I have the opportunity of corresponding with various "experts" on personal finance issues, especially debt related matters. This broad perspective has allowed me to connect the dots in terms of what's really going on.
To summarize, the stores at the mall care about one thing. They care about how much of your hard earned money they can take out of your wallet. Wait, actually that isn't technically true, because they are not satisfied with what's in your wallet. They want what's in your wallet and even more. They want you to borrow money from Mastercard, Visa, go for an online payday loan service so that you can spend even more money at their store.
Knowing this situation, you may ask why would a consumer agree to spend their hard earned money and take on debt to buy items?
The answer is very simple. Madison Avenue has "sold" Americans on this idea that we all need more stuff to make ourselves feel good. We need to have the latest and greatest television, car, clothing, etc. We have been conditioned to believe this and many Americans are living paycheck to paycheck because of this notion.
One of greatest creations on the planet is compound interest. The real way to wealth is to get as much money compounding year after year at a nice rate of return. You will see the growth in your dollars, incredible. Compound interest also applies to debt.
When you take on debt, you are agreeing to pay rather than receive compound interest to someone else. It starts the clock running and won't stop until you have back the loan plus the interest.
You don't need more stuff to make you feel good. You don't need more stuff to make your friends and neighbors like you. What really feels good is eliminating debt from your life so you can be the one benefiting from compound interest, not being ruined by it.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment