Credit/Debt Recovery

"Maxed Out" on cable

I noticed a cable TV network was showing James Scurlock's documentary "Maxed Out" this week. I know it's been a few years, but since it's finally made its way to cable TV, I figure now a lot of people will finally have a chance to see the film.

Yes, it's one-sided and manipulative, leaves out crucial parts of the story, and is wrong about bankruptcy reform, but I still think it would be good for a lot of people to see it.

The film will make you want to cut up all of your credit cards, and that's a good thing. But first you will be required to do a bit of work that the film doesn't bother to; accept responsibility. A naive viewing of "Maxed Out" will make you think creditors are responsible for consumer debt without any help from the consumer. In truth, there are two parties in consumer debt transaction; those evil creditors, and the consumer. The only party in the transaction you have any control over is you. So hate the creditors all you want, but ultimately, the you as the credit card holder have to choose not to use the thing. 

Homeownership

So you've bought a house for half a million dollars and now you find it's barely worth $300,000. 

So what?

When I advocate homeownership, that's what I mean: home ownership. Not investing, speculating, or flipping. 

You've got a roof over your head, you live in a (presumably) nice neighborhood, and every month you move a bit closer to not having any more mortgage payments. Who cares what the current appraised value is, other than your insurance company?

You weren't planning to re-sell the house right away at a profit, were you? If you were, then homeownership wasn't your goal, and you should go read an investment blog. I don't blog about risky investment schemes; I'm trying to help people toward financial freedom.

When you borrowed to buy a home, whether you borrowed 100,000, 250,000, 570,000 or a million dollars, that's what the house was worth to you. What does it matter what the newspaper headlines say? Keep making your house payment, keep moving toward homeownership, and someday you'll be able to retire mortgage free and live in the house you own. What it's worth will be something for your heirs to sort out some day.