Feb 17th, 2020 | Money Podcast

MORE STORIES ABOUT CREEPING DEADBEATISM It's all around us! People borrowing money they can't afford to pay back, and the journalists who feel sorry for them! Plus, learn the reason why YOU shouldn't feel sorry for them.

Here's the Wall Street Journal article about car-buying deadbeats to which Tom refers in this episode.

Yes, it's true that car dealers actually make more money on financing your car than on selling you the car!

Here's the CNBC article about student loan deadbeats to which Tom refers in this episode.

How do you feel about deadbeats? Tell Tom: tom@blowmeuptom.com.

HOUR 1

Comments

Submitted by TallTim on

Confusing me here, Tom. Your episode number says 170, but you've already had that show back in January 8th when you were talking about religion.

By my records, this should be episode 186. Just thought I'd let ya know.

Submitted by TallTim on

Like the shows so I keep track.

And yeah, I agree we should be mad about these deadbeats taking out loans they can't afford. And that lady lying to the other lender is straight up fraud.

Really makes me wonder how widespread the practice is, and if it is -- it would explain why a bunch of smaller car lots have gone out of business. This hurts everyone, and I find it unacceptable.

Submitted by dsalvadoranstud on

I heard yesterday that Trump sued Deutsche Bank in 2008 for $3 billion after they had loaned him $640 million, all because he couldn't make the payments! An asshole, liar, racist and a deadbeat! What a combo!

Submitted by Faithful LIstener on

Submitted by Faithful LIstener on Thu, 02/20/2020 - 20:19

know it, and are waiting with bated breath.

This is a singularly important topic.

Look at the numbers, and the subprime car lenders make back - after you factor in "givebacks" - a lot of money very quickly. These car dealers look an awful lot like repo outfits, and if you look at their cost structure from THAT perspective, it's hard to see how this is not the wave of the future. They make so much money they simply can not lose.

This tendency towards immediate gratification at the expense of their future income has grown dramatically since the last recession. Wells Fargo owning pawn shops? Check. Payday loans at rates that make the jaw drop (some more than 100% per annum)? Check. The real trick of catching the collapsing middle class in this net was the last major bankruptcy law rewrite.

The days of "jingle mail" - being unable to pay your mortgage and putting the house keys in the mail to the bank while driving to your bankruptcy filing, are gone. The last I know, bankruptcy law requires a five year workout period on your mortgage AFTER you file for bankruptcy. The average house sells every five years, so you're on the hook for the mortgage - and any losses on the sale of the house - while in bankruptcy.

The System is rigged against those with modest understanding of personal finances. Always has been, always will be.

Oh, the numerous calls for forgiving student loans? How well do you think that will go with those who worked full-time, and went to school at a low priced, convenient community college for the first two years, of college? My guess? Not well at all. But they made the wrong choice, and the obvious first part of a solution - allowing their discharge in bankruptcy - is not on the political horizon.

Want the truth? All things being equal, the overwhelming tendency will be for people with troubled student loans will find themselves in real trouble with auto loans, and payday loans.

Frankly, Tom's financial advice is too much for them, as they seem to lack the basic adult discipline needed to follow them. How much do they spend on breads, or Starbucks, or anything? They overpaid for college; they will overpay for a car.

The only source I trust for getting ready for Tom's financial advice is Dave Ramsey's Baby Steps, available for free online. You can also get the Debt Snowball spreadsheet template online, for free.

I see a real political chasm between those who will never get out of debt, and the diminishing number of the rest of us, as we seem to literally see two different worlds.

The Leykis Followers will prevail, Cash will again be king. And everyone will drive affordable beaters, and question "why college?" at all.

That would be a good start.