Honest question: With inflation continuously rising, would it be smart to take on a little debt now?
With inflation rising, supply chains still being a mess which makes obtaining goods more difficult, and things only getting more expensive, it seems like a sound decision to take on a mortgage or a car payment now as opposed to in the near future when things will only be more difficult to obtain and more expensive. Inflation will outpace any interest on loan. Resale value of some of these big ticket items will only go up.
I'm not saying go out and buy unnecessary things, but I'm genuinely curious what your thoughts are on purchasing big ticket items of need or investment purposes now as opposed to 2 or 5 years from now.
Living in debt is living in slavery to someone else. Unless you can buy with cash, DON’T buy it!! A house is probably the only exception, but why TF someone would want to get into debt is beyond my understanding. Financial Peace is real and living in it is priceless.
Disagree, reasonable amounts of debt allow you to get stuff ahead of when you would have and free up the rest of your money in the meantime to do other things with it. I'm not saying maintain perpetual credit card debt, but certain things (car, business, home improvements etc) can make a lot of sense to take on debt over.
For example, I know it's a money loss as soon as you drive off the lot, but I prefer new cars, and I typically have timed it to get them at really low interest so it really wasn't costing me a ridiculous extra amount to get them with loans vs paying cash upfront (that I didn't have).
Strongly agree here!
Well I can make much more money investing and trading myself than any interest payments so it makes sense to keep the capital, make money with it, and have a monthly payment. Debt is often used to make money if done right.
I had a HELOC from 2007 to 2017 borrowing phase initially 2.74% went as high as 4%. was at 2.74 % when I paid it off in 2020. I used it and paid it back 4-5 times. Returned 14.57% and 18%, the other times I bought condos. I wish I could borrow 1 million at 2.74 %...
True, but make sure you can pay back the loan even if you lose everything on the stock market.
If the interest rate is fixed, it would be a financial advantage to borrow as much money as you can, because the money you pay it back with will be worth a lot less.
Would it be smart to go into debt right now?
I think there is a thin veneer hiding huge instability right now. Your debt could be used against you selectively for being a 'domestic terrorist' for things you said online. Look at MTG. They are trying to block her from re-election because she said something about 1-6 and freedom after it happened. As that somehow implicates her in the plot.
According to Mike Maloney, a hyperinflation is often preceded by a rapid deflationary period. If that were to happen you risk holding some filthy bags. However, he and Peter Schiff have been calling a crash for 20 years, soooooo who knows.
Mike likes to say that it's rare that an economy swings in the direction in favour of the majority. I.e. if everyone is jacked to the tits on debt a deflation comes along and fucks everyone. If everyone is saving like a champ a hyper inflation comes along and wipes out everyone's savings. Things are so fucking crazy now maybe this doesn't apply.
In reality people have made bank over the last 10 years doing what you suggest. However, someone has to hold the bags someday. I prefer not to have debt so I don't have to think about it. Everyone that I know that succumbed to vaccine coercion was jacked up on debt. I prefer the freedom.
It's been said that Peter Schiff has predicted the last 11 out of 3 crashes.
Then again I was predicting this crash to have happened several months ago, I underestimated their ability to keep kicking the can. They built a bridge hanging off the cliff so they can keep kicking it even.
Yes generally with inflation if you take on debt the cost of that debt lowers relatively over time assuming your wages rise with inflation and/or career path etc.
However, with the coming antipated hyperinflation it's not gonna matter if we don't have jobs, taking on more debt is an obvious risk....
Personally I figure we're coming up on some kind of nexus one way or the other so I'm just kind of rolling with things, want to get a new car before shutoff devices are in place in 2025 or whatever (and while all-gas engines still available)....
If you have the cash the smart move is get it out of the bank and into assets. Debt however isn't wise, when things get bad and you have to stop paying a note to afford food, then they'll come take it from you.
If you have enough savings to hand them the worthless notes when inflation has taken its value then it might be.
If you don't have the money in hand to pay the items off when the money becomes worthless then no.
The only except is a home, but at the prices today I would also avoid that purchase. Homes have sky rocketed on the cost of materials, and on pure speculation. This is unsustainable in an enviroment where income is stagnant. In my opinion we are being taken into a huge crash. It will likely make 2008 look like a blip.
Yes. My car loan is 1.77 percent. Why not use my savings for DWAC or gold instead. It’s going up more than 1.77%.
Remember there's no debtor's prison and the mother of all collapse is coming. Borrow from Fed. Reserve banks, and buy things of value after there is no FR.