Money values: Debt is counterproductive

5 Mar

 debt
 
 
 It was unseasonably warm on that early December afternoon in 1993.  Our 40 or so guests were crammed in the backyard of our family friend’s house where brisket and beans were served.  Jennifer and I were so busy with guests, pictures, and a ”Money Dance”, we didn’t have a chance to taste the home cooked meal prepared for us all before we were thrown in our car and handed the keys to our honeymoon hotel room.  Looking back now, we were lucky to find each other at 18 and marry a year later while we had very little money.  We couldn’t afford the reception hall, band, professional photographer, and a magazine ready wedding dress.  We spent somewhere near $1000 ($1,612 inflation adjusted for today) for the event, a far cry from the average $28,000 wedding today. 
 
Staying together for these 20 years has allowed our financials to stay trim and stabilize.  I admit, I was one of the lucky ones who found a mate that could stand me for this long.  I had not known it at that time, but Jennifer and I have very compatible money values.  We both believe; debt is counterproductive, great value is had with patience, and invested capital can set you free.  This is Part 1 of 3 discussing my family’s money values.  Look for part 2 & 3 in the weeks to come.
 
 
Debt is counterproductive:
 
Debt becomes heavy over time if you don’t takes steps to reduce and eliminate it.  Debt is similar to the storage of fat cells in a heavy person’s body. That first double cheeseburger with crispy lawn green lettuce, juicy tomatoes, and sizzling bacon didn’t physically appear to make any difference to that figure after consumed.  As more cheeseburger’s (financed widgets) are taken on, the fat (debt) begins to pile up.  Just as the extreme buildup of fat cells limit a person’s ability to physically stretch and be flexible, debt limits a person’s flexibility.  They are unable to adapt to new, different, or changing investment environments.  The weight of the debt (fat) prevents any chance of possessing surplus funds to invest when the time is right.
 
Similar to an overweight person driving around on a scooter, debt limits mobility.  They can no longer travel very far and fast.  Their options may be limited.   Often, a person with debt feels stuck and non mobile, they can not take advantage of other higher paying opportunities elsewhere.  The debt (fat) is holding them back.  Debt is also hungry, and needs to be fed.  Insofar as food is fuel to a fat person’s addictions, debt requires a constant feed of interest payments.  These interest payments (fat) if left to build up over time, take an ever-increasing time to pay off (lose weight).   Debt is extremely counterproductive to ones ability to reach early retirement and must be eliminated to have a healthy level playing field to start saving and investing.  
 
 
How to pay off debt:
 
1.  Stop buying crap
2.  Stop buying crap
3.  Stop buying crap
 
If you forget steps, 1-3, listen to step 4.
 
4.  Stop buying crap
5.  Now that you have a bit of extra money this next pay check, pay off the highest interest bearing account.
6. Stop buying crap, because I know you still are.
7. Look for other ways to reduce your expenses and continue to pay off interest accounts until your debt has vanished.
 
 
Does your spending need gastric bypass surgery to curb its appetite?  Remember; pay off that debt, save and invest the rest, and join us on the other side and retire before you are dead. 
 

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One Response to “Money values: Debt is counterproductive”

  1. Diane March 21, 2014 at 1:51 pm #

    I like your elevator line: “Stop buying shit” a simple, basic message.

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