Debt is the most powerful influence
on human lives in the modern economy.

Debt attempts to sell large parts of your future,
for greater convenience now, thus:

Debt tries to take the future
from any person it touches.

Yes, it gets touchy from here: our modern economy is set up on debt.  We are emerging from the old frontier days, into a real predicament.  Our debt situation is not really moral at this point, but we have to change it ourselves, or Big Commerce will own us until the end of our time on Earth…As far as debt is concerned, here are the big four:
Car Loan
Student Loans
Home Mortgage
Business Loans (for starting a small business)
Credit Card Debt (for racking up often unnecessary daily expenses)

The easiest way to talk about debt is to go straight for the heart of the matter, the home loan.  Most people buy their home with a 30 year mortgage.  If Sam makes $50,000 a year, he might buy a house that costs $100,000.  Most people set themselves up with a mortgage, which when paid of with interest, Sam might have paid the banks a total of $250,000.  So, for the convenience of living in a house now, Sam is giving the bank 3 years of his labor, which is 3 years of his life.  That’s just at first glance.

Consider another option:  Sam instead lives on $25,000 for four years, and uses that $25,000 saved every year to buy his house with cash.  In four years, Sam can buy a house with cash, and never pay a house payment thereafter.

Because Sam has no house payment in the future, his $50,000 a year becomes like $60,000 – so it feels like he gets an enormous promotion.  If he saves that additional $10,000 a year gained, he could accumulate $300,000 in 30 years.  So, in 30 years, Sam will still have his house – and he will also have $260,000. That money is worth even more it was earning Compound Interest all along, and later in life that huge block of money can pay him 6% a year FOREVER.  The original cost of the bank mortgage looks ENORMOUS now doesn’t it!!??

If Sam went with the mortgage, his $100,000 house would have ended up costing him closer to a million dollars AND he would have had to work many extra years to purchase the house at this awful price!!

What’s even worse, is that if Sam’s health took a dip, and he couldn’t pay his mortgage for a while – the banks would take the house from him.  Mortgages are set up so that you are paying almost all bank-interest until the last 5-10 years of the Mortgage. So if the banks take the house – you get little in return!

This is the story of debt!  It’s true for every kind of debt there is.

The actual cost of debt is always enormous, always much bigger than it appears.

Those people who loan out money are not doing it because they have nothing else to do.  They are doing it because it captures enormous parts of your future, and for those years, you are thier employee working for $0 an hour, and zero dollars a year.

The scary part of the modern economy is that our economy is not a ‘solid’ economy.  If the citizens of the country start saving, and stop spending, there would be serious trouble – if citizens stop taking on huge debts – the economy will actually start to collapse.  Debt is in the blood of the modern economy, the very numbers that drive our financial existance!

        This means that the better choices you make financially (living without debts and saving money) the worse the economy does!  The entire financial market pivots upon how many loans the banks give the citizens of America, and the world.

When the Banks can’t find anyone to give loans to, their margins shrink, their stocks topple, and the entire stock market falls with it.  The recession of 2009 was cause because the Banks had already tapped their fullest growth potential. They realized the only way to increase profits year-to-year was to give out bigger debts to people – which also meant giving debts to people who do not have the income to back it up.  When those people started defaulting on their mortgages the gig was up – and the whole world felt the impact.

How terrible is this – that the economy itself will take a severe beating, if you DON’T sign up for more debt? As you comprehend the debt crisis – such as how home mortgages really play out, you begin to see how the debt driven life-style is not the place to be.

The anticipation to spend money you don’t have is INGRAINED in the economy.  This does not involve smart decisions – rather, decisions set up by financiers who know how to profit.  These huge debts appear to become our only options, because when you need something, profiteers are the only ones who show up.

Taking a dead-pan look at debt is essential to understanding why, as a people, we are not breaking free from problems, and instead, we find ourselves only deeper embedded in losing propositions.

Wanting to live larger than our income IS the leading problem.  If a person has no money in savings, then why are they living in a $200,000 dollar house?  Faith?  Most of the world lives in dire poverty, and no amount of faith has fixed that problem yet – there are so many people swallowed by debt that the bankruptcy courts work like a conveyer belt.

Saved money has the potential to become INVESTMENT money – that means your money works for you.

Debt money appears to solve a problem fast, but you are literally enslaving yourself to debtors, AND sacrificing that money – meaning you never have the leverage and financial power to take part in investments at all!

–  Any person’s income can be calculated, and a reduction of debt dependency can be discovered.

–  There are very real steps to avoid deep plunges into the abyss of debt.

–  The most needed change is to accept choices that may seem smaller, or more careful.

–  Live smaller, save more, get smarter, invest better, expand your capability, and finally – your money works for you, instead of you working for the banks!

We will definitely talk about each type of debt –
It’s going to be stiff combat with Big Commerce from here on out!


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