The average American will pay off $1,786,810 in debt between ages 18 and 78

[hegemony]

 

 

The average American will pay off $1,786,810 in debt between ages 18 and 78

[MP80]

This means that over 60 years, nearly $30,000 in debt needs to be repaid annually, equivalent to an average monthly payment of $2,500.

 

Mortgages, car loans, or business loans are like shackles, binding debtors tightly and preventing them from ever being free from debt.

 

This doesn't even include the cost of raising children; if you include those expenses, the monthly cost will far exceed $2,500. 

[hdporter]

Speaking only for myself, neither mortgages nor car loans felt like "shackles".

 

Mortgages have been a vehicle by which to build equity, which is a financial cornerstone to our incipient retirement.

 

Car loans a means by which to finance an asset purchase at very modest rates for a vehicle that we hold onto for at least 3x the loan duration.

 

It's overspending, in any form, for which the rewards are shackles (certainly not prudent spending, which might include any amount of debt).

[TheVig]

Most of the people I know think I'm the A-hole and unrelatable, because the wife and I have never had a life time of never ending car payments. Yes, we've had car payments, but we have ;always paid off as quickly as possible, and then drive the vehicles until they are no longer cost effective to repair, or simply give up the ghost.

 

Nor have ever financed furniture, home goods, electronic gadgets, etc, etc, etc.

 

I treated myself this morning to a coffee from Starbucks for $6.98! No wonder people are broke. Death by a thousand cuts.

[MP80]

For those who don't feel that mortgage payments and other long-term loan installments are a "dead grip" that places a heavy burden on their finances, this is essentially a subjective issue. 

 

They are either from wealthy families who never worry about money because they belong to the affluent class, or they are young people who can foresee the future and understand the necessity of obtaining a good education, choosing a degree that will provide financial security, and achieving this through government grants, Pell Grants, financial aid, or parental support. Higher education is a pathway to escaping poverty or avoiding being burdened by massive debt.

 

The post's title mentions an average debt of approximately $2 million to be repaid over 60 years, a sum that a well-educated professional could easily earn in just two years. Mr. Dimon and other corporate helmsmen with huge annual bonuses would make that amount in 1 month or less. 🙂

[cashnocredit]

That's one weird survey. Strangest thing is they exclude credit card interest! And they include principal and interest on mortgages, car loans, and such. Why should any principal be considered in the cost of debt? Someone that buys a car and pays it off the next month (a strategy used to get the lowest price) has this big "debt" while someone that just buys the car outright has incurred no debt? Real question is how much interest one pays during a lifetime for the benefit of acquiring stuff using debt.

[MP80]

Different cultures and financial planning are closely intertwined with applying for a mortgage; people need shelter, and that's the connection. Those with large families, for example, three to five siblings, often view a mortgage as a cornerstone for maintaining family unity. This cultural phenomenon is prevalent in Eastern countries, including Northeast and Southeast Asia, where people typically live in extended families with a patriarchal or matriarchal elder as the head of the household.

 

Some people apply for mortgages for future financial planning purposes, viewing real estate as an investment that will appreciate, allowing them to buy and resell for profit. Since the late 1970s, the demand for buying homes in the Bay Area has been disastrous for ordinary people paying monthly rent, and people are now realizing the negative consequences of this phenomenon, the rent hike!

 

I witnessed firsthand my boss using all the business revenue to pay off mortgages—not just one or two, but five or even more. Some of our employees were paying off mortgages with their meager salaries, struggling financially, and ultimately being exploited by their employer. Even our manager suffered the same fate (salaries NSF). Later, we got smarter and started cashing our paychecks at the bank that issued them before depositing the money into our own bank accounts. But many times, when we went to cash the checks, there was simply no money in the account. This practice of employers withholding wages was widespread in the Bay Area during the 1980s and 90s, until some people had enough and filed complaints with the U.S. Department of Labor.

 

Years later, retribution finally caught up with this unscrupulous employer; he was sued, convicted, and imprisoned. His obsession with acquiring mortgages and paying off multiple mortgages each month, driven by his belief that the real estate market would skyrocket uncontrollably and that his properties would soon double in value, ultimately led to his downfall and involvement in other crimes. 

Edited January 23 by MP80
ETA