Debt

By Eamon Murphy
Daily Finance

I just bought a movie ticket online. It cost me $16, and the truth is that I really shouldn't have spent that money. I'm behind on rent, unsure of my checking account balance 36 hours ahead of payday, and still suffering from recent expenditures connected to my five-year college reunion. But I want to see the movie very badly, as infantile as that desire is, and the price of admission isn't going to get cheaper. The sooner I see it, I tell myself, the sooner I'll stop thinking about it. Then I can move on to other, less consumption-based concerns.

What enabled me to make that purchase was a credit card. I could have gone debit, but I'd rather not involve my checking account at this time of the month; I needed to be able to put off the reckoning of my overpriced ticket. (At least I didn't "upgrade" to 3D.) Which goes to show what Derek Thompson argues at the Atlantic: "Yes, Credit Cards Are Making You a Bad Person" -- "dumber, fatter, poorer," like some nightmarish Daft Punk song.

From The Great Depression to The Global Recession, often what follows is an upswing in suicides, alcoholism and drug abuse.

However, in their new book, The Body Economic: Why Austerity Kills co-authors Dr. Sanjay Basu, an assistant professor of medicine and an epidemiologist at the Stanford Prevention Research Center, and David Stuckler, a senior research leader at Oxford University and a research fellow at the London School of Hygiene & Tropical Medicine, argue that it's not the recession that causes "veritable health epidemics that ruin or extinguish thousands of lives," but the efforts of the world's governments to enact austerity measures meant to balance their individual country's respective budgets.

The problems start mounting because often the social support programs such as unemployment, old-age pension, disability income support and healthcare are the first things to be cut back as governments begin to try and balance their budgets. The British Government approached the recession by doing just that -- cutting billions of dollars in social support programs -- and as a result, they are now growing their economy at less than half the rate of the U.S., which employed a strategy of stimulus, rather than austerity. To make maters worse, the peer-reviewed data that Basu and Stuckler collected shows that the UK has yet to fully recover even now and may be on the verge of what they call a "Triple-dip" recession.

For each man, the consquences of such devastating austerity measures are personal and each knows first-hand that the way a government responds to a recession can be a matter of life and death for the people who live in the countries that are impacted.

At a young age, Dr. Sanjay Basu's mother was sick with a lung infection known as coccidiomycosis and his father traveled across America trying to make ends meet, so he could pay her medical bills. Later, as an undergraduate in mathematics at MIT, he learned that statistics tell the story of who lives and who dies. We caught up with Dr. Basu in San Fransisco and he told us why austerity is so deadly and how people must fight back.

By Eamon Murphy
Daily Finance

In 2008, Halsey Minor sold CNET Networks, the technology media property he founded, to CBS Corp. (CBS) for $1.8 billion. Minor's personal haul was $200 million, according to CNNMoney. Now, just five years later, Minor, 47, has declared bankruptcy, listing debts of up to $100 million and claiming assets of at most half that much.

Minor has filed for Chapter 7 protection, which a bankruptcy lawyer who spoke to Bloomberg said "is clearing the slate":

"He isn't required like Middle America to pay his debts, because they're mostly business-related."

For individuals, Chapter 7 provides a chance to start over, and basically stiffs creditors (of which Minor has 60, The LA Times reports). For businesses or partnerships, on the other hand, no debts are discharged.

By Matt Brownell
Daily Finance

It's a time-honored tradition for shopaholics: When you realize your spending has spiraled out of control, you take out your scissors and cut up the credit cards that have been getting you in trouble.

If you're getting out the scissors to destroy your plastic, presumably you're also picking up the phone to cancel the account itself. But is that such a good idea?

By Lynnette Khalfani-Cox
Daily Finance

Have you ever wondered how to establish financial boundaries with relatives and friends? If so, you're not alone.

As a Money Coach, I'm constantly asked for suggestions on how to put an end to the money-draining behavior of family members and friends.

Well, this may come as a shock to many of you who keep getting approached for financial handouts, but the problem isn't the person asking for money. The problem is you: the person who keeps doling out the cash, over and over, vainly hoping that it will be the last time.

Each year Wall St identifies 10 important brands sold in America that we predict will disappear before the next year is out. Looking back on last year's list, we made some good calls and missed a few. Suzuki, MetroPCS and Current TV are all gone in the United States. American Airlines combined with U.S. Airways, though the American name lives on. Research In Motion is no longer a brand, having been renamed BlackBerry. We bungled our predictions regarding Avon, the Oakland Raiders and Salon.

This year's list reflects the brutally competitive nature of certain industries and the importance of not falling behind in efficiency, innovation or financing. The list also reflects how industry trends can accelerate the demise of certain brands. This year, we included two magazines -- Martha Stewart Living and Road & Track. Print advertising is in a multi-year decline, but some magazines have fared worse than others. These two have suffered sharp drops in advertising revenue over the past five years. Magazines also carry the heavy legacy costs of printing, paper and distribution, a problem not shared by online-only competition.

In the world of consumer electronics, Barnes & Noble's Nook, for example, competes with better-selling products made by larger companies -- Apple and Amazon -- and is also in the e-reader business, a shrinking industry. Ditto for the Olympus digital camera, now that camera sales, especially point-and-shoot models, have been eroded by smartphones.

A third industry with two brands on our list is automobiles. Car sales are growing in the United States, but brands with market shares under half a percent cannot compete with companies that produce high-luxury models, like Mercedes-Benz, or multiline giants like General Motors. Suzuki pulled out of the American market last year; Mitsubishi and Volvo will follow soon.

We continue to use the same methodology in deciding which brands will disappear. The major criteria include:

1. Declining sales and losses;
2. Disclosures by the parent of the brand that it might go out of business;
3. Rising costs that are unlikely to be recouped through higher prices;
4. Companies that are sold;
5. Companies that go into bankruptcy;
6. Companies that have lost the great majority of their customers; and
7. Operations with withering market share.

Click through the gallery to see the 10 brands that will disappear in 2014.

By Levi Ennis, as told to Michele Lerner
Daily Finance


When my wife, Jennifer, and I got married in March 2010, we thought we were OK financially, kind of like everyone else.

Jennifer was working two jobs, and I was working at one part-time job and looking for work. While Jennifer came into our marriage with a $20,000 car loan, I was the one who brought along a lot of debt: $20,000 for a car, $70,000 in student loans and $26,000 on a vehicle that I had co-signed on for my brother.
Yet even though we owed $136,000, we really weren't that concerned about our debt because it seemed normal to us to have car payments and student loans.

Despite what tabloids would like you to think, not all marriage problems start in the bedroom. Financial infidelity is the root cause of many crumbling unions, says family law attorney Steven Mindel.

"More marriages fall apart for financial reasons than for fidelity reasons," Mindel says. "Fundamentally, marriages are built on trust and anytime you breach the trust of the other party, it damages the relationship. Getting married is like the merging of two enterprises."

Nearly half of divorced or separated U.S. adults said they regret not discussing their personal finances before taking their vows, according to a survey by Couponcabin.com. With Mindel's help and a host of other family law and finance experts, we've rounded up a list of some of the most damaging money lies spouses can tell.

While the banks and credit card companies lure us deeper and deeper into hopeless financial holes that become our bastard albatross for decades, it turns out their is a way to fight back without simply giving all our money away to a greedy figurative vacuum.

Financial soothsayers are shouting from the mountain tops that you can get out of debt and, incredibly, all it apparently takes is $10 a day. But, as if you've just witnessed an incredible feat from a magician, you're probably asking, "How'd they do that?"

Well we'll show you. Obviously, they will all be a slow burn, but by the end of the process hopefully you'll be able to break the chains of the debt that's impeding your freedom. It can all be found in personal finance expert Jean Chatzky's book Pay It Down.