Are You an Indentured Servant? Saying No To Debt

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What does the American Dream look like to you? It's different for everyone. Some think it's champagne and private jets while others feel like it's the opportunity for peaceful living among friends and family. No matter your definition, there's a financial component to prosperity that seems to evade most people. Why is it that some people seem to prosper more than others? Is it the opportunities afforded to those of higher social standing? Is it personal motivation or that charismatic x-factor? I think our society is littered with examples of people who prosper despite the absence of these things in their lives. I have personally observed that those who obtain their version of the American Dream seem to have one thing in common. They understand basic wealth principles and actively employ them in their daily lives. 

Debt is the Enemy

Do you know who loans money? Wealthy people. Do you know who borrows money? Poor people. You can subscribe to creative finance techniques which prove that when you borrow money at a lower rate than the return from investing it that the margin is profit and that would be correct if there was no risk involved. The problem is that most average investors haven't saved enough money to be able to withstand the amount or risk they take when they employ advanced tactics like this one. The wealthy have always been landowners, lenders, and prudent business owners. Those that we term as disadvantaged and poor have placed themselves into a modern day version of indentured servitude by accepting debt.

You'll buy a new car, a home, and maybe a boat sacrificing the American Dram for today's lifestyle. Your children will watch you and repeat the process. Your purchases require leveraged debt which causes you to not only pay the wealthy for the use of their money, but it commits you to spending more of your life working a job that profits the business owners. They learned long ago that if they can get you to work for them that your toil and passion will make them more profitable giving them a bigger piece of the Dream. 

One of the keys to selling a successful product is to build something that is consumable. Manufacturers don't want you to have something that lasts forever because then they can't sell it to you again. Take the iPhone for example. It was built originally as an all-in-one device that would upgrade its operating system so you wouldn't have to purchase the hardware ever again. How many iPhones has the average person owned since they were introduced just eight years ago? You're being sold an illusion, but the reality is that you go to work to earn resources that you give away as quickly as they come in the door.

If you need to buy a car, buy one with the money you've saved. Buy a used car that's three to five years old and will last you at least seven years. If you need a loan to buy a car it's probably more car than you can afford. If you can't afford a car but need transportation, look for public transportation and carpools. The point is that there are always less costly ways to satisfy your needs if you're just willing to sacrifice your lifestyle in the present for your lifestyle in the future.

"Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." - Will Smith

Don't bend to others. Take control of your life and make your future. This country doesn't guarantee success, but it does offer the opportunity. We consider them to be one in the same but they're not. Nobody owes you anything and nobody is going to give you anything. They also aren't very excited about letting you take what you need from them, so you have to be smart and build it on your own.

Getting Ahead

  • You'll find the elusive dream by not living outside your means. 
  • Only spend the money that you have left after you've paid your bills and saved money.
  • Never use credit to buy luxuries you can't afford. Take care of yourself before you try to take care of others. There's a reason the flight attendants tell you to put the oxygen on yourself before your kids. If you go under you won't be able to help anyone around you.
  • Pay off your current debt quickly by targeting the highest interest rates first.

  • Making saving part of your lifestyle and get excited about accumulation. Debt enslaves us and Assets set us free.