Fastest Way to Get into Debt
You might be surprised to learn that the worst type of debt that you can accumulate is consider debt. Especially the kind of debt that you accumulate on your credit card.
Remember that iphone that you bought last month and that nice flower vase or the new rim you bought for your car?
All of that adds up pretty quick.
And credit card debt starts piling up pretty fast.
If you don’t have the guts to face up to credit card debt, you are in trouble. According to the Federal Reserve Bank Of St. Louis (FRED), the average credit card interest rate is a whopping 17% as of mid-2019.
Which means credit card interest rate is performing better than stocks. The S&P 500 has had a 5.6% annualized return since 1999, while REITs had a 9.9% annualized return for the 20 year period.
All of that indicates, you are not going to outrun your credit card soon. Especially since the average wage growth is only 2% a year.
So, the smartest thing to do is not splurge with your card and if by some bad sequence you do, refinance your morgate to wriggle out of this burgeoning debt trap.
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