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Moving in on salary 43K HKD per month with family of 3 .. is it worth ?

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  1. #41

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    Quote Originally Posted by AmericaninKT:

    But to use your logic of not buying anything that you can't afford to pay off immediately, let me ask this: you expect people to pay cash up-front for cars and houses and college educations then?

    .
    YES! Of course I do. Car debts are ludicrous - never use debt for a depreciating asset. I never, ever, understood why anyone would buy a brand new car (immediate loss of value the minute you drive the thing out of the car lot) with debt. College debts - I never had a college debt - I worked while at college to ensure I paid my way (because my parents refused to support me). Houses - different - mortgages are sensible in an environment of stable or rising house prices because houses are assets. Having said that, paying off the mortgage is often a very sensible savings plan particularly if you have a high interest rate. That's what we did and now own three houses with no mortgage.

    Like Kim I had a period of my life where I had nothing and had to scrimp and save to get by. Which I did. I did without. When invited out with the gang for a dinner out I said "no thanks, I'm fine, have fun" because I couldn't afford to eat out. I lived on frozen mince and potatoes for a couple of years (right in the middle of the mad cow era in the UK.. when frozen mince didn't contain any of the beefy bits of the cow!). I purchased my clothes in the Oxfam shop and walked everywhere because I couldn't afford a car. I honestly find it really hard to understand people who choose to get things they cant afford and use debt - whether car debt or credit card debt. I see them when they struggle (as I said, a relative of mine had a HUGE credit card debt problem which other relatives ended up sorting out because it was beyond their ability to deal with by then) and just think they are idiots. Its avoidable. And it's attitudes like yours - that debt is normal or even necessary - that perpetuate this cycle.
    kimwy66 likes this.

  2. #42

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    I think we are muddying the waters a bit here.

    I'm certainly not advocating financial carelessness in terms of credit card debt, loans or anything else. However I can certainly understand the scenario when one would have to put a charge on a credit card (which one couldn't necessarily afford) in times of an emergency. You can't possibly plan for every contingency, and you can't take out insurance against every possible problem (nor can many people afford to). It might not be right, it might not be prudent, but this is an uncertain world we live in and unexpected things happen, often at the worst times.

    If you can't imagine a scenario where someone would have to do this, then you are simply not thinking hard enough.


  3. #43

    You're overreacting

    Quote Originally Posted by HK_Katherine:
    YES! Of course I do. Car debts are ludicrous - never use debt for a depreciating asset. I never, ever, understood why anyone would buy a brand new car (immediate loss of value the minute you drive the thing out of the car lot) with debt. College debts - I never had a college debt - I worked while at college to ensure I paid my way (because my parents refused to support me). Houses - different - mortgages are sensible in an environment of stable or rising house prices because houses are assets. Having said that, paying off the mortgage is often a very sensible savings plan particularly if you have a high interest rate. That's what we did and now own three houses with no mortgage.

    Like Kim I had a period of my life where I had nothing and had to scrimp and save to get by. Which I did. I did without. When invited out with the gang for a dinner out I said "no thanks, I'm fine, have fun" because I couldn't afford to eat out. I lived on frozen mince and potatoes for a couple of years (right in the middle of the mad cow era in the UK.. when frozen mince didn't contain any of the beefy bits of the cow!). I purchased my clothes in the Oxfam shop and walked everywhere because I couldn't afford a car. I honestly find it really hard to understand people who choose to get things they cant afford and use debt - whether car debt or credit card debt. I see them when they struggle (as I said, a relative of mine had a HUGE credit card debt problem which other relatives ended up sorting out because it was beyond their ability to deal with by then) and just think they are idiots. Its avoidable. And it's attitudes like yours - that debt is normal or even necessary - that perpetuate this cycle.
    Debt is normal in that sense that owning a car is a necessity for the majority of people in America and the majority of car owners have car loans/car payments. A car is an asset which depreciates, obviously, but it has trade-in or resale value. The people who insist on having a new car every year are idiots. We can agree on that. But a car is a necessity and for the great majority of people the sort of some kind of debt.

    There is also the argument that having credit and paying it down and managing a car loan and/or a credit card helps one build up a good credit record in America which can help when you want to buy a house, for example. Obviously the key is managing the credit and paying it down considerably.

    Oxfam clothes and mince pies? Oh la la. I bet you reeked of patchouli too.

  4. #44

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    Quote Originally Posted by AmericaninKT:
    Debt is normal in that sense that owning a car is a necessity for the majority of people in America and the majority of car owners have car loans/car payments. A car is an asset which depreciates, obviously, but it has trade-in or resale value. The people who insist on having a new car every year are idiots. We can agree on that. But a car is a necessity and for the great majority of people the sort of some kind of debt.

    There is also the argument that having credit and paying it down and managing a car loan and/or a credit card helps one build up a good credit record in America which can help when you want to buy a house, for example. Obviously the key is managing the credit and paying it down considerably.

    Oxfam clothes and mince pies? Oh la la. I bet you reeked of patchouli too.
    No idea what patchouli is, but when I could afford a car it was paid for in full. (cheap, second hand car). I've never had a car loan (and I've owned a lot of cars). As I said, accepting consumer debt (not mortgages or leverage, consumer debt) as "normal" is a huge part of the problem. It's one of the causes of the financial crisis and it's something that gets ordinary people into trouble. If Americans (and many Brits, Aussies etc etc) were to stop thinking that debt is normal and stop wasting so much money on credit cards we might lower the risk of another crisis. Of course, we might also lower GDP as it seems to me that much of the economies of these places is fueled by people buying stuff they don't need funded by debt! But that's another issue entirely.

  5. #45

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    Americans buying houses they couldn't afford was one of the key problems in the recent global financial crisis. Banks who loaned them the money and then securitisied the loans in impossible to understand paclages were also very much to blame, but without the Americans keen to borrow beyond their means the subprime crisis would never have happened.


  6. #46

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    Quote Originally Posted by HK_Katherine:
    No idea what patchouli is..
    Its an attempt by the debt-laden denizen at insulting you for being too thrifty. He is probably thinking "you should just use your easy credit card and live properly instead of scrimping bye..."

    There is also the argument that having credit and paying it down and managing a car loan and/or a credit card helps one build up a good credit record in America which can help when you want to buy a house
    Nothing helps more than having a bit fat downpayment % which you can have if you dont squander your money buying un-necessary items at high interest rates.
    HK_Katherine and kimwy66 like this.

  7. #47

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    Quote Originally Posted by HowardCoombs:
    Its an attempt by the debt-laden denizen at insulting you for being too thrifty. He is probably thinking "you should just use your easy credit card and live properly instead of scrimping bye..."

    Nothing helps more than having a bit fat downpayment % which you can have if you dont squander your money buying un-necessary items at high interest rates.
    LOL, thanks! Of course, what is also interesting is that NOW I can squander money when I want to. I fly business class on holiday, because I WANT to (which I know many people feel is a complete waste of money). I'm still thrifty in many areas, but once you learn to budget it's much easier to make choices - save on things that are less important to you personally and spend on areas that are important. If you never save, you never learn to differentiate! And never build up the capital to be able to relax later in life and enjoy the money. Money management isn't just about saving and being thrifty - it's ALL about being able to have things you want once you've saved up for them!

  8. #48

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    Quote Originally Posted by AmericaninKT:
    There is also the argument that having credit and paying it down and managing a car loan and/or a credit card helps one build up a good credit record in America which can help when you want to buy a house, for example.
    And nothing destroys your credit record faster than missing a payment or defaulting.
    Fiona in HKG and HK_Katherine like this.

  9. #49

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    And on the subject of having credit cards helping you get a mortgage... that's very location specific as I found out when I moved to Australia. On applying for a mortgage there, I was asked to list all my credit cards. Now, in the UK (back then, this was a while ago) like the USA having credit cards was considered a "plus" for more credit ... but the Aussies were smarter than that, they actually ADD UP all the credit limits on all the cards, and then deduct that from your ability to pay a mortgage. So once they added up all my (20 or so, common in the UK back then) cards, they said I couldn't afford a mortgage. Hmm. (I found the fact that they ignored the mortgage-free property I already owned in the UK to be less sensible!). Cut up a few cards and applied at a different bank - no problem.


  10. #50

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    It's important to be financially responsible. I learned my lesson the hard way, luckily at the time I was single with no dependents.

    AmericaninKT, with your much publicised financial difficulties, has your view changed?


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