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As one of my favorite quotes says: “A Wiseman should have money in his head, but not in his heart.”
I follow my money quite closely. I wouldn’t say I track every penny, but I do know where my money goes and why. I wouldn’t call it an obsession but I would call it a passion, and for good reason. Time really IS money. Everything you purchase is just another transition of your time into something else. You spend your time working at your job to earn money, which you then spend (convert) to acquire goods and services of all kinds. Time can be converted into anything, but nothing can be converted back into time. It’s a rare and precious resource each person has a finite supply of, and once it’s gone, that’s it, you’re done.
This leads to the heart of why I don’t like having any debt obligations whatsoever, debt serves as a tightening mechanism on your financial situation and irreversibly damages your conversion of time into money and other things. The more debt you have, the more effort you have to put into your work (job) to generate money just to tread water.
Debt means you are converting your time into someone else’s money.
Debt can be leveraged and utilized to your advantage, but to what end? People have a love hate relationship with risk, but I would argue that taking risks with money you don’t have means you are putting your future on the line. If you start a business with your own money, and the business fails, the only thing you are is back to square one, you can start anew with no debt or other obligations to your name. If you borrow to start a business and you fail, you have to spend years of your life just getting back to break even. This, in my mind, is simply not worth it.
This is why I want a house but no mortgage and a car with no payment. Not having these things means you are on about as secure a footing as you can get financially. Less debt means that you pay less (zero) interest on the money you bring in, and that gives you the freedom to spend it how you see fit, not how your obligation to a person or company dictates.
In the end, not having debt equates to freedom, one of the noblest pursuits of personal finance.
This is why (and I know it’s been a long trip to my point) I don’t want the “stimulus” rebate check being sent out to just about every citizen in the US. The Government is building an increasingly large hole of debt. Each year it’s becoming harder to balance the budget because not only do we have to meet our year to year spending but the amount of interest the taxpayers need to fund every year is increasing. Uncle Sam doesn’t have the money he’s giving out, he’s just borrowing it from other places like China, India, Russia, and others. We’re working harder to help the Government tread water, to break even. Is that where you want to be?