Fretting about financial issues uses up valuable brainpower and limits your decision-making ability, raising the risk of mistakes which lead to more debt.

In contrast those with fewer concerns about money have more "mental bandwith" available to focus on getting matters like education, training and time management right.

The "cognitive deficit" suffered by someone with financial problems can be the equivalent of a 13-point loss in IQ or the loss of an entire night's sleep, researchers claimed.

Studies had previously found that people with more finanial problems tended to be worse at some cognitive tasks, wuch as making decisions about money, but the cause and effect of the link were unclear.

Researchers from Harvard University conducted two studies in the USA and India to examine what effect poverty had on people's thinking ability. They published their results in the Science journal.

rest of the article: Financial worries lower thinking ability - Telegraph

Buying fawk-losers and enjoying passive income from renting them out makes me smarter. Knew it!

I know it does, I've lived through it. My past financial indiscretions are well documented here, stay-at-home wife (our choice) and 4 kids got us into a financial hole that it took us nearly 10 years to get out of. I know the stresses and emotional drain of shuffling bills around, decided which ones we'd pay late so we could pay the mortgage. I know it adversely affected my work.

We got ourselves into that position via choice (I think we made the right decision but don't know that I would recommend it), I can only imagine if someone has no control over it.

__________________

1980 300TD-China Blue/Blue MBTex-2nd Owner, 107K (Alt Blau) OBK #15
'06 Chevy Tahoe Z71 (for the wife & 4 kids, current mule) '03 Honda Odyssey (son #1's ride, reluctantly) '99 GMC Suburban (255K+ miles, semi-retired mule) 21' SeaRay Seville (summer escape pod)

^Most my college days and for years after were like that, too. I’m sure most are affected in this way at some point, if not always, at least to degrees.

The article also implies that a lot of people are actually damaged by the burden of poverty.

Over time I have tried to look at the overall picture of a consumer driven society. Personally I almost feel like easy credit has extracted too much of a price. Yet at the same time has been a requirement to enable the system we have to survive. The cost may just have been too high but that is a partial unknown at this time.

Our son in law has just started a new job as director of operations for a major if not the largest Canadian oil company. Where they have to relocate the housing is very expensive. My guess is that they might be able to have a new house built in the area for much less cost than the inflated valuations of that area and will mention this to them.

Buying something at that location based on their current income and the local valuations may not be the best solution. Especially if the job does not work out over the years. My feeling is that if you can build for less it makes sense to do so. It has worked for us over the years and I feel in some cases there is no reason it cannot work for others even today.

What is really troubling me is that the current property valuations there are based on possible future events rather than today. If they do not occur what will property valuations slump to? Is far too easy historically low interest credit also allowing the current valuations to skyrocket?

Many things I see out there are making me think about them from time to time. I know at the same time what I see is a requirement of a consumer driven society. But at the same time is the continuance of what is todays policies going to be the same over the longer haul? I suspect more or less it will be. At the same time there are no guarantees of that at all.

^^^

Your property bubble just followed ours by about 4-5 years. No shame in him renting and sitting tight for a year, especially if rents are lower than carrying costs on a comparable property.

It will burst eventually. Just like the interest rate rise and generally uncertain conditions have slowed down the US markets that I'm watching in the last month. No media reports yet, but data are always crunched 2+ months late. (And in any case, "current sales" are things that went into contract in May or June.)

Director of operations for a large oil company should be a job with great pay and perks. Do Canadian tax laws permit a deduction for mortgage interest expense? If not, then there is little advantage to buy. If it does, then the logic to buy is in part for the tax deductions.

One possibility would be to get the company to pay for housing, even if it’s in trade for some income. That way if there is a downturn of if he’s cut lose, he doesn’t have a mortgage to worry about.