Johnny walked into a restaurant and ordered some chicken nuggets and a soda. The cashier diligently took his order. Before he could pay, he shouted, “I am in a good mood tonight; please change my order to your finest steak and order one for everyone in the restaurant. Because when I eat, I want everyone to eat too.”
The whole restaurant began cheering for Johnny as the servers brought him his food and distributed it to everyone as well. The entire restaurant was overjoyed, and one customer even hugged Johnny. Johnny had another idea. He approached the head waiter and said, “Give me a bottle of your finest wine and pour a cup for everyone here. Because when I drink, I want everyone to drink too.” The restaurant erupted with applause as the servers went from table to table, pouring everyone their finest wines.
At this point, people on the streets and in the neighborhood heard that there was a generous person buying meals and drinks for everyone. The place filled up instantly. When it was time for dessert, Johnny said, “Give me your most expensive assortment of chocolate truffles and one order for everyone here, too. Because when I have dessert, I want everyone to have dessert too.” Strangers came over to hug and kiss Johnny with clapping and cheering heard out the door.
When Johnny was full and ready to leave, he yelled over to the head waiter, “Waiter, bring me my bill and bring one for everyone in here, too. Because when I pay my bill, I want everyone to pay their bill, too!” The end.
This week, JPMorgan Chase CEO Jamie Dimon and Goldman Sachs CEO David Solomon have sounded alarm bells, urging policymakers to address the nation’s ballooning debt and deficit before it precipitates a full-blown crisis. Unfortunately, no one seems bothered by this surging bill or planning to do anything to address it. The consequences of unchecked debt extend beyond systemic risks and economic growth – trickling down to individual households.
In the first quarter of 2024, U.S. household debt soared to a staggering $17.69 trillion, marking a new record. According to a report by the Federal Reserve Bank of New York, this sharp increase of over $180 billion underscores a troubling trend of overreliance on credit and loans to manage daily expenses. Alarmingly, the report revealed that delinquency rates on credit card balances and auto loans have also surged, with nearly 1 in 10 credit card balances and 1 in 12 auto loans falling into default.
According to Bankrate.com, a significant portion of borrowers – roughly 44% – carry credit card debt from month to month, trapped in a high-interest payment cycle eroding their financial health. Approximately one-fifth of credit card borrowers are “almost maxed out” – utilizing at least 90% of their available credit – and teetering on the brink of financial instability. Investopedia reported that the average annual percentage rate on credit cards was 21.47% at the end of 2023.
The pandemic and the hyperinflation that followed undeniably impacted the average household. There is no question that life is expensive. Even with the challenges, a myriad of solutions exist tailored to address specific needs and circumstances. From debt consolidation and budgeting to investment planning and risk management, many options are available to address particular needs and circumstances. By adopting proactive strategies and seeking professional guidance, individuals can reclaim control over their financial futures. Please don’t hesitate to reach out for a confidential consultation.
Would You Rather: Would you rather get a job that you despise for 50% more than what you are getting paid now or a job you love for 25% less than what you are getting paid now? Please email or message me to let me know your choice! Please let me know if you have a good “Would you rather” question, and we will highlight your submission.
Shmuel Shayowitz (NMLS#19871) is a respected Real Estate & Finance Executive, Writer, Speaker, Coach, and Advisor. As the President and Chief Lending Officer of Approved Funding, a leading national mortgage banker and direct lender, Shmuel has facilitated over $2 billion of mortgages over the past two decades. Shmuel’s expertise spans various licenses and certifications, including specialized mortgage underwriter, licensed real estate agent, and accredited coach. His market insights and experience are highly sought after in the real estate, finance, and coaching industries. In addition, Shmuel is a seasoned real estate investor and property manager, facilitating thousands of rentals nationwide. Shmuel can be reached at www.approvedfunding.com/shmuel.
