Working For a Dead Horse

If you plan to have money, you will do well to avoid running into debt. Nothing drags a person down like debt.

I received some mail from the post today, most were unsolicited from credit card companies trying to lure me into debt. As I tore them up, I remembered a time when my credit card and student loan debts were a big burden.

Getting a credit card was easy as a student; I got mine during Fresher’s week - the first week for new university students - a time when all the banks target naïve students by offering free money and promising an easy life through their “best rate” loans and credit cards.

Fortunately, I did not go crazy with my credit cards, splashing out on things I didn’t need, although still a burden my debts were modest - compared to some who had debts over £10,000. I understand it is common now for students to graduate with debts over £20,000. Talk about an uphill struggle.

The first four years after graduation was devoted to nothing but clearing my debts. It was a time when nothing bothered me most than the debt hanging around my neck. I felt the task of clearing it was insurmountable. I have since vowed to be debt free, as I consider it a very good position to be in, especially debts spent on consumer goods (bad debt).

Is there good debt you ask? Yes, good debt is where you borrow money to buy something that can be sold later for profit or something that increases in value, the money borrowed in this context is seen as an investment. You can say the money spent is working for you.

Getting in debt for what you eat, drink and wear on the other hand is to be avoided. As P.T Barnum said, working for what you have eaten or worn out, but which you still have to pay for is "working for a dead horse”, as you have nothing to show for your money.

Debt you see robs you of self-respect and makes you almost despise yourself because you are nothing but a slave to your creditor. Your creditor goes to bed at night and wakes up in the morning better off, because his(her) interest has increased during the night, but you grow poorer while you are sleeping, for the interest is accumulating against you.

Having bad debt is giving money the permission to work against you, from my experience there is no chance of you being successful if you take this position. If you must get into debt, let it be for something that will make you money.