Tuesday, September 23, 2008

Debt is Normal! Be Weird! Volume 4

I thought it was time for another "installment" of our debt depletion journey. Also, I went back and fixed one from a few debt posts ago that, for some reason, posted in miniscule fairy script and couldn't be read. It's the one where I reveal just how much debt we started with...and it's a big, scary number that just might brighten your day and make you feel a little better about yourself! So, to put a little more spring in your step, go back and read here. And then come back!

NOTE: The following post is from a year ago! I just don't want anyone else to worry about Reilly's toe! She's just fine! All is well! Although she now loves telling the story of her trip to the E.R.!
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Originally written Wednesday, September 26, 2007
Title: Just When You Think You're Getting Ahead...

...your daughter drops a brick on her toe, requiring a trip to the emergency room for stitches and x-rays and the like. Who knows how much that's going to cost? (Not that I resent spending the $$ on her. She and her toe are completely worth it!) What I wonder, however, is whether to completely deplete our emergency fund - which only last week made it up to $495 - or just add the hospital bills to our debt column since we can make interest-free payments on it. Hmmm....maybe a call to Dave Ramsey's show is in order.

I was listening to Dave's "Dumping Debt" lesson on CD this morning, and he gave some interesting facts and stats about debt in America. And I'm going to share them with you. (Although who "you" is, I have no idea since I don't think anyone is really reading this.)

~ Written in the Sears catalog in 1910 - "Buying on credit is folly". In 1986, Discover was introduced by Sears to tackle Visa head on and it was the sale of Discover that allowed Sears to survive when they were getting ready to go bankrupt. Sears gets 1 million credit applications per month and, according to their own publicly traded report, made more net profit on credit in the last 9-10 years than they did on the sale of merchandise. (Now I know why Sears can survive, even though I never see their stores busy!)

~ In 1970, only 15% of consumers carried plastic.

~ James "Cash" Penney (sound familiar?) did not allow credit in his stores while he was alive. It was only after his death that J.C. Penney's stores began taking credit.

~ Henry Ford thought it was stupid to not pay for a car in cash and waited 10 years after GM to start offering financing on Ford cars. It was only through pressure from other members of the Ford company that he began offering that financing.

On the lottery and powerball:

~ The average person who plays the lottery spends between twenty-five and forty dollars a month on tickets. If thirty-two dollars a month was put into a good growth stock mutual fund from from the time that person was twenty years old until they were seventy, the yield on that fund would be $1,250,00 - EVERY TIME. (He points out the difference between those odds and the 8 million to one odds of actually winning the lottery.) With only thirty-two dollars a month. Wow.

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Originally written Wednesday, October 3, 2007
Title: WHOAH!

We got the statement for Reilly's ER visit...are you ready? Almost $1,300!! (I think it's $1289 and change...) Now, since we have insurance, we won't pay all of it, but I was still shocked at how much it cost! I was expecting $350 to $500 or so!Now I just need to wait to find out what our portion will be so I can make payment arrangements with the hospital.

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The most interesting thing to me about that first entry are the odds and the stats about the lottery and Powerball. I hate the lottery with a passion because it really preys on the poorest members of the population. I heard a guy at the store the other day, telling the cashier that he needed change so he could go and get his lottery ticket, and I came very close to saying, "Hey, have you ever heard of Dave Ramsey?"

1 comment:

Flea said...

Wow. Poor Reilly! She doing ok?

We're working it. I'm selling stuff off left and right to get to the thousand. No credit cards, just life debt. House. Student loans. But it's huge.