7 Reasons to Stay Out of Debt
You should stay out of debt no matter what. No excuses. If you want to create wealth, stay stress free and happy, never borrow money.
Live below your means. I know, I know but Robert Kiyosaki says that there is “good” and “bad” debt. That currency is created from debt.
Listen, all living below your means denotes is that you should make more than you spend. That’s all. If you want more, make more and spend less. But why?
Here is why.
1. Debt is a Habitual Addiction
To have a good life, you must have good habits.
Addictions fall in the category of bad habits that are time consuming to re-wire. It is not impossible.
However, it takes a lot of determination and will. And if there is a will, there is a way.
Since most people live on habitual auto-pilot, the fall into the debt trap time and time again unless they get sick and tired of the chains and break them for good.
P. T. Barnum emphasizes the danger of borrowing once and getting addicted to deserving more than you earn:
Young men starting in life should avoid running into debt. There is scarcely anything that drags a person down like debt. It is a slavish position to get in, yet we find many a young man, hardly out of his “teens,” running in debt. He meets a chum and says, “Look at this: I have got trusted for a new suit of clothes.” He seems to look upon the clothes as so much given to him; well, it frequently is so, but, if he succeeds in paying and then gets trusted again, he is adopting a habit which will keep him in poverty through life. Debt robs a man of his self-respect, and makes him almost despise himself. Grunting and groaning and working for what he has eaten up or worn out, and now when he is called upon to pay up, he has nothing to show for his money; this is properly termed “working for a dead horse.” I do not speak of merchants buying and selling on credit, or of those who buy on credit in order to turn the purchase to a profit.
2. To Protect Your Life Energy
What is money? Money is your life energy.
You have a limited amount of energy in a given time.
Money, on the other hand, is abundant. You do not want to get a high pay- high stress job to make a lot of money because you will lose time you would otherwise spend with loved ones and shorten your life due to stress.
Work smarter, not harder. Do not let stuff run your life so you have to borrow money.
3. To Make Money Work for You
Do not sell your time and energy for money – make it work for you.
The construct of money deceives to believe that you must work hard for it and misleads you into the scarcity mindset.
Money is not scarce, your time on this planet is. Relegate your master to the position of servant and rip the benefits it offers you when you make money serve you instead:
Money is in some respects like fire; it is a very excellent servant but a terrible master. When you have it mastering you; when interest is constantly piling up against you, it will keep you down in the worst kind of slavery. But let money work for you, and you have the most devoted servant in the world. It is no “eye-servant.” There is nothing animate or inanimate that will work so faithfully as money when placed at interest, well secured. It works night and day, and in wet or dry weather.
Golden Rules for Making Money, P. T. Barnum
4. To Eliminate Stress
A house, a car (or several), a closets of clothes and shoes you have not worn in years. Does it sound familiar?
You own none of it – they all own you. By the way, if you live in the United Sates and buy a piece of real estate or land here with cash, you do not own it, do you?
Try not paying taxes or home owner association fees once. You will see who owns it.
Since most cannot afford to buy a house outright, they have to borrow money.
Over the life of the loan those who make such a purchase must expect to pay at least three times of the original price more depending on the interest rate.
We have been programmed to think that a house is an investment. Does it make sense to pay for something three times more of its original price? You essentially become a slave in exchange for a place to live.
Would you rather find an inexpensive place somewhere else and direct your energy toward building a business and improving yourself.
All of it one hundred percent stress free. Besides, you can guarantee better returns from investing in yourself regardless of economic conditions than from real estate and stock market.
Health is wealth because it puts you in a state of mind that helps you succeed and enables you to become financially wealthy.
Outstanding health enables you to win and thrive. By eliminating stress from debt you open up an opportunity to think and grow rich.
5. To Be Wealthy
Debt is extremely expensive to the borrower. Interest makes the lender wealthy though.
You pay X times more for something that seemed such a good deal. You cannot get ahead by borrowing money. Nor can you ever get wealthy through debt.
Let us reverse engineer the conventional success path. Get education (student loan). get a good job to get a house (mortgage), a car (auto loan), and take 2-week lavish vacations (credit cards) .
And you are on the hook until the end of your days and in debt up to your ears. You work a lot and hard.
You go through the daily grind apathetically and buy more stuff on credit to numb the pain of soulless drudgery. As a result, you still have no cashflow and have accumulated no wealth.
What do you do to break the vicious circle? You wake up and make a decision to quit your job so you can build a business. You get very sick and tired of chasing your tail.
You sell and give away stuff. You find a way not to own a car. You find an inexpensive place to live and focus on generating cash flow spending very little of your income.
Since you no longer borrow money and spend very little, your money grows.
As a result, you have built wealth and bought yourself time.
6. To Have Self Esteem and Higher Purpose
When you have to constantly think of your debt obligations, you do not have time to concentrate on anything else.
Let alone on higher aspirations, You do things that give extra cash forgetting of what you are and what your true purpose is. You never have time on personal growth and self improvement.
To respect yourself and to obtain the luxury of purposeful work, you must get rid of debt. You may have noticed, that I am not advocating early retirement.
I believe that intentional purposeful work promotes personal growth and self-esteem.
We must build financial security that permits us to work purposefully without worrying about money.
7. To Be Free
When you do not owe anyone, you have control of your time and life,
You can keep all your income. You can pick up and move when you want where you desire. Even if you do not have a lot of money.
Internet gives us the flexibility of building businesses and generating income from anywhere in the world. You no longer stress out about meeting debt obligations and obtain freedom and inner peace.