Debt – What do you think?
Debt is not the Devil…….. it isn’t even the enemy.
I see endless examples of people accepting debt (like credit cards)
as a bad thing that was sent with the intention of destroying our finances.
I used to be one of them.
The situation in which money is owed to another party fills many
with a sense of impending doom and is avoided whenever possible.
Debt is actually a powerful tool that allows even those can not afford,
an opportunity to wield financial power that is otherwise unattainable.
Debt – A powerful tool
I see people who are literally ALWAYS in debt,
yet always living life like money grows on trees.
Donald Trump has been in bankruptcy court at least four times.
Have you ever thought he would loose the shirt off his back?
Even on a smaller scale, there are many people in this country who would not have
a fridge or a stove in their house if hire purchase was not available.
Debt literally improves the quality of life for people who use it well.
That does not mean that debt is not capable of destruction.
A tool can be neither good nor evil, but it can be dangerous.
It makes no sense to get angry with a hammer if you hit your own thumb with it.
Yet it is perfectly reasonable to tell someone to be careful with the hammer.
We must take responsibility for the outcome of your own miscalculations.
Debt – My hard lesson
When I began working I learned my lesson the hard way.
I bought my first car as soon as I had enough money to afford it.
I spent what little savings I had to buy it for cash to avoid debt.
The second week of owning my car,
it was stolen while parked in front of my house.
My car was recovered with structural damage and missing tires,
propped up on bricks on a police compound.
My responsibility was now to tow and repair the car.
The problem was that I had spent all my funds.
It took me a year to repair my car to the condition I bought it in.
If, on the other hand, I had taken a loan to purchase the car,
I would have still had my savings available to me to repair the car.
Money management is not as simple as stay out of debt.
If it were a business rather than a car it would have taken me much longer than a year to recover.
Debt – Practice Proper Use
First and foremost there must be understanding.
People fear what they do not understand.
There is no hope of proper use without the comprehension of how it works.
If you are not willing to learn, then head all the warnings you have head about debt.
Accept that debt (in whatever form) is NOT free money!
There are penalties for late payment and non payment,
so the best reason to put yourself into debt is progress.
If the parameters in place are unfair, walk away.
Secondly, you must commit to an ironclad time frame.
If something goes wrong, right or as planned, you should know your options.
Debt is not a situation in which you can change your mind half way through.
Be prepared to face the consequences of your plan.
Finally, the most important factor, repayment.
The ideal situation for debt repayment is that the purchase causing the debt
also provides the funds necessary for debt repayment.
Unfortunately this is seldom guaranteed so there must be a backup plan.
Only in the most dire of situations (such as medical needs)
should you go into debt without a detailed plan of repayment.
Debt without a plan to repay becomes more like to gambling than money management.
My name is Brett Cruickshank
The best way to get out of the 40 hour work week
is through freelancing or entrepreneurship.
Get out of the rat race and find your own path.
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