DEBT MANAGEMENT

One Reason Why So Many

Americans Are in Debt

A recent study said that 21 percent of Americans see winning a major lottery as an important wealth building strategy and even part of their retirement plan.

Almost as bad, another 14.9 percent of Americans are relying on an inheritance as part of their retirement plan or wealth-building strategy and paying attention to any money saving tips.

One must have some sort of occupation nowadays. If I hadn't my debts I shouldn't have anything to think about.
— Oscar Wilde

In debt big time? Problems like this don't just sneak up on you. If your debt is not your fault, you won't take responsibility for it. If you won't take responsibility for it, you will always be its victim.
— from Zen I Got Rich: The Prosperity Guide
the Universe Forgot to Give You by E.Z.

This is amazing. Let's put this in proper perspective: The odds of winning the Mega Millions Jackpot are said to be one in 175 million. So a handful of individuals in one's life time will win a major lottery and so many people are relying on themselves being one of these individuals. Frankly, these people are idiots.

What's more, of the 20 percent of Americans who will inherit some money, most will receive less than $50,000 in cash. Enough to buy a nice new car, perhaps, but certainly not enough to fund a comfortable retirement.

Sadly, literally millions of Americans are relying on gambling and death to secure their financial futures so that the can retire in style. Instead of working harder to make more money and being smart enough to save at least 15 to 20 percent of their earnings, they continue to spend and accumulate debt. Is any wonder that most Americans will be looking for a retirement job, but most won't be able to find one.

Not very bright, is the way I look at it.

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Millions of American Retirees Are in Debt Big-Time and Don't Intend to Pay It Off

A recent survey (November 2010) by CESI Debt Solutions discovered that millions of American retirees have piled up huge debt loads which they have no intention of ever paying off.

This shows how much integrity there is in the USA today, wouldn't you say. If you won't say it, I certainly will. If you are wondering why the U.S. is in such a deep financial crisis, this is just one of the many reasons. Debt certainly won't be part of my retirement plan simply because accumulating debt is a sure-fire way of how not to retire rich.

Apparently close to 40 percent of American retirees responding to the survey stated that they continue to pile up credit-card debts which they don't ever plan to repay.

"At the end of the day," claimed Neil Ellington of CESI, "some people of a certain age say, 'It's too late in the game for me to do anything about it. I can't win. So I'm just going to stop playing the game,'"

Many seniors have seen their retirement accounts cut in half by the recession and are running out of time to do anything about it, he said.

Interestingly (or shockingly) over 50 percent of the American retirees surveyed admitted that they had saved less than $50,000 for retirement — some had saved nothing at all — but had decided to retire anyway.

Only 4 percent of Americans of retirement age agreed that they had delayed retirement due to their debt load.

More than 75 percent of the American retirees with significant debt loads said they accumulated their debt for medical or funeral expenses. I would say this may be part of the reason but upon close investigation, the truth would indicate that these retirees also didn't manage their money well during their working years.

By going into debt and having no intention of paying off this debt, most of these American dead-beats think that they are protecting their children from their financial problems. But as CESI warned, the retirees' debts must eventually come out of their estates — that is if they have anything left in their estates when they die.

Reasons Why So Many Canadians

Are in Debt

Not to be outdone by Americans, more and more Canadians are showing that they are also fools with their money and that is why they wind up in debt.

Here are some of the signs that Canadians are not spending money wisely.

1. According to a recently released Statistics Canada study, almost half of Canadian households spend more than their pretax income in a given year. That's up from 39 per cent in the early 1980s. From 1982 to 2001, the study found, per capita debt doubled, because of sharp increases in both mortgages and consumer debt. 
2. 67 percent of Canadians say money is their most frequent worry. 
3. Only 40 percent of Canadians know how many millions are in a billion. 
4. Still worse, only 25 percent of Canadians know the difference between the National debt and National deficit. 
5. According to Desjardins Financial security's latest retirement study, many Canadians are not prepared for the challenges retirement can bring. They are failing to consider a variety of factors and risks that can have an impact on the yield and longevity of their savings, such as inflation, rising life expectancies and healthcare costs. Nearly 60% of those surveyed are not concerned about having a large enough nest egg to sustain their standard of living in retirement. More than 80 percent have not eliminated their consumer debt in retirement and even more are not concerned about paying off their mortgages (88 percent). And more than half are not worried that inflation will erode their savings.
   

Debt Management: 

Top-10 Ways to Stay Debt Free

Above all, take 100 percent — 99 percent won't do — responsibility for your life. Never blame anyone but yourself for your money problems. You are to blame and no one else. Unless you accept this fully, you will have money problems.

Debt Managment Resources

• Debt Management Tips for Seniors: By Aleksandra Todorova. No one wants to spend his or her golden years struggling with credit-card debt.

• Retirement: The Golden Age of Debt: "More of us are retiring in the red. This is not a good idea." from MoneySense magazine. 

Top-10  Pieces of Advice Anybody Ever Said about Debt and How to Get Out of Debt 

#1 Piece of Financial Advice about Debt Management

Who pays his debts, gets rich.
— French proverb

#2 Piece of Financial Advice about Debt Management

He that has not bread to spare should not keep a dog.
— Chinese proverb

#3 Piece of Financial Advice about Debt Management

The saving man becomes the free man.
— Chinese proverb

#4 Piece of Financial Advice about Debt Management

You can't put your VISA bill on your American express card.
— P. J. O'Rourke

#5 Piece of Financial Advice about Debt Management

He who borrows gets sorrows.
— Turkish proverb

#6 Piece of Financial Advice about Debt Management

No man's credit is as good as his money.
— Ed Howe

#7 Piece of Financial Advice about Debt Management

If you borrow money to make money, you've done something magical. On the other hand, if you go into debt to pay your bills or buy something you want but don't need, you've done something stupid. Stupid and short-sighted and ultimately life-changing for the worse.
— Seth Godin

#8 Piece of Financial Advice about Debt Management

The payment of debts is necessary for social order. The non-payment is quite equally necessary for social order. For centuries humanity has oscillated, serenely unaware, between these two contradictory necessities.
— Simone Weil (1909-43), French philosopher, mystic. "On Bankruptcy".

#9 Piece of Financial Advice about Debt Management

It is very iniquitous to make me pay my debts — you have no idea of the pain it gives one.
— Lord Byron (1788-1824), English poet. Letter, 26 Oct. 1819 (published in Byron's Letters and Journals, vol. 6, ed. by Leslie A. Marchand, 1973-81).

#10 Piece of Financial Advice about Debt Management

It is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay.
— Ralph Waldo Emerson (1803-82), U.S. essayist, poet, philosopher. Essays, "Gifts" (Second Series, 1844).

More Financial Advice about Debt Management 

Blessed are the young, for they shall inherit the national debt.
— Herbert Hoover

The Lord forbid that I should be out of debt, as if, indeed, I could not be trusted.
— François Rabelais

Debts increase by arrears of interest.
— Livy

It is very iniquitous to make me pay my debts — you have no idea of the pain it gives one.
— Lord Byron

No matter how a dun is addressed, it always reaches you.
— Kin Hubbard

Beautiful credit! The foundation of modern society. Who shall say that this is not the golden age of mutual trust, of unlimited reliance upon human promises? That is a peculiar condition of society which enables a whole nation to instantly recognize point and meaning in the familiar newspaper anecdote, which puts into the mouth of a distinguished speculator in lands and mines this remark:— "I wasn't worth a cent two years ago, and now I owe two millions of dollars."
— Mark Twain (1835-1910), U.S. author. The Gilded Age, ch. 26 (1873; written with Charles Dudley Warner).

Blest paper-credit! last and best supply!
That lends corruption lighter wings to fly!
— Alexander Pope (1688-1744), English satirical poet. Epistle to Bathurst.

Creditor. One of a tribe of savages dwelling beyond the Financial Straits and dreaded for their desolating incursions.
— Ambrose Bierce (1842-1914), U.S. author. The Devil's Dictionary (1881-1906)

America unquestionably has the highest standard of living in the world. Too bad we can't afford it.
— Unknown wise American

One thing America isn't running out of is debts.
— Unknown wise American

America is rapidly proving to be a place with two cars in every garage — and none of them paid for.
— Unknown wise American

O Gold! I still prefer thee unto paper,
Which makes bank credit like a bark of vapour.
— Lord Byron (1788-1824), English poet. Don Juan, cto. 12, st. 4.

A creditor is worse than a slave-owner; for the master owns only your person, but a creditor owns your dignity, and can command it.
— Victor Hugo (1802-85), French poet, dramatist, novelist. Marius, in Les Misérables, "Marius," bk. 5, ch. 2.

Alas! how deeply painful is all payment!
— Lord Byron

I have been in love, and in debt, and in drink,
This many and many a year.
—Alexander Brome (1620-66), English poet. Opening lines of The Mad Lover.

There is, of course, a gold mine or a buried treasure on every mortgaged homestead. Whether the farmer ever digs for it or not, it is there, haunting his daydreams when the burden of debt is most unbearable.
— Fawn M. Brodie

To John I ow'd great obligation;
But John, unhappily, thought fit
To publish it to all the nation:
Sure John and I are more than quit.
— Matthew Prior

Small debts are like small shot; they are rattling on every side, and can scarcely be escaped without a wound: great debts are like cannon; of loud noise, but little danger.
— Samuel Johnson (1709-84), English author, lexicographer. Letter, 1759, to Joseph Simpson. Quoted in: Boswell, Life of Samuel Johnson (1791).

In the midst of life we are in debt.
— Ethel Watts Mumford (1878-1940), U.S. novelist, humorous writer

Bankruptcy is a sacred state, a condition beyond conditions, as theologians might say, and attempts to investigate it are necessarily obscene, like spiritualism. One knows only that he has passed into it and lives beyond us, in a condition not ours.
— John Updike

A creditor is worse than a slave-owner; for the master owns only your person, but a creditor owns your dignity, and can command it.
— Victor Hugo

A man's indebtedness . . . is not virtue; his repayment is. Virtue begins when he dedicates himself actively to the job of gratitude.
— Ruth Benedict

Dreading that climax of all human ills
The inflammation of his weekly bills.
— Lord Byron

It is only by not paying one's bills that one can hope to live in the memory of the commercial classes.
— Oscar Wilde (1854-1900), British playwright, author

Cash-payment never was, or could except for a few years be, the union-bond of man to man. Cash never yet paid one man fully his deserts to another; nor could it, nor can it, now or henceforth to the end of the world.
— Thomas Carlyle

 

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