What would the perfect personal finance book consist of?

[Ron Hitson]

My background is Finance. I studied Finance in college and I really want to create digital products for people that want to master their finances.

I'd like to create software, audios, videos, ebooks and maybe a forum.



What types of products would you buy or who are your favorite financial experts?

[moonrambler]

This is a great question and I have an answer

After I had gotten myself into a giant pile of debt and everything was a big giant mess, I began a mission to make more money. I needed help in several other areas too, such as how to deal with the creditors. I found some excellent help about how to deal with creditors, but I could not find anyone writing about how to make more money. There's a lot of emphasis on cutting spending, not using credit cards, creating a payment plan and so on, but my situation was not going to be helped by much of that. I needed more money. So even now, a couple years later, I look forward to it when I hear there's going to be a radio program, for instance, about improving one's financial situation, and every single time I'm disappointed because they go on about disconnecting the cable and so on, but don't discuss the fundamental problem of lack of adequate income, and even the fundamental problem about all the psychological gunk behind the inability to create abundance.

[stewartM]

Originally Posted by Ron Hitson

What types of products would you buy or who are you favorite financial experts?

I love Alvin Hall's books and programmes...

[doablefinance]

Hi Moonrambler

You are absolutely right.

The problem is that most folks are living under the burden of
heavy debt. Some is created by external forces like lack of better
job, less money coming in. But an overwhelming number spend more
than they make. Some say there is psychological problem behind it like
fear, anxiety, depression, "I gotta have it because the Joneses have it."

In that case, no matter how much money you make (Ed McMahon, Barry White, Isaac Hayes) you will always have problems created by yourself.

Lindsay Lohan had more than $700,000 credit card debt up until a month or so ago. It's not that folks like that don't make enough but the way they live their financial life gets them into debt trouble.

Wisely Snipes made millions but he had problems with IRS. Where did the money go? He blamed it on his money manager. Ed McMahon blamed himself the way he was partying and all. At the end, he could not make his mortgage payments. And he was making more than $5 million a year.

You can never make enough money. It's always a problem. But handling money properly is a much bigger problem.

[moonrambler]

Originally Posted by doablefinance

In that case, no matter how much money you make (Ed McMahon, Barry White, Isaac Hayes) you will always have problems created by yourself.

I totally know what you mean. And that's more psychological gunk. And there can be an attitude of, "I know any second now I will be making so much money I can clear up all this debt," even when the problem should be obvious.

Nevertheless -- I could not find anything anywhere that adequately addressed my own particular problem. I found one book that discussed the concept of "under-earners," but didn't really offer me a whole lot of practical advice on what to do about it.

[Brutha]

I think that a book about investing into local companies instead of investing into the stock market has a good chance of becoming a best seller.

[SnerpGoodWord]

Originally Posted by Ron Hitson

My background is Finance. I studied Finance in college and I really want to create digital products for people that want to master their finances.

I started a somewhat similar thread here a week or so ago investigating the idea of an advanced finance blog. Not exactly the same idea, but similar topics came up.

Once of the conclusions I reached from that discussion is that for the biggest block of would-be readers, what they needed to do was spend less, and use the resulting surplus to pay off unsecured debt. I question then whether digital products (as in something you buy) are the solution - "buy this e-book about spending less" seems a tad disingenuous to me. It seems that what such people need are free resources only - they're already well beyond broke.

The second conclusion I reached is that frankly the advice these people "need" is so obvious that anyone with an IQ above room temperature could figure it out on their own. Need to spend less? How about figuring out what you're spending money on, rank it from most to least important, cut out the unimportant stuff, and look for ways to cut back on the rest. Seems pretty obvious. Thus it appears that, at least for this audience, the reason they have failed to act in their own interest is not because they don't know how but because they don't want to.

What they need is not yet more information on finance, but a swift kick in the ass from their creditors.

[Angela]

I think the perfect financial book would consist of pages made of intact thousand dollar bills.

[Mounds]

Originally Posted by SnerpGoodWord

The second conclusion I reached is that frankly the advice these people "need" is so obvious that anyone with an IQ above room temperature could figure it out on their own. Need to spend less? How about figuring out what you're spending money on, rank it from most to least important, cut out the unimportant stuff, and look for ways to cut back on the rest. Seems pretty obvious. Thus it appears that, at least for this audience, the reason they have failed to act in their own interest is not because they don't know how but because they don't want to.

What they need is not yet more information on finance, but a swift kick in the ass from their creditors.

Hey Snerp,

I tried going over this with you in your other thread...

Money is heavily based in psychology. It's embarrassing for many people to talk about it, it's easy to bury your head in the sand thanks to credit and many people think they know how to handle money when they in fact don't.
Every person with an IQ above room temperature understands the concept of spend less than you earn. And yet people continuously go into debt. Are all of those people morons? Nope. They just haven't been taught in a way that they can make sense of it.
If you can, check out the show "Till Debt Do Us Part". You'll quickly see what I mean about the psychology behind money. Every couple thinks they know what they're doing and everyone of them is shocked to find out that they don't know. Some of them spend triple what they actually earn per month, using credit cards. Once they're in the hole, they don't know what to do. You could easily write about that and help people.

Ron, what people need is to hear about situations that apply to them. Any financial "expert" can say, "Spend less than you earn and make more money". I will once again praise Ramit Sethi from I Will Teach You To Be Rich. I'm using his techniques to rocket out of debt, invest money and build savings. I've done it for seven months now and paid down over $10k in debt. Thats the kind of writing that's going to get an audience (see Moonrambler's comments as well). Write something that the average joe can work with.
IMO, money is 25% crunching numbers/processing information and 75% psychology. When I talk to my financial planner, it's 100% crunching numbers/processing information. Guess what? My eyes glaze over, I start daydreaming and I walk out of the bank in a daze. What's interesting to him is boring to me. I don't really want to hear definitions of what inflation and hedging are. I want to know why thats important to me. I want to make money and I want to reduce debt. Show me how I can do it in a way I can understand. If I like what I hear, I will give you money to hear more. Plain and simple.
Right now on Ramit Sethi's site, he's devoted this year to making more money. Lots of posts about creating alternative incomes. Once again, 75% psychology. Time management, destroying barriers, coming up with an idea. When it comes to saving money, same thing. Destroying barriers, how to negotiate, why paying yourself first is a good idea and not just something you should do. I've read some dry personal finance books that gave me absolutely nothing and took hours off my life. I read his book and my life changed.
Anyhow, I'm done! Hope that helps

-Tim

[moonrambler]

Originally Posted by SnerpGoodWord

The second conclusion I reached is that frankly the advice these people "need" is so obvious that anyone with an IQ above room temperature could figure it out on their own. Need to spend less? How about figuring out what you're spending money on, rank it from most to least important, cut out the unimportant stuff, and look for ways to cut back on the rest. Seems pretty obvious. Thus it appears that, at least for this audience, the reason they have failed to act in their own interest is not because they don't know how but because they don't want to.

What they need is not yet more information on finance, but a swift kick in the ass from their creditors.

Good grief. I went looking for the thread to see why I hadn't taken an interest in it, and it's like Mounds is saying here, and what you said there -- that you have a fundamental disconnect from your target audience. Either that or you have the wrong target audience in mind.

Looking for solutions to my problems, I sure wouldn't want to be reading a blog by somebody who thinks I have an IQ below room temperature!

The entire system is designed to get people in as much debt as they can get into while still being able to make payments. And I don't understand all the psychology about why people jump in and do that. I only know what my own psychology was, and I had a very hard time getting anyone to relate to it here, because I was spending all my time in the IM forum, where people kept insisting I was in this situation because of an attitude of "lack" and no attitude of abundance and negative thoughts and so on. Instead, I came to see that my problem was a combination of complete ignorance about finances, and complete over-optimism about "tomorrow." I absolutely believed that tomorrow I was going to suddenly turn everything around and I could pay everything off, poof. I was a credit junkie. I don't even know why. I remember iampaul99 talking about how some people are incredible manifestors of money, except they can only do it with credit. They manifest more and more and more credit. I went, hey, that's ME!

I could get psychiatric and say it's my parents' fault. I rebelled against their frugality and went nutso. I really don't know. There came a point, however, where I literally could not spend less without going and living in my car. So all the talk about spending less was useless at that point. And I was going, I'm tired of spending less! I want to spend MORE! I want to go out to lunch again, I want to buy sandals again (channeling Private Benjamin), I want to see the Eagles again! But I want to do it with my own cold hard cash, not with credit! Somebody tell me how to make some money!

In any case, back to the point about the system, the system is designed to get everybody to buy everything on credit and pay boatloads of interest. When you're young and ignorant, it looks like free money. And you keep making your payments, and companies keep sending you cards, and there you are.

I think it's hysterical when I hear people fussing about their credit rating. My credit rating is something like -2,758. Nevertheless, in one of my recent discussions with AmEx, where the dude was offering me a ridiculously-low debt settlement amount, he said if I took that offer they would be happy to send me a new credit card. I almost yelled, "Are you crazy?!" Of course not. It's me who's crazy, and they know that.

The site Mounds linked to is right. People don't want "financial literacy." I laughed out loud at the "Aw ****" arrow. I want lots of money coming in so I don't have to look at a budget. A budget! Blech. I want to set up automatic payments for everybody I owe money to and know exactly how much money I need to put in my checking account once a month to cover all that and be done with it. From there, I can set a certain amount aside for future endeavors and a certain amount aside for stuff that people so often use credit for, like if the washing machine breaks down, and the rest is mine for now. Wait -- that's a budget! But it's not a budget like they have you looking at spreadsheets and junk and tracking your every damn purchase. Yecch. It's just simple. It's the way rich people live. They don't enter on the spreadsheet that they bought a freakin' candy bar and I don't want to have to live that way either. I want lots and lots of income, and I want to not buy stuff on credit.

[moonrambler]

Originally Posted by Angela

I think the perfect financial book would consist of pages made of intact thousand dollar bills.

Absolutely!

[moonrambler]

Here's another thing. I think there's a prevalent prevailing attitude that money is a bad thing. People who don't have much money view money with disdain even while saying they want lots of it. That was one of my things and I never saw the disconnect until the past couple of years. This is easy to uncover. Start a conversation about whether it's ok to just like money for the sake of having money and spending money, and watch the negative responses pour in. People will even talk about how a blog can't be successful unless the person is not doing it for the money!

I did such a 180 on my prior attitude that I got to having fun jumping into these discussions and expressing my fondness for money just because I like counting it out and smelling it

[Mounds]

Originally Posted by moonrambler

I want lots of money coming in so I don't have to look at a budget. A budget! Blech. I want to set up automatic payments for everybody I owe money to and know exactly how much money I need to put in my checking account once a month to cover all that and be done with it. From there, I can set a certain amount aside for future endeavors and a certain amount aside for stuff that people so often use credit for, like if the washing machine breaks down, and the rest is mine for now. Wait -- that's a budget! But it's not a budget like they have you looking at spreadsheets and junk and tracking your every damn purchase. Yecch. It's just simple. It's the way rich people live. They don't enter on the spreadsheet that they bought a freakin' candy bar and I don't want to have to live that way either. I want lots and lots of income, and I want to not buy stuff on credit.

Can I get a hallelujah!?!

Moonrambler, when you start making tons of money on a side project, be sure to tell your story. If I get there first, I'll tell you mine

I did such a 180 on my prior attitude that I got to having fun jumping into these discussions and expressing my fondness for money just because I like counting it out and smelling it

I'm the same way. I love money. Not that I love spending it, I just love counting it, holding it, checking up on it, ect.

[moonrambler]

Originally Posted by Mounds

Can I get a hallelujah!?!

Moonrambler, when you start making tons of money on a side project, be sure to tell your story.

I actually have started making more money than I ever did before by writing web content, something that I didn't even know about except that it was mentioned here on this forum when I was wailing about my situation back in 2008. And that's something that people can do as a side project -- it's being talked about in another thread here now somewhere called HUGE Opportunity for Writers. It has a learning curve, and that can drive people off, because they are probably not going to start making a high hourly rate right from the get-go. Which is probably another topic for the finance book.

There are all sorts of things people can do to make money on the side, although the people really do have to be willing to maybe get bored sometimes and tired sometimes, and a lot of people simply are not willing. And we can get hung up on idealistic ideas like "Do what you love, the money will follow" and so on, but in the meantime, doing something like tending bar at a place where people make very good tips is an excellent option, one that a friend of mine does. People say, "I can't work for $8 an hour," but he's bringing home an extra $50 in tips a night.

[Mounds]

Thats pretty awesome Moonrambler! I've looked into those writing sites before but the offer wasn't available in Canada. I might try this one, see how it goes. Even a low hourly rate is better than nothing.

[Brutha]

If you write a book with an "average audience" in mind you are going to have a problem.
To quote Nassim Taleb:
Truck drivers who read books don't want to read books that are written for truck drivers.

[SnerpGoodWord]

Originally Posted by moonrambler

Good grief. I went looking for the thread to see why I hadn't taken an interest in it, and it's like Mounds is saying here, and what you said there -- that you have a fundamental disconnect from your target audience. Either that or you have the wrong target audience in mind.

Looking for solutions to my problems, I sure wouldn't want to be reading a blog by somebody who thinks I have an IQ below room temperature!

To be clear, what I was saying is that I believe there is a dichotomy at work - in other words, I don't think you (or many people in growing debt) are unintelligent, but rather that you chose not to apply your intellect to your problem. Whether that choice was conscious or not I don't know.

When you get right down to it, balancing your financial life is not rocket science. The principles are pretty obvious and the math is easy. I contend that any intelligent person, if they diligently applied their intellect, would come up with a solution to their debt problems that was as good as any a personal finance book can provide, and better suited to the unique aspects of their instance of the problem.

What people who are reasonably intelligent and in debt need, then, is something between a pep talk and a kick in the rear. They need motivation to apply their intellect to the problem, because if they do they will probably succeed.

On the other hand, finance for the portion of the population that is not in debt is a more interesting question. There, instead of being one right answer (pay off unsecured debt) there are a large number of successful strategies one might adopt, and even more ones that will likely lead to failure. The problem is no longer tractable with intellect alone - you need information too and lots of it. I think people in debt tend to trivialize finance because it IS easy for them. But that doesn't mean everyone else is in the same situation.

Of course, since the majority of the target market for finance information is in debt, you've got a bit of an absurd situation: a market of people looking for something they don't really need and won't really benefit from.

[codefreeze]

Well, I happen to think it's already been written, or at least it's pretty darn close to perfect. "Your Money or Your Life" by Joe Dominguez. It helped me a lot (and many others). I just wish I'd had this book when I was starting out. Having said that, when I was starting out I probably would have ignored the book. You need to have been through the financial wrangler once or twice before you "get" the deep wisdom in this book.

If you're interested I wrote a little blurb about it recently here:

5 Books That Changed My Life - Regards from the Balcony

Hope that helps!

[moonrambler]

Originally Posted by SnerpGoodWord

To be clear, what I was saying is that I believe there is a dichotomy at work - in other words, I don't think you (or many people in growing debt) are unintelligent, but rather that you chose not to apply your intellect to your problem. Whether that choice was conscious or not I don't know.

When you get right down to it, balancing your financial life is not rocket science. The principles are pretty obvious and the math is easy. I contend that any intelligent person, if they diligently applied their intellect, would come up with a solution to their debt problems that was as good as any a personal finance book can provide, and better suited to the unique aspects of their instance of the problem.

What people who are reasonably intelligent and in debt need, then, is something between a pep talk and a kick in the rear. They need motivation to apply their intellect to the problem, because if they do they will probably succeed.

What I'm saying is it's not a problem of intellect. It's a problem of psychology. And I think that's why all the intellectual advice in the world doesn't work for such a large number of people.

We could say the same for people who get in the same type of bad situations in their personal lives over and over. Would you say a person who can't stop drinking should apply his intellect to the problem, because it's not rocket science? It's easy! You just stop buying booze and drinking it!

[codefreeze]

Originally Posted by moonrambler

...
There came a point, however, where I literally could not spend less without going and living in my car. So all the talk about spending less was useless at that point. And I was going, I'm tired of spending less! I want to spend MORE!
...
But it's not a budget like they have you looking at spreadsheets and junk and tracking your every damn purchase. Yecch. It's just simple. It's the way rich people live. They don't enter on the spreadsheet that they bought a freakin' candy bar and I don't want to have to live that way either. I want lots and lots of income, and I want to not buy stuff on credit.

OK I'm gonna throw in my two cents worth here

First, I hear you. You want more money.

Here's the only way I know how to make more money - make yourself more valuable.

If you are employed ask yourself this question: "How can I make myself more valuable to my employer?"

If you have a business ask yourself this question: "How can I provide more value to my customers?".

If you ask yourself the question "How can I get more money", you will probably fall victim to the "get rich quick" scammers.

You start on the bottom rung and learn and improve and work your way up (whether you are in business or not). There aren't really any short cuts. Work hard. Work smart. Build your skills. Become an expert. Solve problems. Have a positive attitude. Learn your trade. Get better qualified.

You will make more money.

It takes time to increase your value, or the value you can generate. It doesn't happen overnight. If you want a quick way to earn more money take a second job, rob a bank, or win the lottery.

The second point I'd make (and has already been made), is that it *is* about what you spend. I know people on high six figures who are deep in debt.

The thing is if you don't know how to manage money and control your spending then earning more money doesn't solve the problem - you just spend more!

However, I do agree that there comes a point where it is hard to lower your expenses any more - but that point is a lot lower than people think it is!

So in summary:

1) Learn how to budget and manage your expenditure.
2) Make yourself more valuable to your employer or customers.

Hope that helps!

[moonrambler]

Originally Posted by codefreeze

OK I'm gonna throw in my two cents worth here

First, I hear you. You want more money.

Here's the only way I know how to make more money - make yourself more valuable.

If you are employed ask yourself this question: "How can I make myself more valuable to my employer?"

If you have a business ask yourself this question: "How can I provide more value to my customers?".

If you ask yourself the question "How can I get more money", you will probably fall victim to the "get rich quick" scammers.

You start on the bottom rung and learn and improve and work your way up (whether you are in business or not). There aren't really any short cuts. Work hard. Work smart. Build your skills. Become an expert. Solve problems. Have a positive attitude. Learn your trade. Get better qualified.

You will make more money.

It takes time to increase your value, or the value you can generate. It doesn't happen overnight. If you want a quick way to earn more money take a second job, rob a bank, or win the lottery.

This information expanded would make a good chapter in the finance book. Or maybe a good several chapters. I'm not so sure many people get that they can make themselves exceedingly valuable to an employer.

I told a story in another thread about how years ago I was doing word processing on a temp basis for one particular company, long-term projects. I learned early on in my work life that if I made myself very valuable to my employer, they would do some favors for me like let me have extra time off, maybe a more flexible schedule, and so on. So I have always gone at my jobs with this attitude, including this word processing gig. Well, when one of these long-term assignments ended, for various reasons I wasn't so sure I wanted to go back there again. And when the HR director called and asked me to come back, I said I couldn't unless they paid me $XX and I named a figure I assumed they would never pay. And he just automatically said, "Okay."

This has happened with my web content writing too. I started in late 2008 making a certain pay rate per article and now less than two years later I'm making 40 percent more.

The second point I'd make (and has already been made), is that it *is* about what you spend. I know people on high six figures who are deep in debt.

This is the sticky part. First off, there are like 10 zillion books and blogs on how to spend less and make budgets and all that. Yet we have people on high six figures deep in debt. A country jammed with people way far in debt. Why is that? Telling people to spend less and make budgets does not seem to be working all that well.

Just last night I saw on my Facebook that the daughter of one of my cousins made a post that said simply, "How do I make more money?" And what she got was joking responses, like "win the lottery?" And then her mom, probably embarrasingly, wrote a big post on her wall about . . . wait for it . . . spending less! Now maybe this girl DOES have a problem with spending too much. But all she asked was, "How do I make more money?" And nobody could be bothered to answer the question.

I e-mailed her and answered her question. Maybe some other people did too. I hope so. After my experiences, I kind of doubt it.

[moonrambler]

(ninja posting )

Let's try this. Let's take an average person, say, age 30, who's still paying off student loans and has a car loan too, and this person has managed to rack up $10,000 in credit card debt over the past seven years. I imagine this is not hard to do if a person only pays the minimum balance and has two or three cards. Where do you begin telling this person how to cut spending?

[Mounds]

I like what your saying there Codefreeze. Gonna keep hammering on this though... psychology. IMO, that's 75% of personal finances.
Some people are just naturals. For instance, my uncle. He is almost robotic with his finances. He trims the fat without mercy and saves like mad. There is literally no emotion going into his finances. Only cold calculations.
For a lot of people though, it's not like that. We have to use principles like "pay yourself first", automatic banking, we read our negotiations off of scripts. Many of us don't even realize that there are mental blocks to destroy.
A spot where it's very obvious is when people talk about making more money. Everyone has ideas. I've got a dozen of them. It's incredibly difficult to make that shift from having an idea to actually contacting prospects and doing the work. A few common mental barriers:

"My works not good enough..."
"No one will pay that much!"
"It will never work..."
"Do I really want to give up that time?"

After that rigmarole, most people are ready to lay on the couch and watch American Idol. Psychology 1, money 0.
A book on destroying barriers to finances would be one of the most valuable PF books around, IMO. I rave about Ramit Sethi for this reason. His book did a little bit of this and my life changed. Who knows what an entire book could do?
Imagine that your financial habits could change with ease and stay changed. Imagine you simply went for it when an opportunity came up to make more money. That in combination with the fundamentals of money can turn anyone into a financial dynamo.
Good discussion, gets me thinking about things a lot

-Tim

[Mounds]

Originally Posted by moonrambler

(ninja posting )

Let's try this. Let's take an average person, say, age 30, who's still paying off student loans and has a car loan too, and this person has managed to rack up $10,000 in credit card debt over the past seven years. I imagine this is not hard to do if a person only pays the minimum balance and has two or three cards. Where do you begin telling this person how to cut spending?

I've just got the solution: make more money

If I destroy my mental barriers for writing about it, I will elaborate

[Agota]

First name that popped up in my mind when I read the question was Ramit Sethi.

He wrote a post about changing people's behaviour, just check the latest entries in this blog - I think his insights will be really valuable to you especially if you want to start a career in personal finance. There is a reason why his blog is so popular and why his book is a New York Times bestseller -Ramit understands his audience and gives advices that solve particular problems, not the general "spend less than you earn".

Narrowing your niche to specific audience that you understand is also a great thing - Ramit is young and it's easy for him to get young people, so he's mainly writing for 20-somethings or people in early 30ies, and as we see that works out great. What audience do you know and understand really well?

I believe if you want to create successful personal finance products, try to study most successful personal finance blogs and products and learn what approach to personal finance they have that makes them so successful. It doesn't mean being a copycat - the same way if you would want to start personal development blog, Steve's success would be a great thing to study and you could apply the things that made him successful (..doing public experiments for example) in your business. Actually, you could study Steve's blogging to make your finances blog/products more successful.

And I think that someone made a great point here - people don't want to spend less, they want to spend more! That's what everyone wants to hear so you could focus on that.


Just my two cents

[SnerpGoodWord]

Originally Posted by moonrambler

What I'm saying is it's not a problem of intellect. It's a problem of psychology. And I think that's why all the intellectual advice in the world doesn't work for such a large number of people.

We could say the same for people who get in the same type of bad situations in their personal lives over and over. Would you say a person who can't stop drinking should apply his intellect to the problem, because it's not rocket science? It's easy! You just stop buying booze and drinking it!

I'm not sure the analogy to addiction is apt - it seems to walk away from personal responsibility to an unreasonable degree. Replace "the booze made me do it" with "the credit card made me do it". Doesn't really ring true IMO.

I honestly don't know what if anything can be done for people who know they have a problem, and know what the solution to the problem is, but still choose not to act. It seems to me that they must, strange as it seems, subconsciously like the problem.

[SnerpGoodWord]

Originally Posted by moonrambler

(ninja posting )

Let's try this. Let's take an average person, say, age 30, who's still paying off student loans and has a car loan too, and this person has managed to rack up $10,000 in credit card debt over the past seven years. I imagine this is not hard to do if a person only pays the minimum balance and has two or three cards. Where do you begin telling this person how to cut spending?

This individual sounds deeply bankrupt if they have no assets other than the car - it may make sense for them to file.

That said, if analysis says it's worth avoiding bankruptcy, you would do a voluntary repo of the car, buy a cheap used car (or switch to transit if feasible), cut discretionary spending to basically nothing, and then re-think food and housing. Get a smaller place, etc.

[moonrambler]

Originally Posted by SnerpGoodWord

I'm not sure the analogy to addiction is apt - it seems to walk away from personal responsibility to an unreasonable degree. Replace "the booze made me do it" with "the credit card made me do it". Doesn't really ring true IMO.

I honestly don't know what if anything can be done for people who know they have a problem, and know what the solution to the problem is, but still choose not to act. It seems to me that they must, strange as it seems, subconsciously like the problem.

You've never experienced this for yourself, have you?

It's not that the credit card "makes" them do it. It's that the credit card makes it enormously easy.

They may not subconsciously "like" the problem, but they may subconsciously have a reason they are creating the problem. For instance, as I mentioned previously, they may actually despise money. Credit doesn't necessarily seem like money. Additionally, building up a mountain of debt may be an unconscious way to make sure they'll never have any money!

Originally Posted by SnerpGoodWord

This individual sounds deeply bankrupt if they have no assets other than the car - it may make sense for them to file.

Why? Why should they take this huge step of filing for bankruptcy, when instead they could learn to make more money? They could work out a no-interest deal with their credit card companies and pay it off with the extra cash they start making.

That said, if analysis says it's worth avoiding bankruptcy, you would do a voluntary repo of the car, buy a cheap used car (or switch to transit if feasible), cut discretionary spending to basically nothing, and then re-think food and housing. Get a smaller place, etc.

Have you tried to find a cheap used car lately? Where is the person going to get the money for a cheap used car? Additionally, the vast majority of towns do not have sufficient mass transit.

What are some examples of discretionary spending?

What if the person already has a reasonably-sized apartment?

[SnerpGoodWord]

Originally Posted by moonrambler

You've never experienced this for yourself, have you?

No - I'm financially responsible unlike a lot of people and I've never seen any reason to pay high interest on unsecured debt. It's just a dumb thing to do. At best it will cost you decades of your financial life.

It's not that the credit card "makes" them do it. It's that the credit card makes it enormously easy.

That's a cop out, and you know it

Why? Why should they take this huge step of filing for bankruptcy, when instead they could learn to make more money? They could work out a no-interest deal with their credit card companies and pay it off with the extra cash they start making.

Now your story doesn't make much sense. Either the situation's really dire, or it isn't. If you have enough cash to wait around "learning" to make more money, they also have enough cash to buy a cheap used car (see below).

Have you tried to find a cheap used car lately?

Yes.

Where is the person going to get the money for a cheap used car?

The same place they got the cash flow not to have to declare bankruptcy right away.

What are some examples of discretionary spending?

Now you're intentionally failing to use your intellect. I'm pretty sure you don't really need me to explain the difference between unavoidable spending and discretionary spending.

What if the person already has a reasonably-sized apartment?

Something's got to give here. What you think is "reasonably sized" and what your budget can support may not be the same thing.

Frankly you seem like you like making excuses.

[moonrambler]

What I'm doing is pointing out the fundamental disconnects of why most books and blogs for helping people get out of debt don't seem to be working. Many of the people who really need this help are not able to relate that well to comments like "It's just a dumb thing to do." Well, of course it's a dumb thing to do. But then why do smart people do it?

You said it can't be that "the credit card made me do it." I replied by saying the credit card makes it enormously easy, and you say that's a cop-out? What sort of answer would you prefer? That the credit user is stupid?

Originally Posted by SnerpGoodWord

Now your story doesn't make much sense. Either the situation's really dire, or it isn't. If you have enough cash to wait around "learning" to make more money, they also have enough cash to buy a cheap used car (see below).

There's no cash to "wait around" learning to make more money, and no cash to buy a cheap used car. You say you've gone shopping for a cheap used car lately -- what do they cost? A cheap car that isn't going to need continuous repair work?

The same place they got the cash flow not to have to declare bankruptcy right away.

So which bills do you suggest they not pay with this cash flow in order to buy a cheap used car?

Now you're intentionally failing to use your intellect. I'm pretty sure you don't really need me to explain the difference between unavoidable spending and discretionary spending.

I specifically asked earlier for somebody to list some items that my imaginary individual could eliminate from the budget. So far nobody has done so, except you said to do a voluntary repo of the car (which brings in no money and may result in still owing money) and then using some non-existent extra money to buy a cheap used car.

Something's got to give here. What you think is "reasonably sized" and what your budget can support may not be the same thing.

Frankly you seem like you like making excuses.

I am absolutely not making excuses. I am saying there comes a point that unless declaring bankruptcy, a person has to a) move into a much less desirable living situation, or b) start making more money.

It is fascinating to me that the idea of making more money just does not seem to work for you for my imaginary individual!