“Debt, n. An ingenious substitute for the chain and whip of the slavedriver.”
“Go ahead and buy that furniture today. You need it now. You can always just pay for it later.”
I was sold.
Don’t Pay Now. . You Can Double the Purchase Price if You Wait a Year!
I admit it. I was fooled by the above sales pitch several years ago. My wife and I had moved 2 hours from 1 city in Florida to another and did not bring any furniture with us. I started a new job as a teacher in a Private school and we knew that a new steady paycheck would be coming in. After settling into the apartment, we went to the furniture and decided to pick up a few cheap things.
But we didn’t have any money yet for even the few cheap things.
“Thats okay”, the nice furniture salesman said. “You can pick up the items now and wait a whole year before having to pay for them.”
“Perfect!”
Five years later, we just finished paying for the same cheap furniture that the jerk salesman conned us into.. Its the ugliest couches you have ever seen.
Lie #1: Debt is a Smart Investment
Simply writing the above statement makes my fingers laugh, but many times we are conned into it. The slick advertisements say that we must spend money in order to make money.. even if we don’t have it. Go ahead and purchase those designer clothes and flashy car. It’ll make you appear successful and therefore increase your success.
What?
I was reading over John Cummuta’s Debt to Life Program and he completely debunked this myth. He showed that huge debt removes both your control and freedom from your life and greatly increases your stress thereby risking your health.
Doesn’t sound much like a smart investment to me.
Lie #2: Debt is a Necessity to a Happy Life
“Go ahead and put that new iPad on a credit card. You deserve to be happy and imagine the possibilities that it will bring to your life.” The world tries to tell us that you cannot be happy and prosperous these days without debt. They try to sell us that we’d never be able to afford nice things or go nice places so might as well go into debt doing them now.. after all, you only live once.
They are right. If we go into debt to buy little pleasures then we’ll never be able to afford the better things life has to offer. I am not a numbers guy but John’s program shows how long it takes to pay off a single maxed out credit card. I don’t even need to imagine 5 or 6. It would take a lifetime.
On the other hand, I really like Dave Ramsey’s mantra, “If you live like nobody else today then you’ll enjoy life like nobody else tomorrow”.. or something like that.
Lie #3: Everyone is Doing it
Wouldn’t we like to believe that we are out of high school and grew beyond these petty manipulative tricks. “Smoke this cigarette. Everyone’s doing it.”, “Buy these baggy pants. Everyone wears them.”, “Go ahead and 100% finance that new car. Its alright. Its our most popular smart ownership plan.”
What?
People will always follow the crowd. Everyone else is jumping off that cliff? They must be on to something. Here I go..
Psychology tells us that we are geared towards following the popular vote even if it goes against our better judgment. The world thrives on manipulating us many times in very subtle ways, but smart people are able to recognize this trick and see through the scam.
They know to trust their insticts.. If it stinks like a pig and rolls around in the mud.
No matter if you dress it up in a tuxedo and put a top hat on it.. Its still a pig.
Debt is a pig.
The Truth I Learned About Debt
I am not one of those anti-debt for everything kind of guys. Sometimes, you must accrue a little debt to increase your earning potential. I believe education is this way. Many people will not receive enough financial aid to afford a good education, but you can be sure that you will greatly increase your earning capacity with the more education that you obtain.
I am definitely not a financial expert. I am conned as often as the next guy standing in front of a new shiny Porsche dreaming about what could be. My furniture story shows why you should run screaming for the hills if you ever see me selling my own financial services.
But I have made an effort to search out and learn from people who seem smart with money. I don’t mean people who learn secrets about conning the system and make a fortune by taking advantage of others. I’ve made a conscious effort to search out experts who have become financially happy by working hard, being prudent and showing self-discipline because I believe that is the way God encourages us to live.
I have read the popular blog GetRichSlowly.org for over 4 years now and have picked up a few of Dave Ramsey’s resources. I am in the process of going through John Cummuta’s Debt to Wealth program and have picked on 1 common theme through everything that I find.
The world is wrong. Debt is not central to wealth, happiness and prosperity. True wealth begins when we are content with our current blessings and make smart decisions for today.
Resources Mentioned In The Article
John Cummuta – Debt to Wealth Program . This program is more than just another how-to guide preaching to you about debt. We all know that debt is bad, but how do we fix it? In this affordable 3 module program, John walks with you every step to getting out of debt and into financial freedom. It doesn’t matter your debt situation, he will provide the tools and advice to get you on track. There is no gimmicks and you don’t need any extra income. For only $30, you will get a time-tested path to free you from the burdens of debt.
Dave Ramsey . I don’t believe I need to provide a description for this man. He is everywhere. His slightly annoying but entertaining voice is on the radio, television, books, conferences.. wherever. He may be a little too blunt for some people, but he’s honest and real. His books and teachings are all based on smart choices with money.
GetRichSlowly.org . This blog has been around for many years and its owner, J.D. Roth has grown very respected in the Personal Finance sector of the blogosphere. He started the blog while he was thousands of dollars in debt and used it as a catalyst to help him learn about being money smart. As you can tell from the site name, he does not promote Get Rich Quick schemes. He is about smart money decisions and now is at a point where he is truly financially free.
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