- About 43% of American families spend more than they earn each year.
- Average households carry some $8,000 in credit card debt.
- Personal bankruptcies have doubled in the past decade.
With the fall of financial giants Bear Stearns, Lehman Bros., Merril Lynch, and AIG hanging on to threads, it is clear that the American economy is troubled. But do we really blame a "slow" economy, or is the recent downturn a result of how we all handle money? Would Lehman Bros. go bankrupt if it had money in the bank? These companies risked their future on the HOPES of other people paying their mortgages on time. And they were subprimes at that, not even people qualified to get a good interest rate to start with.
I said years ago when the trickery of the ARM started to get well publicized that the end result would be very ugly, and it is. Those that thought they would have a better job in 4-5 years and be able to refinance don't have the jobs they thought they would have. And it was wreckless behaviour on the part of banks to push those loans on people they knew couldn't afford the loan and payments in the first place.
Financial institutions want us to let them manage our money. But could they do a better job and earn me more money that just a standard savings account at this point?
