(September 16, 2014 at 2:34 pm)Exian Wrote: I know two people who used Dave Ramsey's book The Total Money Makeover to get out of trouble and they're doing pretty darn good now.
I haven't read it, but it's on my reading list at some point.
I bet he recommends the one thing I failed to mention in my last post: avoid consumer debt like the plague. It's perfectly OK to borrow to purchase a home or a car if you need to, but avoid credit whenever you can. Carrying balances on revolving accounts (e.g. credit cards) will destroy your finances.
(September 16, 2014 at 2:34 pm)Exian Wrote: The thing that really chaps my ass here in 'Murcia is the lack of education we receive on managing money. At some point during or after highschool it's sink or swim. The rules that applied to my parents generation do not apply to mine. I always heard: "The value on a house only goes up!" So in 2006 I bought my first house....two years before 2008 happened. Still recovering from that.
What they neglected to tell you was that it's "over the long term", and that was true in your parent's generation, and their parent's. 2006-2008 is not long term. Between 2008 and 2010, according to the county tax assessor, I lost nearly $200K in value on the house my ex and son now inhabit (I bought it in 2003). Despite that, I've still got a modest rate of return (but fuck, I wish I would have sold in 2007).
Homes are a long-term investment. Pick any 20- or 30- year time frame in history since such records have been kept and you'll see that it's true. (The same is true of stocks, believe it or not, even accounting for the worst debacles like 1929 and 2000.) Conversely, people who buy real estate (or stocks) for short-term gains are taking huge risks.
