7 / 10- The Common Theme When we look at these five pitfalls - expensive degrees with poor ROI, underwater homes in depressed neighborhoods, high-cost low-value automobiles, consumer goods on high-interest credit, and fee-laden retirement accounts - we recognize a consistent theme. Each purported asset diverts resources from genuine wealth creation into the pockets of lenders, regulators, or well-paid middlemen. In a rational world, a family would think long and hard before taking on six-figure student debt for a degree that offers no reliable job prospects. A rational individual would not buy a house that costs more than the income the local economy can sustain. A rational worker would not pour 10% of take-home pay into a car that loses 20% of its value the moment it leaves the dealer's lot. A rational head of household would not sign up for credit card entitlements they cannot possibly pay off. A rational saver would not allow Wall Street advisers to bleed off a percentage of every dollar saved for retirement. Yet human beings are not always rational, especially when under pressure to appear successful, to conform to social norms, or to avoid short-term embarrassment. We tell ourselves that college is always worth it, home ownership is the American dream, you've got to drive to work, everyone has a TV, saving for retirement is mandatory. But we forget that dreams have actuarial tables. Once debts accumulate, obligations remain, and fees erode any hope of rising out of poverty. Politicians and pundits speak of raising the minimum wage or expanding welfare as if those solutions will magically erase the burden of bad debts or declining assets. But history teaches us that policies which subsidize harmful behavior - as when government guarantees student loans with no check on career choice, or when local governments offer mortgage tax breaks on already overpriced houses - simply encourage more risk-taking until the bubble inevitably pops. When that bubble bursts, it is not only the banks that lose. It is the individual who made life choices based on inflated expectations. The dynamic is identical to what we have seen in Greece, Spain, and Argentina. As long as lenders are willing to pretend that a degree or a mortgage or a car loan is an asset regardless of context, the borrower will keep borrowing until he cannot. And by then, all that remains is the wreckage: a shredded credit report, a waterlogged house, a repossessed car, a degree that cannot pay the rent, and a retirement account that can barely keep pace with inflation.