If you are irresponsible with credit, that's true. But, not all debt is the same. Mortgage debt is not the same as installment loan debt (i.e. for a car). 30-day debt is not the same as 30+ day revolving debt. And finance company debt is considered worse than all of them. An underwriter explained the distinction to me long ago.
I believe you when you say that you are responsible, have discipline, and pay the debt every month. Fine. I have chosen to never again incur debt in any form. That doesn't make me better, just different.
If that works for you, that's fine. But, it isn't realistic for most people.
Interesting aside: now that I have so little debt and a simplified portfolio I stopped using Quicken. It was just gross overkill for the financial transaction activity we have.
I track multiple checking and savings accounts, as well as all of our investment accounts (especially capital gains/losses for tax filing), along with a small business that I run on the side. If I were to never use another credit card, I couldn't give up Quicken without hiring an accountant to do it instead.
OK, let me see if I have this right. In your post #59 back to me, you claim that credit cards work for you as a tool and admit that it takes discipline to ensure that it does not turn into unmanageable debt. (I’ll continue to disagree with you on your stance that it is not debt if you pay it off every month.)
Then in your #60 post to Brewer you respond to his statement that he will never get into any more debt again, you reply with, “it isn’t realistic for most people.”
This is where we will have our rub. I agree that there is a very small percentage of CC users that can do so without spending more than necessary and that pay them off every month, in addition these rare birds have enough in the bank to cover their CC statement for a month or more. I also agree that you are likely one of these very few people.
That said, I can also state without a doubt that “most people” will think that they are responsible enough to use credit cards and other debt instruments, however “most people” are not. Instead it is normal for “most people” to be one small event away from crashing and burning. Heck, statistically with my having 6 months of bills in a savings account, that alone puts me in the top 10 percentile of the US population.
So, you reflect that the “proper” use of debt is just a tool, while I say that the vast majority of debt users are “tools.” Why? Well, the reality is that debt is nothing more than risk. The “tools” plan for only the positive aspects of debt and none of the potential negative consequences. Then life hits and most of the “tools” end up with the negative consequences.
You make the case that a person can become wealthy using debt tools, but that is “IF” x, y, or z.
I make the case that a person can become wealthy using cash. Period. Garunteed.
You are fine with the risk that an “IF” can bring, I prefer to not even allow for that event to be a destroyer of my wealth.
Well, my friend, that’s why we call it personal finance.
However, I would argue that is realistic for most people because I used to be “most people.”