this post was submitted on 10 Dec 2024
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[–] UnderpantsWeevil@lemmy.world 33 points 2 weeks ago* (last edited 2 weeks ago)

you should understand compound interest and how it works before you get buried in debt that you can’t pay off

When incomes are stagnant and interest is variable and inflation drives expenses upward, this is theoretically good advice but practically useless.

What do you tell the kid who can't afford college without taking out a 7-10% APY loan? Is risk you're taking on a degree worth the benefit of joining the professional class? Impossible to say under current conditions.

What do you tell the young adult choosing between renting an overpriced apartment or taking out a six-figure loan to buy an old home in a bad part of town? Is the 6% mortgage rate going to get better or worse in another ten years? Is the local job market going to improve or collapse?

What do you tell the middle aged man faced with an insurance company rejecting his claim on a critical pharmaceutical? Do you go out of pocket and cut into your savings? Or do you try and make it without the meds and hope you don't destroy your chances at a comfortable retirement?

All the math teaches you is that risks exist. They keep you clear of a few truly awful choices, but they don't do anything to guarantee your success. There is no correct play in a game that is stacked against you.