A lot of Americans and people in other developed countries have gotten addicted to an insidious poison that they wrongly call a lifesaver. This poison saps our freedom and our portfolio. It is called debt.
Modern economists boast loudly of the benefits of liquidity, which is their pet name for debt. “With liquidity,” they urge, “We can feed the masses and not have to raise taxes.” What these short sighted individuals ignore is the necessity to be under their creditors’ control. Financial radio host Dave Ramsey used to think that debt was a tool that you use to increase your wealth. He got this idea from a finance professor in college. He later changed his mind.
To stay out of debt is simply an exercise in postponing immediate gratification for longer term benefits. The average family feels that they need to send their children to college. However, they are unwilling to make the financial sacrifices to afford even a cheap school. In order to go to a high tier school, they put themselves in slavery to the Federal Government’s student loan program. After graduation, the children leave their school with an entitlement mentality that they carry with them the rest of their life. The average U.S. citizen with debt has total debt at $181,571, which is over twice the average household income of $73,298.
There are some powerful ways you can remove debt if you are a part of this statistic. It is important to remember, however, that there is no gain without some pain. You will suffer if you choose to become one of the few who is not a slave of the international banking cartels.
- Be Unpopular – Popularity has its price. Almost everyone wants it. If you have a scarce quantity of something with high demand, it will raise the price. Affix unpopularity to whatever you are thinking about doing or buying, and you will find lower prices that can save you money.
- Be Content – Rather than thinking about what you do not have, think about what you do. Make a daily list of the things you have that you enjoy. Contentment is a rare quality, but it is essential if you want to remain debt free.
- Live Far Below Your Means – If you are making $100,000, you should be living on $40,000. The rest should be going to debt payments, emergency preparedness, and taxes. Do not copy the Joneses in living $200,000 when you only have a $100,000 income. That is a recipe for life long debt. If you make $20,000, by necessity you will have to pay more to live. Downsize a lot. Move in with relatives. Take the nasty apartment downtown. Move overseas to China and teach English where cost of living is lower. Debt elimination requires pain. It is worth it when you are free.
- Work Hard – There is a reason that Steve Jobs told President Obama he could not make the iPhone in the United States. There simply is not enough hard working low income labor to make it cost effective. American workers demand all the perks, and underachieve. Be the rare employee who over achieves on low pay, and you will soon be the boss.
- Move – Do not live in Southern California or New York because your friends in college are. Sacrifice is key. Cost of living varies wildly based on the popularity of a location. You can construct a cost of living income indicator using the equation B=I/C where I is your annual income and C is the average living cost. You want B to be large. If you live in a place with a large B, you will be happy and debt free eventually.