'll drown in their own turnip juice because no matter how hard you squeeze, you'll never get blood out of turnips.

Folks, make good on a bad situation and take this opportunity to get yourself out of debt. Turn this around on the credit card companies and screw them royally. Legislation influences behavior, and the responsible consumers will alter their behavior accordingly.
This is great personal advice, but if everyone follows it, it will destroy our economy, which is completely based on people spending more than they earn by using too easy access to credit (i.e., unsecured borrowing). Companies decide how much to manufacture by projecting sales based on people spending too much. If everyone stops spending, unsold inventories will build up, factories will shut down, stores will have to discount and lay off employees, etc.

I'm only slightly serious about this. It's a great post, but it truly would shake up our economy. Probably for the good, but nevertheless a great shakeup.
Comments:
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Comments: "
Hey, nice info! I'm definitely going to bookmark you!
I have a credit card consolidation site. It pretty much covers credit card consolidation related stuff.
Come by and check it out later :-)
 
" "
Hey I was just blog surfing amd I found your blog! Looks Great!

I also have a plane ticket to germany
It deals mostly with plane ticket to germany plus other stuff,
You can save up to 50% your next flight!

You should check it out if you get a chance!!
 
" "
Hey I was just blog surfing amd I found your blog! Looks Great!

I also have a tampa international airport
It deals mostly with tampa international airport plus other stuff,
You can save up to 50% your next flight!

You should check it out if you get a chance!!
 
" "
Great Blog! I was searching for "adverse credit unsecured", and found you!

Thanks for the posts. Keep up the good work.

If you get the time try my Credit Repair site and get a free Credit Repair Report!
 
" "
We had been blogging trying to find how our world sees cash back credit card. It has been a lifeline for us. Your site provides some of the best examples of this sort and we will bookmark yours. Another one we found was and appears to be related to yours is cash back credit card site/blog. It pretty much covers cash back credit card related stuff.
 
" "
Your message on consolidation is great! I have a site on consolidate credit debt debt management
Your readers might find interesting. You can check it out at: http://www.apexconsolidation.com
 
" "
Cool blog you have about online credit card approval. I have a online credit card approval related site. Check it out if you get a chance.
 
" "
So many blogs and only 10 numbers to rate them. I'll have to give you a 7 because you have good content but lack of quality posts.

Free Access To More Information Aboutnetti
 
" "
A well researched article.making money opportunity I got a lot from reading it making money opportunity
 
" "
This blogstuff is great just looking around yours I have one too free credit card debt consolidation I have a website dedicated to gettin people out of debt all free info free credit card debt consolidation
 
" "
Cool blog you have. I have a need money related site. Check it out if you get a chance. The URL is need money
 
" "
Shop online today. Forget driving to the mall when you can just click the mouse and order from your favorite store. No traffic to deal with
 
" Post a Comment

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