The Capitalist Investor - Episode 177

This week on The Capitalist Investor, the team discussed credit card debt, electric cars, and inflation numbers. They discussed the topic of credit card debt and the momentum it has gained and then moved on to talk about electric cars and police forces, as well as a good cancellation they had. Finally, they wrapped up the conversation by discussing the inflation numbers that had come out that day.

The inflation rate was 4.9%, in line with expectations. They noted that the market had reacted positively, but was now flat. They then discussed how the middle class is getting screwed due to high credit card interests, mortgages, and inflation rates. They discussed how the billion dollars in credit card revolving debt will become a much bigger problem in the future, with $10,000 turning into $50,000 in five years due to high interest rates.

The conversation discussed the alarming levels of credit card debt in the US, currently reaching an all-time balance of $1 trillion with an average interest rate of 25%. The speakers discussed the double-edged sword of credit card debt, in that credit card companies make an exorbitant amount of profit off of it with a profit margin of almost 100%. This is because they charge 25% interest, and the average household credit card debt is around $7,000. They also discussed the ancillary impacts of COVID, such as people raising their standard of living and having difficulty lowering it again due to the free money being passed out. In conclusion, the speakers agreed that an issue with spending is the root cause of the high levels of credit card debt.

The guys discussed the staggering debt that a 29-year-old had managed to accumulate in the form of student loans, a mortgage, and credit card debt. They discussed how this system is designed to keep people in debt and how it needs to be revamped. They also discussed how young people are encouraged to take out student loans as a way to create success. They concluded that as long as the job market remains strong, credit card issues will continue to be a problem.

 

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Keep Listening to The Capitalist Investor:
Episode 15:
Spending Strategies in a Bear Market, Ep #15
Episode 31:
Handicapping the 2020 Election, Ep #31
Episode 47:
11 Investments in Your Home That Pay Off, Ep #47
Episode 63:
Jeff Bezos and Amazon: Past, Present, and Future Ep #63
Episode 79:
7 Ways Biden Plans to Tax American Families (Part II), Ep #79
Episode 95:
5 Beaten Down Stocks to Buy on the Dip, Ep #95
Episode 111:
Special Episode – Talking Energy with Daniel Turner, Ep. #111
Episode 127:
Retail Earnings Tank & What The Heck is Greenflation? Ep. #127