Saturday, April 07, 2007

Debt and Financial Freedom Don't Mix

One of my least favorite subjects in the financial freedom arena is debt reduction. People use all kinds of reasons to justify their debt and it becomes a very emotional struggle to eliminate it. I am pleased that I have adopted the "Not So Easy" approach to financial freedom. That way I don't have to come up with any psychological approaches to achieving financial independence. Why pretend that something is easy - when it's not….

My article "Debt Reduction: The Weed-Out Course on the Road to Financial Freedom" generated quite a bit of discussion a few months back. In the article, I challenged Dave Ramsey's psychological approach to debt reduction and took some heat for it. An article last week, reminded me on that article and also why debt crushes dreams. Here are few paragraphs.

"What has happened in the past six years is extraordinary. The debt that has been accumulated will be with most of the borrowers for the rest of their lives. They have become debt slaves to the banks and tax slaves to our government. There are those in our society that will remain in perpetual debt. A debt that is almost impossible to pay off. Their debt game is how our society is being controlled and destroyed. Our children are bombarded on TV with ads or situations where the credit card is the preferred mode of payment. Upon entering college students are deluged with credit card offers. By the time they graduate they have $20,000 in card debt and $30,000 in studying loan debt. This debt in many cases stays with these graduates for life. The banks want you in debt from cradle to grave. They do not want consumers who regularly pay off their debt. They can't make any money off them.

These conditions make the bank the boss. This perpetual debt makes the consumer subservient, not just because his credit rating may be used against him, but it shades his political perspective as well. The debt is a privilege meted out by the all powerful bank whether it is your home or your credit card or your vehicles. You should bow down to MasterCard, Visa and America Express, because they are doing you a priceless favor."

"Perpetual debt makes the consumer subservient" that statement alone is enough to inspire me to stay out of debt. I don't need Ramsey's or anyone else's gimmicks. Getting your debt under control is one of many "mind-shifts" necessary for anyone seriously considering walking the path to financial freedom.

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