Most people have hardly given the idea of debt a second thought over the last thirty years. People buy houses, cars, and furniture on credit. Plastic money takes care of clothes, meals, vacations, and incidentals. If the burden to finally paying it all becomes too great, the debtwise consumer simply activates his line of credit at the bank, borrows more to pay off the other borrowings, and even has a bit of cash left over. That game is rapidly coming to an end because of high interest rates.
Wednesday, 4 June 2008
Role of Debt
The first considerations about debt are psychological, not financial. Money represents freedom, and when you're in debt you are not free. Cash assets liberate their owner: debt imprisons. The time you spend working is not yours, because the fruits of your labor go to your creditor.Debt decreasing your flexibility. When you're already borrowed to the hilt and an investment opportunity presents itself, you may not be able to take advantage of it.
Subscribe to:
Comments (Atom)
