Ok, well in your example, I wouldn’t call you broke either, as the debt is currently managed. However I’d call it high risk and I’d call your mortgage underwater. Your debts are more than your assets, so any disruption to pay, like losing your income or having an illness, or damage not covered by insurance and you would be in big trouble. Thats living beyond your means.
Usually the only reason debts would be higher than assets is a drop in home value or taking on too much debt in other areas. That’s pretty much what OP was asking. Why so much debt? Do you think it’s high risk?
I want to be clear that that was a hypothetical. And yes, it’s a precarious financial situation. But my point was that indebt!=broke, which it sounds like we agree on.
Ok, well in your example, I wouldn’t call you broke either, as the debt is currently managed. However I’d call it high risk and I’d call your mortgage underwater. Your debts are more than your assets, so any disruption to pay, like losing your income or having an illness, or damage not covered by insurance and you would be in big trouble. Thats living beyond your means.
Usually the only reason debts would be higher than assets is a drop in home value or taking on too much debt in other areas. That’s pretty much what OP was asking. Why so much debt? Do you think it’s high risk?
I want to be clear that that was a hypothetical. And yes, it’s a precarious financial situation. But my point was that
in debt != broke, which it sounds like we agree on.