Author looks at consumer debt - East Valley Tribune: Business

Author looks at consumer debt

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Posted: Sunday, March 16, 2008 11:40 pm | Updated: 8:56 pm, Fri Oct 7, 2011.

David Rye believes he has something to say about the nation’s mounting consumer debt problem.

The Scottsdale-based author has written 10 investing and business books, including “The Corporate Game,” “1,001 Ways to Get Promoted,” and “1,001 Ways to Save, Grow and Invest Your Money.”

His latest book is “The Complete Idiot’s Guide to Financial Aid for College, Second Edition,” and he’s now working on a book about getting out of debt.

“I got a call from one of my publishers … and they put me on a fast track to come up with a book on getting out of debt,” Rye said. “My goal is to help this country survive economically. I have never seen our economic situation as bad is it is now.”

Rye said he’s come across some startling information while conducting his research, such as consumers getting debit cards to withdraw from their 401(k) retirement savings plans.

“They can’t get any more credit cards and they can’t leverage their housing equity,” he said. “If you talk to some of the younger kids who are in the 24 to 25 age range, and who are moving into good jobs, they want the big car, they want the big house, and they want this and they want that. I guess we did, too, when we were kids, but fortunately we came out of it somehow. But I don’t see it coming out with the kids now.”

Nationally, consumer debt now stands at an all-time high of $2.5 trillion, according to the Federal Reserve. If divided among the U.S. population, that adds up to more than $8,200 in debt for every man, woman and child.

At the same time, personal savings as a percentage of disposable personal income was 0.2 percent in December, up slightly from zero percent in November, according to the Bureau of Economic Analysis.

“A friend of my daughter’s just graduated and has a great job, and she was crying when she got her first check,” Rye said. “I asked why and she said, ‘I don’t have any money.’ I asked where did it go, and she said, ‘By the time I pay for my credit cards and my auto, I have nothing.’ ”

In addition to being an author, Rye is a trainer and motivational speaker, and has worked with IBM, the University of Colorado and the University of Phoenix for educational training programs.

His book on debt isn’t going to include any new or unique ways to get rid of debt. Instead, he hopes it will be a wake-up call for people to start acting responsibly with their money now.

“In the opening chapter, I include a true story … about what happens to somebody who graduates from college and gets a good job, and destroys their finances,” Rye said. “It’s about what happens to their marriage, what happens to their personal relationships and why they’ll never be able to get out of debt using the compound interest table of 25 percent to 30 percent (interest) on your credit cards.”

He hopes to reach younger people who either may not yet be in trouble or can still dig themselves out of it.

“It should be mandatory that every high school student has to take at least one semester of basic finance, what it costs to live, what it takes,” Rye said.

In the meantime, the second edition of his guide to college financial aid includes new information about the abundance of available scholarships.

“There’s the mechanics to find out if you can get free money (grants) and if you can get a good loan, but you’re missing the big boat,” Rye said. “The big boat is there are a ton of scholarships that just sit there because nobody asks for them. My guess would be, if you take the 25 biggest corporations in Arizona, or every major employer in Arizona, every one of them is offering scholarships to kids.”

Some scholarships may require certain qualifications, but in most cases employers just want to give these scholarships to “somebody who wants to show that they want to go to school and get a degree to do something,” he said.

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