Saturday, January 24, 2009

Hear No Evil - Pay Off Debt

On my way to the gym this afternoon, I heard a radio money adviser tell a caller to not pay off her student loans and invest in the stock market. Of course, I SCREAMED NOOOOOOO! BAD ADVICE! He went on to say that she should treat the $40,000 loan like a mortgage.

I learned from a few folks who believe in freedom, not the world's system of money management, that debt is an oppressive trap. (For Christians, we are told in Proverbs 22:7 that the borrower is slave to the lender. It's very true.) Modern day slavery with money simply means that before you deposit your next paycheck, someone else has dibs on your earnings because you owe them. In essence, you are only working to pay them, not to enjoy the fruit of your labor. It didn't take me too long to realize that the joy of new expensive stuff doesn't last very long and to maintain the "high" you gotta keep buying stuff.

I am totally into how Dave Ramsey teaches us to avoid stupid tax: paying for stuff we don't need with money we don't have, to impress people we don't really like. I practice that line of reasoning. I understand life happens: If you are sick and you have to go in debt to get treatment, I think that one is a no-brainer. If your car dies and the cost to raise it from the dead greatly exceeds its value, and you must get a basic one to get to work, you might need a loan. I get that. "Justifying" a purchase of a new luxury car that equals over half of your annual salary, I don't think so.

The radio guy went on to say that she should take the next 20 or 30 years to pay off the debt. You gotta be kidding! Who wants that poopy diaper around for that long? What if she gets sick? What if she loses her job? What if she wants to live a simpler life in a few years and can't leave a high paying job for a sustainable one at lower pay in exchange for more time to enjoy her life? Those are the rational what-if questions that need review when deciding to carry a huge debt load. Those are the questions I asked myself 4 years ago when I began my debt snowball. Life in the pursuit of living without any debt including the mortgage: Freedom!

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