This is not necessarily an alternative meaning to the use of "afford" in
terms of wealth as "easy/comfortable to have" buying options and bears
some relationship to the use of afford in terms of an easy fit, ie. no
one had to use extraordinary means oir megagirdle to get into those
Consider the sentence "Can we afford it?" Usually, this discussion
would be in terms of whether the budget could comfortably handle the
loss of resources to have something. This has been perverted by lenders
to mean , as Don pointed out eliptically, "How much debt can we talk you
into assuming and taking into your future?" This is an invalid concept
because it does not take into consideration stresses upon the budget
that are unexpected but probable. Debt, I would suggest, is never
Everyone has their own particular *misuse* of many words.
I've dealt with people who insisted that "words mean what they wanted
them to mean" - and then turned around and whined and kvetched because
"nobody understood them". Well, of course not - how can anyone
understand a person who is eitehr too ignorant, or too pigheaded, to pay
attention to the meaning of the words tehy use?
OK, that's prob a digression from your point, but it's a huge peeve I
It depends. Maybe they are making payments because they are also making
payments on their posessions and payments into investment funds.
Personally, we sometimes pay for things on payments because of various
reasons, including reasons such as maintaining a credit rating; being
able to get a higher rate of return by investing teh surplus and paying
down the item slowly; wanting to keep a goodly cushion o fliquid assest
(read: cash); and so on.
If your old car dies and you need a new one - well, when interest rates
are high, it can make sense to pay for your new car with one lump-sum
check, but if you can get zero-percent financing, it makes mroe sense to
make payments and continue investing as usual.
As above, "making payments" is not the same thing as being "in debt" or
"unable to afford".
Again, not necessarily. It depends upon current interest rates, one's
current level of investments, and what sort of return oneis getting on
those investments. For example, last week, 4-week Treasurey bonds were
yielding (IIRC) about 4.5%; this week, they're down to just barely over
All of those things have to be balanced. In some circumstances, making
payments simply makes more financial sense.
As for "afford" - again, it's a matter of balance. It's one thing to be
able to afford the payments on an item, and anotehr thing to afford to be
able to buy it flat-out.
Most people are dependent upon payments and do no use them as part of a
balanced financial plan, becaus ethey want to live well beyone their
means. But that doesn't mean that "making payments" always and
universally means that something cannot be afforded.
Also, there is the question of "sellables". What I mean is, if a person
is paying on a $400+K house AND a new Lincoln Navigator AND a new
Cadillac Escalade AND a new Blue-Ray Giganto-screen Home-THeater
AND...well, you get the point, that does not mean that they couldn't
*afford* a $250K house and a Mini Copper and a normal TV with a
reasonable DVD player they get on sale.
Additionally, if it's a choice between medical care for a loved one, OR
trading in one's mega-stuff for something a little more modest, well,
there ya go. Maybe those people with the $43K medical bill could have
paid it if they sold some of their stuff. Maybe they're making payments
because they don't want to live like regular people. A great many people
live way beyond their means. So what is and is not "affordable" is not
so much a matter of necessity, as it is a matter of personal choice.
The people I feel sorry for are the ones who work/worked hard, do try to
live within their means, but end up being devastated by health-care
bills. My one sister, God bless her, lived in a trailer - not everyone
can be a genius or a CEO; she was on disability (injured while working as
a nurse, whcih she'd done for many years) and her hubby was a mover.
When she died, he was left bankrupt - their property (trailer) was
homesteaded so he at least had a place to live, but he'll prob be paying
off the medical bills for the rest of his life.
I've read of (and even known) a great many people who do get good jobs,
and make high salaries, yet nevertheless eagerly jump in, with both feet,
way over their heads so as to live an "impressive" lifestyle, and sorry,
but, to be honest, they made their choices, I assume they had their fun,
and sorry, but I don't think I should have to pay for their carelessness.
Heck, I have a realtive who is screwing up a high-paying job - I won't
even say she manages her money stupidly, because she doesn't manage it at
all - just squanders it left and right. So, sorry, but if we've saved
and lived reasonably and so so, so as to have a reasonable retirement,
why the heck should we be in any way "obligated" to pay for her bills or
whatever? She's making about the same salary (and for many years, was
doing a lot better than we were), but has no savings - so she wouldn't be
able to "afford" a $43K medical bill, but we could, even after having to
play "catch up" with the savings/investments, because we haven't
squandered as much.
IOW, "afford" is sometimes a matter of choice.
As I said above, everyone can't be a genius or a CEO or whatever, and I'm
fine with reasonable charity to help people whose choices aer limited.
But I don;t feel very charitable towards people who *do* have high
incomes but don't bother to save anything at all and *choose* to instead
spend every penny - and then turn around and do stuff like scam
Part of the "affordability" question is merely personal choice.
THat is not to say that I think the current HMO system is any good - I
think it sucks ebcause IMO, medical care should be a non-profit endeavor,
not something run like a Chinese toy factory. But people also need to
take some responsibility for their own choices.
When debt is exceeded by the returns from investment made using the cash
that would otherwise have gone towards the purchase, it's *better* than
paying cash, because the loan is in that case being used to earn more money
than one would have if one had given it all up-front.
The trick is just balancing and timing things so that money earned exceeds
payments made. And, of course, making sure one has saved up enough liquid
(or easily liquifiable) assets available to cover the loan, in case of
emergency. In that case, the "debt" of which you speak is only on paper,
as opposed to being a functional reality. In such instances, paying cash
doesn't make much financial sense and is not at all the same exact thing as
It's like credit card use. I sue my cerdit card for convenience, and it
gets paid in full every month. Nothing gets put onto it that cannot be
covered - *unless* some sort of serious emergency might crop up. By using
the credit card this way, one's credit rating remains very high, so that,
*in case of aserious emergency*, wherein one cannot liquidate enough assets
quickly enough, and covers the expense temporarily with credit.
Of course, that is not how the vast majority of people use credit, but that
isn't the point - the point is that "paying cash" is not necessarily th
eexact same thing as "affording", because one can use credit/loans to make
more money than one would otherwise get by paying cash.
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