Where Are We?

[culloden]

"Tell yourself that for every dollar you have, you owe 1.33$ (for example). How are you every supposed to stay wealthy for an extended period of time?"

When I was a little older than you, I bought my first house, using borrowed money. Over the life of that mortgage, I would have owed about 3 times the principle. So, it was like I owed $3 for every $1 I had (And the dollar I had was an equity dollar, not a cash dollar). But I worked and produced more than I consumed and now, 25 years later, with a little help from inflation, I'm essentially debt free and far wealthier than I was.

That's how. The key is to spend less than you take in, which applies to government as well as individuals.

 

[Mac98]

I said it once, I'll say it again ...

You guys are just egging him on and getting pissed off for your efforts, which is EXACTLY what he wants and needs.

This isn't trolling. I'm not doing this, trying to piss people off for the sheer fun of it.
I actually care about the debate/discussion at hand. You're all free not to participate and I'll gladly let the thread die when no one has anything left to say.

"Tell yourself that for every dollar you have, you owe 1.33$ (for example). How are you every supposed to stay wealthy for an extended period of time?"

When I was a little older than you, I bought my first house, using borrowed money. Over the life of that mortgage, I would have owed about 3 times the principle. So, it was like I owed $3 for every $1 I had (And the dollar I had was an equity dollar, not a cash dollar). But I worked and produced more than I consumed and now, 25 years later, with a little help from inflation, I'm essentially debt free and far wealthier than I was.

That's how. The key is to spend less than you take in, which applies to government as well as individuals.

Essentially, yes. This is the ideal way to manage yourself (though let's be honest, the government doesn't have a very good track record when it comes to income/spending). But push comes to shove, you always owe more money than you have. Although "you" are debt free, your country will never be. If your country is, the rest of the world won't. You'll always be in the minus. Also, it goes without saying that you'll always be a little poorer (or not as rich) as you should be. You borrowed 10,000$ yet you owe 15,000$ (example). Your 10,000$ dollars value automatically goes down. It's no longer worth 10,000$ (so to speak). I agree. Money management is always important. My parents were debt free all their lives until recently. But no matter what, there will always be debt. That's the way the system works.

There are a select few who are actually making money through all this and it's the big cats upstairs working for the federal reserve (I'm not sure what banks control this in the US... I think JP Morgan is one of them. In Canada we have BMO and RBC).