Not a subscriber? Click here to learn
more.
|
| Home | About Us | Resources | Archive | Free Reports | Market Window |
A Crazy Story... How You Can Avoid Getting Sucked InBy
Tuesday, April 30, 2013
"I can say with honesty that I have not contemplated taking my own life due to debt," a friend with big debts told me in an e-mail yesterday.
My friend's comment was about a crazy story from last week... Another man I know took his own life. Money worries are likely the main reason.
Apparently the guy who took his own life owed lots of people lots of money... The dollar amount totaled in the millions, I'm sure.
He's actually the second person I know this year that took his own life... for the same reason – money.
"Debt is a debilitating feeling," my friend with big debts continued. "I am carrying a high enough stress level that I find it difficult to sleep at night."
I lent this friend some money to help him get his business off the ground. But his business has hit unforeseen roadblocks. There is no cash flow yet. His money worries are real.
My friend is not alone...
Everyone has money worries. Everyone tosses and turns (at least a bit) at night about money.
The concern is when that "normal" worry crosses over into a dangerous worry... when you reach the point where you're in so deep, there is no getting out.
This mostly comes from getting in over your head with DEBT.
Most people don't see it coming. You think you're doing the right things, trying to get ahead in life. You see borrowing money as the way to get ahead. But the thing is, the debt remains, even if the plan doesn't work out.
The only advice if you're in that situation is to not throw good money after bad... Don't dig the hole deeper in order to get out. But the more important lesson today is: Never let yourself get so indebted that your money worries consume your life.
If you're an overachiever, this is actually hard to do... It's hard to play smart for the whole game of life, when temptation often shows its face. It's hard to play smart when you see an opportunity that is just above your reach... but could become a reality if you take on a lot of debt.
When you're dreaming about the big opportunity in front of you, all you think about is your upside potential – about how much money you'll make or how good you'll feel when all goes right.
But things do go wrong. Whether it works out or not... The debt remains.
Most people think it's normal to borrow a lot of money to start a restaurant or some other business... or to borrow money to speculate on a real estate deal or other investment.
Just because people think it's normal doesn't mean it's right. And I don't have the right answer for your situation. I don't know what the correct amount of debt is for you.
Except for taking a mortgage to buy a house right now... I think that if you don't have the money, don't spend the money.
Most people don't live by that standard. But that standard will keep you out of trouble.
You can live life with a clear head. And you will sleep soundly at night.
Good investing,
Steve
Further Reading:
"Breaking the chains of financial slavery can be done relatively quickly," Mark Ford writes. "The hardest part is recognizing the chains that are binding you and deciding to do something serious about them." If you're ready, don't miss Mark's essay on how he deals with debt... and his guide to achieving financial freedom in just three years. Get the details here and here.
DailyWealth Classic: "There will be no mercy for the financially illiterate in the future," Tom Dyson explains. "It's likely these people will live as indentured servants to the government and its creditors... But if our kids have a grasp of finance and its basics – and they obey its laws – they will grow up rich." If you're a parent or grandparent, Tom's article is a must-read.
Market NotesWHAT'S GOOD FOR U.S. HOUSING IS GOOD FOR WARREN BUFFETT Housing continues to recover... and this "stealth" housing play continues to soar.
The stock is superinvestor Warren Buffett's holding company, Berkshire Hathaway (NYSE: BRK-B). Most people don't know it... but many of the businesses Berkshire owns benefit hugely from a booming housing market.
For example, Berkshire owns an 8% stake in Wells Fargo. Wells Fargo is the country's largest bank by market cap and provides one-third of all U.S. mortgages. Berkshire also owns a brick maker, a carpet maker, a paint maker, a company that produces building insulation, and a homebuilder.
In short, what's good for U.S. housing is good for Berkshire. And as Steve Sjuggerud pointed out in a recent issue of DailyWealth, things are good for housing. Supply is low... demand is high... houses are still cheap... and mortgage rates are near record lows. And in March, the average price of an existing home was nearly 12% higher than it was last year.
Berkshire shares are doing even better than that. Buffett's company has seen its share price climb 33% over the past year. Last week, it struck a new all-time high.
 |
Recent Articles
In The Daily Crux
|
