Debt is like junk food & # 8212; although best avoided, moderate amounts
won t kill you, but too much drag on you and make your life suck. It allows
us to buy things we can not pay, but at a higher price. Ultimately, it is a
great contributor to today's rat race. Quite unfortunately, many people get
overwhelmed.
Governments aren t be immune. Thank you to the Federal Reserve, the US has
an unlimited credit line to run up an astronomical amount of debt. This is
what happens when politicians are struggling to balance their own
checkbooks are charging. It's little different to many other countries, but
all that of another case.
The money of public spending they have t is an inflationary pressure. As
Ezra Pound (poet, & # 8221 deplorable, radio commentator, and political
prisoner) noted, compound interest corrupts everything it touches. Is it
any wonder that the world economy runs on fairy dust?
Debt Types
Surely not!
Payments on loans for a house or a car are the least bad; after paying, you
have a high-value tangible property. It is difficult to avoid, since few
people keep large amounts of money on hand. Student loans are another
source of the high-ticket debt. It's fine as long as you can get a decent
job with the degree. (Otherwise, you're the stream.) The basic mitigation
strategies are to gain the least possible debt purchases for the lowest
interest rates, and be realistic about your return on investment.
Other sources of debt are pernicious. The worst are predatory lending
schemes such as payday loans, securities lending and pawn shops. These are
offers of miller with exorbitant interest rates, and you should consider
them as attractive as getting an arm and a leg nibbled by a Gator.
Credit cards are also major offenders; credit limits give you enough rope
to hang themselves, they have a relatively high interest, and won business
please get you when you're down. If you re repay them in full every month,
and they have a rewards program, they're actually a benefit. However, if
you're running revolving balances, then you're eating a load of interest,
and it adds.
For you, that's as productive as power several $ 20 bills in a paper
shredder monthly damn. (Meanwhile, the banksters get enough sauce to float
their customers an aircraft carrier.) Then, you end up paying interest on
interest; that really suck. Without going into the exponential math, that s
just say that really eats into your future. Countless people are stuck in a
spiral of debt, barely scraping by while unable to do more than the minimum
payments. If you re a balance each month, it time to make a plan to free
you.
The solution
Time to get real
If you have a pile of old bills to pay & # 8212; or worse, you don t have
enough to remain solvent without touching the plastic & # 8212; then you
have to make difficult choices. In principle, however, it is actually quite
simple. Cash flow is an input-output equation. This means making more
money, spend less, or both.
On the revenue side, get a better salary is easier said than done, but be
on the lookout for promotions or better jobs. However, obtaining a side gig
is easier. It doesn t even be a stable job to add: personal training, IT
consulting, writing a book, help people moving, remodeling, rope tow
collection for the British Navy, whatever. If you have lots of collectibles
you don t need to sell them.
On the expenditure side, often this is easier said than done. As a society,
we're suffering from the disease of & # 8221 affluenza;. This usually
involves keeping with neighbors or buy shit we don t need. Women get a bad
reputation for retail therapy, but men aren t immune. For everyone, that's
both irrational and quite common.
Reducing Expenses
Fun until the bills come due
Obviously, an ounce of prevention is worth a pound of cure. Take the
example of Fountain Hughes, who lived more than a century without even
spending a nickel on the store credit. Although he was a former slave (thus
didn t get a first class education), it was much more sensitive than the
millions of shopaholics legs with plastic gills. Do not spend more than you
earn is a pretty obvious concept.
Being a great stingy gives benefits. For example, do you really need to buy
a $ 5 cup of coffee every day at a shop in the signaling chain virtue? This
adds. Get your own coffee machine! Shop around for a decent price, or look
on the used market, and say goodbye to coffee Fivebucks forever.
Do you have cable TV? Why? It's a lot of crap and propaganda that you don t
need. It's easy to download most of the things to watch. If you're addicted
to television, then get an antenna for fucking idiot box.
For consumer goods, see stores for bargains, garage sales and look for
online auctions and classified ads. Restaurants are also an unnecessary
expense; the food is considerably marked, so learn to cook can save you a
bit. bar tabs can also add considerably. Otherwise, do you really need a
new cell phone every year, and the unlimited data plan? Anyway, we hope you
get the picture.
Advertising is very sophisticated, intensely studied since the 1950s Even
the placement of items in food stores is well documented. It time to set
it! Distinguish between want-to-haves versus need-to-haves. Will you die if
you don t have a particular item? You probably won t, other than food or
medical care. Also ask yourself, life will really be much better if you
have? Always remember, money is a good servant but a bad master.
Finally, if someone consumes many times your resources without providing
reciprocal value, it's time to get the moocher your back. The party's over;
you have your own bills to pay. (I can count on one hand the number of
people I know who are honest enough to repay the loans, and still have a
finger rest to turn off the rest.) If your brother smoke meth on your couch
all day, it & # 8217, the time for him to get his ass to rehab. Helping a
girlfriend from time to time and isn t too bad reason, but never do for
someone you stringing along.
the specificities
If you follow the above, then you should be able to stop the bleeding of
your budget and have a surplus to pay off old bills. It won t happen
overnight, but to butch it.
Which debt should you pay first, then other next? Three options:
The one with the highest interest
The one with the lowest balance
The one with the company you hate most
The first option is the most rational, mathematically because it means
you'll end up losing less money on interest. The second is the & # 8221
debt snowball; strategy, beneficial since you'll quickly see tangible signs
of progress in signing fewer controls. The third will be psychologically
satisfying too. It s your bills and your decision.
You can call the credit card companies and request a lower rate; He
sometimes do. You can also sign-roll to balance transfer offers, but read
the fine print (it's not free), and remember that's just a temporary
measure.
What to do when you're free
Once the monkey of debt is on your back, you will have a decent surplus do
not feed $ 20 bills in the paper shredder each month. The first priority is
to create an emergency fund; enough to cover unexpected repairs and similar
cars. Then it is a good idea to save money Fuck you & # 8220; just in case.
Once you have a few thousand clams, you might consider putting in a decent
investment. I mean a well diversified portfolio, rather than a Ponzi scheme
or another scam. That's worthy of its own discussion stay tuned.
Finally, once you've reached your goal, never dig into another pit. You
learned your lesson the first time, right? Now go out and set you free.
You're going to cry bankster.
More: 5 myths in America who call Realtalk
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