At the conclusion of a report by the Pew Charitable Trusts, where they examined debt through the generations, they found that 8 in 10 Americans are in debt in some fashion.
Wow I could have told them that and they could have saved the money. These roughly match the stats of my client base. Now most often the debt is because of a mortgage. They also found that the debt issue is not limited to young people starting out life.
Most of my clients are considered the wealth by governmental standards being in the top 10% of all taxpayers. But between mortgages, auto loans, student loans (theirs and their kids), credit cards they are living paycheck to paycheck. SO it is not surprising that increasingly, people are carrying debt into retirement.
According to the report for many Americans, their debt is a burden, but others view it as a necessity. Again, another no brainer. Some 69 percent of the survey respondents indicated that while nonmortgage debt was a necessity for them, they preferred not to have it. But 68 percent said loans and credit cards had enabled them to make purchases or investments that expanded their opportunities. I am sure, I have clients paying interest on vacations for a few years ago still.
Not surprising is that The Pew found that higher-income people with more assets tended to have more debt. Running a business on cash flow is not always easy. But even so, they had healthier balance sheets than low-income, low-debt respondents.
Debt can be a way to leverage yourself for growth. It can be a positive thing. Or for the wrong reasons it can be a weight around your neck. For a review of your personal Balance Sheet give the office a call to schedule an appointment.