Since the time i was in school i had a feeling that there is something wrong with the world’s financial system. I have finally found it: loans! !Yeah you heard me right: loans are a problem in a sound financial system. But, you may ask, are you crazy? How can you even utter those words and on the internet ? Well, simple: because it is the truth!!
The truth is, when we are borrowing or taking loans from anywhere (banks, funds, …), we are actually telling ourself that we don’t have a financial problem, even if we are living beyond our abilities. In such a case, we are spending more than what we are earning. We all know that failing in business is to be unable to generate more money than we are investing in our business venture. The irony is that we do not apply this principle on our lives, and when we cannot afford to NOT buy something we take loans. The truth is, you can start being rich right away by living a dept-free life because it is the only way true riches are achieved.
i have compiled a list of ten reasons why borrowing money is bad
- Free money is expensive!!! Who told you that there is free lunch? You will pay for your free money for quite some time
- It gives false sense of security – By creating a long term problem to solve an immediate one.
- It weakens you -Whoever lends you money is in control of your life/business, literally. He can pull the plug and you are gone.
- It is a sign of failure - Spending more than what you can earn by yourself is a sign of failure. How long are you going to hold on that? Probably not long, unless you do like governments around the world (Remember Treasury bills?).
- When you owe money you are more vulnerable than when you don’t - Look at banks. When the customers decide to suddenly withdraw their cash without warning, banks normally go bust.
- It does not help you to be realistic - Well, that is obvious. You don’t think you don’t have money when you have it from a credit or a loan, do you?
- When you are vulnerable, you become nervous – True, because you feel threatened, so you risk acting irresponsibly.
- Borrowing is a sign of poverty - Yes, because you cannot sustain yourself, you need someone else’s help. Too bad.
- Debt-free life is the beginning of riches - Yes. When you live such a life you don’t have so many worries about other people having a share of your bread.
- Debt-free life is life with no string attached - You don’t have the ability to share what you have when you owe money because you don’t own any money. You don’t have anything to give.
Now before you start bashing me (Ooops, you may have started already!!!), i want to tell you that there is an alternative to that debt-ridden financial system which does not work.
I will continue in the next post.