Headlines: Good news for a change, sort of!
- Michelle Wood: SWCD
- October 12, 2009
- 832
The stock market rebound has helped build equity in our investment portfolios and real estate values went up slightly to help out the improvement.
Adding to that was the fact that we paid down debt on our homes. Keep in mind these are all "slight" improvements.
The net equity growth was only 3.9 percent, to a total of $53.1 trillion. House values increased 1.8 percent, helping the equity position grow.
This was the first time since 2006 that real estate went up in value.
Also helping out was that homeowners reduced their debt load by 1.7 percent on an annualized basis. Again, not a lot but it is at least in the right direction.
This reduction was in combined consumer debt as well as mortgage-backed debt.
It is a great thing to see overall family debt going down. For too many years it was going the other way. We spent money like drunken soldiers on leave and with total disregard for ever paying it back.
Unfortunately, it took an almost "killing recession" to start things in the right direction.
Ready for the other shoe to drop?
The federal government debt went up an unbelievable 28 percent annualized rate. Not surprised, huh?
Bailouts have repercussions, right?
State and local governments fell in line right behind the feds and increased borrowing at an 8.3 percent annualized rate.
Do you get the feeling there is one group of people who don't get how this debt thing works?
Included in the numbers above for reduced debt was a decrease of consumer debt at a 6.5 percent annualized rate. This is the worst kind of debt.
If we could just get the people that are supposed to work for us to get the idea "debt has consequences," we would all be a lot better off.
Bill Weber, CPA, has been advising businesses for more than 30 years. He has served in leadership with Crown Financial Ministries and is a church co-coordinator for Financial Peace University.
E-mail questions and comments to financialmatters11@gmail.com.
The opinions expressed in this column are mine, alone. The Bargain Hunter, their editors and advertisers do not condone, endorse or share my opinion. They are way too smart for that.