Jan 09 2009
How to Avoid Financial Crisis in the Future
Turn on the news and you are sure to hear some sad story of a person who became unemployed and lost their house, car, etc. While the lot has been cast for those suffering in the current economic downturn, there are lessons to be learned from their mistakes. The primary one is to keep your debt payments low. If your mortgage or rent payment represents 50% of your income then you are a fool. Get out immediately. Your mortgage or rent payment should not represent more than 25% of your income, regardless of what mortgage brokers and others tell you. If you can’t find a place that you can afford that is less than 25% of your income then you either need to make more money or find roommates. What sunk so many people was not the economy solely. Rather it was a combination of the economic downturn and foolish decisions that sealed their fate. Learn from their mistakes, keep your debt levels low and keep your family secure.
