How much debt is too much? Depends!


To be fair, looking for bad advice in US News & World Report is a lot like trying to find something beautiful in the Louvre.

It's just too easy. Last week, I took US News to task for advising parents on taking out student loans when they can't afford their own mortgage payments.

This week, Rick Newman, the magazine's chief business correspondent, offers this horrible, horrible, horrible piece of advice: "The average debt-to-income ratio, or DTI, is 125% today. Economists roughly consider a 100% DTI ratio to be "normal" or healthy. So if you owed a combined $125,000 on your mortgage, car loans and other obligations and earned $100,000 in take-home pay, you'd want to pay down your debt by $25,000, or 20%, to be in the safe zone."