Comment Re: Uhm... (Score 1) 143
It does, but it has a cost and that cost is your future income.
If I buy something now for $1,000 and I pay a 20% APY over the course of 5 years. So initially I only have to pay $26.49/mo and I get something worth $1,000. However, at the end of five years I've spent $1,589.63. So, yes I did just pluck $1k out of thin air for me to buy something, but now I'm gonna pay almost $600 over the next five year.
If I keep doing that I keep committing my future earnings and reduce what I can spend later. That $50k car, that $600,000 house. That $15,000 vacation. It all adds up and suddenly you run out of money because everything is committed to monthly payments.
It's a bit like where our federal government is right now. Their biggest expense is interest and it's only going to get bigger.
If I buy something now for $1,000 and I pay a 20% APY over the course of 5 years. So initially I only have to pay $26.49/mo and I get something worth $1,000. However, at the end of five years I've spent $1,589.63. So, yes I did just pluck $1k out of thin air for me to buy something, but now I'm gonna pay almost $600 over the next five year.
If I keep doing that I keep committing my future earnings and reduce what I can spend later. That $50k car, that $600,000 house. That $15,000 vacation. It all adds up and suddenly you run out of money because everything is committed to monthly payments.
It's a bit like where our federal government is right now. Their biggest expense is interest and it's only going to get bigger.