No. of Recommendations: 6
My thoughts, through the day, on the high-income/low-income statistics.

First of all, I haven't looked them up myself, so I'm just assuming for the moment that statistically I'm a higher default risk than I would be if I earned, say, three times what I currently do.

I've seen lots of people pointing out that high income is absolutely not an indicator of financial smarts. I agree with this, as well. The difference, I think, has little to do with the number of overspenders or irresponsible people in either category. My bet is that the percentage of the financially clueless is about the same in either category.

But a high income earner has a lot more "stupid margin" than I do. They can overspend a lot more before being unable to keep up with the monthly payments; and also they are more likely to work in jobs offering good insurance and benefits. So there's more of a safety net against uncontrolled large expenses like medical bills. Whereas I don't earn enough to afford health insurance, so if I carried cc debt and suddenly had a big hospital stay, I'd likely wind up in default.

It's not personal, it's reality...and one more reason for me to stay out of consumer debt.


Mare
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement