Is my job worth the effort?

[ThePythonicCow]

Re: Is my job worth the effort?

I have a quick question concerning Jtabeb's counsel of "do not go into debt for anything". If the coming currency debasement of Poom is likely, would it not make sense to stop being a responsible 'pay as you go' saver and instead be an irresponsible debtor to some extent. I recently purchased a plane with credit in the hope that this will be somewhat of an inflation hedge. Am I wrong here. Should Itulipers be on the 'wrong' side' of the 'moral hazards' environment that our elites are creating? Does being responsible just make us rubes?

There are only two conditions under which I would voluntarily choose to go into debt:

1. If I had an income stream that was reliable and likely to increase in nominal value with inflation, and
2. If I had the debt fully hedged with the liquid means to pay it off quickly if need be.

The first of these conditions provides the likely profit, and the second minimizes the risk.

[jk]

Re: Is my job worth the effort?

There are only two conditions under which I would voluntarily choose to go into debt:

1. If I had an income stream that was reliable and likely to increase in nominal value with inflation, and
2. If I had the debt fully hedged with the liquid means to pay it off quickly if need be.

The first of these conditions provides the likely profit, and the second minimizes the risk.

i agree. under these conditions debt can be a good inflation hedge. except i'd say you just need condition #2. the profit can come from diversification within the hedge. condition #1 minimizes the risk.

[*T*]

Re: Is my job worth the effort?

I have a quick question concerning Jtabeb's counsel of "do not go into debt for anything". If the coming currency debasement of Poom is likely, would it not make sense to stop being a responsible 'pay as you go' saver and instead be an irresponsible debtor to some extent. I recently purchased a plane with credit in the hope that this will be somewhat of an inflation hedge. Am I wrong here. Should Itulipers be on the 'wrong' side' of the 'moral hazards' environment that our elites are creating? Does being responsible just make us rubes?

It depends on whether the interest rate is fixed or floating. A floating interest rate would be a liability in a poom scenario.

If I may ask, how come you can afford a plane but not an apartment?

I would agree with jtabeb, but partly because there is a moral element.

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.

[touhy]

Re: Is my job worth the effort?

There are only two conditions under which I would voluntarily choose to go into debt:

1. If I had an income stream that was reliable and likely to increase in nominal value with inflation, and
2. If I had the debt fully hedged with the liquid means to pay it off quickly if need be.

The first of these conditions provides the likely profit, and the second minimizes the risk.

uh-oh.



Thank you all for your insightful responses. I really should not have hijacked this thread, but I appreciate your insights.

I suppose the success of such a strategy is determined by the ultimate outcome of where our economy is headed: deflation or inflation. I just grow weary of being a rube.

Touhy