How Debt Spurs Economic Growth

Debt is harsh taskmaster. End the stress of student loans, credit card debt and mortgages. Break the chains of debt. Live debt-free. #daveramsey #debtproblems #stress #studentloans #creditcarddebtAs mankind evolved they needed a way to store value that wasn’t cumbersome. Sure, trading a cow for supplies seems like a good idea, but what about wages? Do you get a cow or a peck of barley for a good day of labor? Well actually, yes. That is exactly what happened. It held back commerce because you needed an immediate need between two or more parties to have an equitable exchange of value. And God forbid you were really good at mass-producing something. The oversupply of that item would make it worthless.

Even before mankind invented money as a store of wealth, people were able to borrow. Rather than make an equitable trade now, you would promise to provide a good or service later. And you better keep up your end of the bargain. The punishment for reneging on a debt was severe. You could lose a hand, be imprisoned, forced into servitude (slavery) or outright killed. No, in the early days of money and prior, it was best to honor your commitments. The alternative was unthinkable.

Slavery was a common result for nonpayment of debts. Debt was not entered into lightly as it put your freedom at risk. The Old Testament of the Bible has several passages which show how ancient man dealt with debt absconders. They were merciless.




The Invention of Money and How It Works

Debt has lost much of its fearsomeness nowadays. I promise not to get religious on y’all, but need I remind you around half of the parables of Jesus dealt with money and wealth. Money is important. People knew it two thousand years ago and they know it today. Unfortunately, people don’t understand it much better than the Classical Greeks did as they tried to come to terms with the new way to store and transfer value.

Free yourself from the slavery of debt. End the burden and interest expense adding stress to your life. End debt. #enddebt #debtfree #nomoredebt #studentloans #paydayloansMankind has gone from, “Neither a borrower, nor a lender be”, to, “You need a good credit score to live in modern society.” The dividing line happened somewhere between the Shakespearean play Hamlet—where the above phrase comes from—and today. Lending was always considered risky business for all parties involved.

Money makes it easier to borrow (and cheat). Governments have been debasing money since its invention. Don’t worry. The proletariat figured out how to shave coins before the first day was out. A deal between two people needed to be honored and violence could result if one party felt the other party cut corners on their end of the deal if both ends of the transaction happened at different times. The horse you promised in six months for the purchase of twenty acres of land might have developed a lame hoof. Negotiations took a decidedly more hostile approach afterwards.

The more people started to understand money the worse it got. Money requires a level of trust. If most people refused to accept the item used as money at a set rate of value it becomes useless. That’s why precious metals and other small valuable items were the first forms of money. Government debasement and coin shaving was a serious issue. Debasement destroyed trust in government issued coins and coin shaving was a crime because it was honing in on the government’s debasement turf.

Then somebody got the idea to create fiat money. Fiat money is declared valuable by the government by decree. I sometimes call cryptocurrencies fiat money when in fact they are not. My argument is cryptocurrencies are declared by decree of the blockchain rather than the government. Both declare value for something that has none and gets us all to agree the fantasy is real. That is why money has value today; because we all agree to pretend it does. Fiat money in not backed by anything of value, just faith in the issuing government. Good luck with that.




The Problem with Debt

In modern times debt seems a reasonably risk-free way to transact business. In my office we frequently bypass even fiat money for a check which we trust the bank will honor with fiat money or we allow the client to take a loan from their credit card company which once again pays us in fiat money. It’s all based on trust.

But risk-free (or nearly so) transactions are relatively modern. Reneging on a debt was a serious matter for good reason. The lender would have a hard time replacing the lost value promised. Powerful banking families and governments were also the ones doing the lending so they were inspired to formulate laws with serious consequences for not upholding your end of the obligation. And as bad as people knew debt was, they could still get in trouble. The landlord wanted rent, the church wanted a tithe and the government wanted taxes. You were a serf or risked your eternal soul. And your taxes were an implied debt forced upon you.

And still the government loves debt!

Why the Government Wants You to be a Slave Go into Debt

Economists falsely believe that more debt lubricates an economy. It doesn’t. It sucks interest from productive labor and gives nothing in return. Think about it for a second. Human beings dreamed up a store of wealth based on trust and that had only pretend value. Then, we convinced people if we let them use the fantasy value for a short while they would have to go into slavery get a job and earn imaginary value to repay the pretend money. The only “real” thing in this whole process is the part where you trade part of your life to satisfy your obligation based on fiat money. (Bet you feel kinda foolish right now, don’tcha?)

Well, if debt doesn’t lubricate economic growth as the government and economists all tell us, why is it so darn important for the Federal Reserve to encourage people to borrow more? The answer is in the above lecture! Slavery!

Yes, borrowed money is generally spent instantly, causing the short-term illusion of economic growth. Heck, when you put a vacation on the credit card it’s all fun and games. PARTY TIME! When you get back from vacation it still feels good. Then the payments come due. Still okay, but not as much fun. Then you have a serious need for funds and you are saddled with debt. The car breaks down or medical bills arrive and Katy bar the door. Debt now has you firmly in its grip. A serious matter is made worse because the other side of party time just came home to roost.

The root of the word mortgage is “death pledge”. Is that a graphic enough term for you? People knew from early times a mortgage wasn’t a home loan—the soft language we use today for a death pledge. It was something a lot more serious.




A World without Debt

It sounds melodramatic when you echo the warning over debt. Most people today either have debt or once upon a time did. Bankruptcy laws are generous these days. And why not? If the banks get in trouble the government bails them out by creating more money out of thin air, or as we say on the farm, by fiat.

My family has always been business owners. My dad has an agricultural repair business. While it pains me to admit my dear ol’ dad might be right, he did make an observation decades ago I never forgot. He noticed employees loaded with debt were a double edged sword. First, the debt kept’em coming to work. They had no other choice. In short, their debt made them a slave to my dad’s business. Self inflicted slavery, for sure. But slavery all the same. But second, the debt load made for high drama employees. It takes time and massive energy to juggle a debt burden. Paying the boat and car loan, mortgage or rent, Jet Ski payment, cottage payment and credit card bills are exhausting work. These people were under severe stress and it showed. They got sick more often and tended to have other bad habits (smoking, drinking and/or drugs) to relieve the stress. The stress drove them to the unhealthy lifestyle.

People walk free-willing, eyes open, into debt. Then reality strikes. You’ve been enslaved by your own doing!

Break free from debt today! The stress of debt is killing you. Get the plan and motivation to end debt in your life today. Regain your financial freedom. #financialfreedom #debtfree #studentloans #creditcarddebt #debt #stressThe economic imprint the borrowed money caused is long gone. Only the pain remains. And the pain lasts a lot longer than the pleasure did!

The government knows all this. They know your debt fueled spending is ointment that quickly wears off. The government also knows you are now left with two unpleasant options: sell a large part of your life and freedom to satisfy those debts, plus interest, or declare bankruptcy where they restrict you financially for a time. Bankruptcy doesn’t solve the problem; it only eases the pressure a bit so it’s possible to claw your way back. Part of your life is getting sold, slave. Get used to it.

And there’s your answer to how debt spurs economic growth. It forces you to work more than you have to. It wasn’t the debt fueled spending; it was your forced servitude to satisfy your obligation. In debt, they (government and employers) own you. You have to work. And you only keep a portion of the benefit! You are forced to work for a lower wage because you need money now! Debt comes first, eating second. That is why we have homeless and starving people in the richest nation in the history of mankind.

Interest sucks a portion of your hard-earned labor, too. Not only are you forced to work and accept a lower wage, you give up some of the remainder to the lender in interest. Remember interest? The stuff created out of thin air—fiat money—now requires you to repay a fantasy debt you agreed to with flesh and blood.




Coda

When I write these kinds of posts I get a lot of complaints I sound like Dave Ramsey. Well, for the record, I was a Dave Ramsey Endorsed Local Provider for many years. And I consider it a compliment when compared to Dave and his simple, yet powerful message. A lot to like in the guy.

I’ll make a deal with you. When the you guys stop telling me how smart and responsible with debt you are, I’ll stop taking the sledgehammer to your skull on this issue. Debt can be a powerful tool, no doubt. But debt is enslavement, as we illustrated above. Stop telling Dave and me we’re wrong.

Get your life back. Live your dream. The bank is the largest expense in most households. Big income and nothing left to live on. Insane! I beg you, kind readers. In these awesome economic times it isn’t the place to become complacent. Debt feels good now because it mentally feels like tax-free money. Paying it back means you have to make more money to repay the debt and pay tax on that money, too. You don’t need much to live a good life, but a boatload of income to pay all your debt obligations. More required income to cover debt and living means more taxes for the government.

And that is why the government tells us debt fuels economic growth. By the way, only a fool believes what the government tells him.

 

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Keith Taxguy

36 Comments

  1. Matt on August 9, 2018 at 7:58 am

    Good post and definitely take it as a compliment if compared to DR. He gets a lot of flack for his message and having tied to religion but his best episodes are when he yells that he’s company will never go out of business because won’t stop borrowing money.

    And it’s true.

    2007-08 is a distant memory and we love cycles.

    • Keith Taxguy on August 9, 2018 at 8:43 am

      You hit a nerve for me, Matt. We are a mere half generation from the last economic disaster and we haven’t learned a thing. All I can do is preach the good word. Even if I get a few it’s worth the effort.

  2. Chris Laska on August 9, 2018 at 8:02 am

    Keith,
    Great post , actually one of your best for the average household. Curious as to what your thoughts are on holding low interest debt (mortgage) and using excess income for LONG term investing over paying off the debt? If we are looking at 15 or 30 year terms what is your professional approach?

    • Keith Taxguy on August 9, 2018 at 8:50 am

      Chris, I’m personally dealing with that dilemma. I have plenty of cash to wipe out my only debt: the mortgage. I’ve dragged my feet because I’m locked in at 2.125%. My index dividends are almost that much! I bifurcated my approach to killing this debt. Instead of selling investments to retire the mortgage I’m plowing all excess cash into retiring the debt. I don’t want to cause a taxable event so my method works for me; you may choose a different course. Two years ago my mortgage was $200,000; $100,000 at the beginning of this year; and dropped below $60,000 recently. I calculate the last debt I’ll ever have will evaporate into history somewhere around the end of this year to March of next. The idea of leverage to leverage gains is a stupid idea I admit I fell for. I’m a cash and carry guy not. Even 0% debt doesn’t thrill me.

      • Jamie V on August 9, 2018 at 9:18 am

        That is excellent progress! That makes me re-think my 0% debt from my below mini novel. Thank you to Chris for asking this question!! I’m always rethinking and reconsidering what I want to do and what makes me most comfortable.

  3. Kenneth on August 9, 2018 at 8:16 am

    I remember the 2008 financial crisis well. We still had debt at the time. The couple across the street both had country club memberships, and we were jealous because we were golfers too, but played at the municipal course. One of them lost their job, and the house of cards came teetering down. Within a year, they lost their house and their country club memberships. We were lucky to escape, I managed to hold my job, although my employer demands kept steadily rising. They know when they own you. This is when I got the inkling that debt is very bad, and started to work on it. Brown bagged my lunch to work every day, cut our dining out monthly budget to exactly $100 (4 breakfasts per month). Cut out cable TV etc. The snowball began in earnest. I retired 7 years later in 2015, same employer. But the home equity credit line was paid, the mortgage was paid, all other debt was paid. We are not rich, but our paid off home value is $375,000 and our IRA value is about the same. With social security, a $649/mo pension, and a $1,350/mo IRA withdrawal rate, we FEEL rich, because we have no debt. Plenty of money for 2 weeks in Italy, 2 weeks in France, a week in Germany, all the golf we want (still no country club membership). Life is good without debt.

    • Keith Taxguy on August 9, 2018 at 8:53 am

      Kenneth, memories of the 2008-09 event are long forgotten. That’s too bad. Right now is the easiest time to get your financial house in order. Life is great! The economy smokin’ hot! The day will come when things aren’t so nice. Well, actually, if you have no debt you’ll require neighbors or the news to clue you in to how bad it is. If you’re leveraged you will know things turned south before anyone else. Good observation, sir.

  4. Brian McMan on August 9, 2018 at 8:36 am

    Thanks for the debt slavery article.

    Say can you recommend a beginner credit card to apply for when I have like $300 monthly spending? I’m too scared to sort through the billion results that come up due to my ignorance of credit cards…and due to Dave just flat out not wanting anyone to own them. Thanks!

    • Keith Taxguy on August 9, 2018 at 8:58 am

      Brian, as long as you pay in full each month I have no problem with a credit card. Yes, Dave says NOOOO! But remember Dave’s audience. They proved they can’t handle a credit card; they use it as a loan rather than as a tool. You can check the TWA Recommends page as a starter, or you can talk with a local credit union. I get paid an affiliate fee for credit cards recommended here and I’m still going to tell you the local credit union is probably the right place to get a small limit, no-fee credit card. I also recommend you transfer any credit card spending from your checking to a dedicated savings account where the card will be paid from. No kiting your own money.

      • Brian McMan on August 9, 2018 at 10:02 am

        Thank you very much! The credit union thing is particularly what I needed to hear, I thought that’d I’d hurt my decade long relationship with them if I started trade lining their card in a year. I’ll go check it out.

        • Keith Taxguy on August 9, 2018 at 10:12 am

          Brian, I didn’t know you wanted to sell tradelines in a year. Selling tradelines works with the large credit card companies only, so I must self-promote and recommend a card from the TWA Recommends page.

  5. Andrew Connors on August 9, 2018 at 8:37 am

    I listen to Dave’s podcasts and agree that debt makes you a slave. It’s not just Dave though, Mr. Money Mustache compares any debt to an emergency as urgent as having your hair on fire, something you need to address NOW. It’s not just debt though, it’s spending and luxury level. I work with many people who make high incomes but due to large houses, second homes on the lake, new cars, vacations and high monthly bills don’t have the freedom they imagine they have. And all their stuff does not increase their happiness.

    • Keith Taxguy on August 9, 2018 at 9:01 am

      Wasting assets have difficulty increasing happiness, Andrew.

      I also agree with Mr. Money Mustache. In case readers don’t know, Mr. Money Mustache is a client of my accounting practice.

  6. Chris on August 9, 2018 at 9:05 am

    Great Eye Opening Article! What is your take on Dave’s baby steps? I just looked them up and It looks like I am on step 6.

    • Keith Taxguy on August 9, 2018 at 9:39 am

      Chris, I like the way Dave turns finance into a simple step-by-step process. It takes time to slay the debt beast. Once you reach financial independence the steps fade. Example: Baby Step #1 is a $1,000 emergency fund. I haven’t had one of those ever. But I can come up with a heck of a lot more than a thousand bucks in a heartbeat if I want/need to. When your finances are in order, a surprise bill for under $1,000 is only a mild irritant.

      If your working the steps, I encourage you to stay the course. It’s the best program out there, invoking common sense and responsibility.

      • Chris on August 9, 2018 at 2:03 pm

        My wife and I are in our mid 30’s and only mildly irritated by a $1k expense at this point. We are more concerned with paying off the house. I have also been wrestling with putting money into the 401k vs mortgage as we only have a 3.6% rate. After some late night conversations, we decided to pay down the house early. As with most people, the largest percentage of our take home goes towards the mortgage. If this is gone, we need a whole lot less to live our current life style in semi retirement. I also have two children under the age of 3 and know that a smaller income can get you more financial aid for college. I put enough in to get my full 8% match and then another 7% for good measure, but still find it difficult to decide how much to put towards the mortgage vs 401k. I suppose it’s a good problem to have!

        • Kenneth on August 9, 2018 at 6:04 pm

          Chris, if you are putting 15% into your 401k, I would recommend putting excess against the mortgage. I did this too, about half and half 401k contribution and slaying the mortgage. So now, I’m mortgage free. Along the way, you’ll discover that you have enough equity that it makes sense to get a home equity credit line. Not to take vacations on or spend wastefully in any way, but as “springy debt”. Springy debt becomes your emergency fund when your car breaks down, your air conditioner goes out and you have a large medical bill all in the same month.

          • Chris on August 9, 2018 at 9:05 pm

            Thank you for the input. It’s nice to know that some else has been down this road before and got that death pledge knocked out!



  7. Jamie V on August 9, 2018 at 9:15 am

    Excellent article. We are crawling out of debt enslavement – probably at the 6 figure mark, if all added up over the past 10 years. I remember the time before debt, and life was great: no money worries. I remember paying for my first car when I was 17 ($3.5K) in cash, as well as my 2nd car ($7.3K) when I was 19 (I know. Lessons learned after the fact.). What happened to that mindset of paying in cash or don’t buy it?! School loans were encouraged 100% by everyone and the government as I later went off to college, and that began the snowball bad. At that point, I had never had debt (I paid for everything in cash!) and I didn’t actually realize that I’d have to pay it back with no help, with nothing, and plus the interest got deferred (didn’t know that was a thing, either!). In school, I signed up for credit cards for free pizzas (UGH what predators they were) as a poor college student – hello more debt. Fortunately I worked through college to have some money to make payments where possible. I graduated in December 2008 (best time to graduate, right?!) and lo and behold, there were no jobs (for a history major in the history field), and I didn’t have a full time job until August ’09 which paid slightly higher than minimum wage in the veterinary field. Debt just snowballed out of control as I tried to live an independent life (newsflash: this wasn’t working as I was still losing money each month).

    At some point, in 2013 with all the FI/RE blogs I was reading (I think I had a rotation of about 20 I was obsessively checking each day), something FINALLY sunk in and I also remember, in tears, paying my entire 2014 tax return (ALL of the $2,694) to one of the student loans. I remember my chest literally hurting at all the stupid things I ignorantly had gotten myself in to and how absolutely painful it was trying to climb out. I remember that desperation, the heartache, and honestly, the panic, too. Up til that point I had been putting any extra cash towards Loan #1 and still wasn’t making huge progress. When I made that first huge tax-return payment, the light bulb went on like the sun over my head and I truly, truly realized how horrible this debt thing was because it hurt *so* bad to see that money just gone in an instant poof! After I paid that chunk of cash off, I began making a loan payment of over $1,000/month solely to this loan (I was in a better job making twice the minimum wage) and I paid it off in September of that same year. I remember thinking “this is great news, but I still have two other behemoths breathing down my neck and that is detracting from my joy”. I paid off gigantic loan #2 in April 2016 (1.5 years later) and #3 finally in October 2017. Phew. I probably paid back over $50K total, and I’m also probably being conservative with that total amount.

    Now we are trying to tackle the car loans (which upsets me that this is the first time I’ve ever had a car loan – I used to be so good!). Mine will be gone in September, thank god. After that leaves a mortgage and some medical debt that is at 0% so I’m just doing the minimum and will be shoving what I can in to investments to “catch up”. I certainly didn’t mean to write you a mini novel, but clearly debt has had an impact on my life and I can see the value of not being crushed under its weight = freedom. Again, excellent article!

    • Keith Taxguy on August 9, 2018 at 9:32 am

      Jamie, another thought on why I decided to retire (ahem) the mortgage with a super low rate: $100,000 at 2.125% is still $2,125 in interest per year. That is a guaranteed expense(!) while investments can experience short-term declines. I want a simpler life and tossing over two grand a year out the window no longer adds up to this country accountant.

      • Jamie V on August 9, 2018 at 9:46 am

        Makes sense, Keith! We keep going back and forth about how we should handle the mortgage (we’re at 3.625%) once we’ve got all the other debts paid off. There are very strong opinions in each camp and we waver from side to side (your statement above is a perfect reason) every so often. I think when we decide, I’m just not going to tell anyone what we’re doing and not have to deal with the blowback from anyone on either side of the argument. 😀

      • Kenneth on August 10, 2018 at 5:51 am

        Keith, you and I are at zero debt then. A lot of people struggle with this goal – I can make 10 percent a year in the stock market! Why should I pay off my 2 percent loan? Because, inevitably, the market will turn south for 2 to 3 years. When it turns south, jobs get a lot iffier. That big paying job you have, like my neighbor across the street with the country club membership, can be eliminated. No one else is hiring. It’s right at this point you thank your lucky stars to have as little debt as possible, or better yet, no debt! It’s a guaranteed 2.125%, Keith – and one less payment, and one less monthly accounting entry.

        I only wish the Federal government would get the no debt religion. They could start by cutting the military budget to $200B from $750B. Eisenhower warned us about the military-industrial complex, and he was right. They even have insidious advertising everywhere at all times. “Support your troops”. How noble. I was a troop at one time, and you could support me better by not spending our money, and our children’s money, by being policeman of the world. An unpopular view today, only because everybody is so brainwashed.

  8. Financially Free on August 9, 2018 at 10:19 am

    Great article Keith. I never had any debt in my life until recently. I have been avoiding it like the plague.

    ½ a year ago I bought my first rental property. I have been reading “rich dad, poor dad” and learned about leverage through “good debt”. The rental property does seem to be a good investment and it brings in a healthy revenue while the tenants pay off the mortgage. However, after reading this article I really start questioning if I should continue this path and buy another rental property with borrowed money. What is your take on this?

    • Keith Taxguy on August 9, 2018 at 10:58 am

      Kiyosaki makes his money selling books, programs and consulting. You take the risk using his advice. Many people are enamored with Rich Dad, Poor Dad; I’m not one of them. I’ve been silent on this book out of respect. However, after reading the book I’m not impressed. BTW, when was the last time you saw a very wealthy person recommend Rich Dad, Poor Dad? Exactly.

      To your question: I’m okay with some debt to purchase property. The property has to be purchased at a reasonable price in a good location. If you borrow, say half, the purchase price, dig in your heels and pay down the mortgage as fast as possible without causing cash flow issues to handle maintenance and potential vacancies. I don’t consider this “good debt”. I consider debt a tool; a dangerous tool which should be used sparingly. Kiyosaki can say what he wants; I’ve never had a client lose his house to the bank without a mortgage.(Re-read that until it sinks in.) Kiyosaki can’t claim all his readers never lost a house using his advice. By default there will be some who stumble and fall. Leverage magnifies the good and the bad. The bad side can clean you, forcing to start all over again. For me, I pass on debt and live without leverage.

      Note: At least I didn’t catch hell on reddit yet. Last time I argued against debt I was drawn and quartered on reddit.

      • Financially Free on August 9, 2018 at 11:38 am

        Thank you for your advice Keith, I truly appreciate it.

  9. John on August 9, 2018 at 6:34 pm

    Great article. Should be mandatory reading.

  10. Mohammed on August 9, 2018 at 10:44 pm

    Good article,

    Whilst I don’t like debt it’s an unavoidable evil of property ownership.

    Would love your insight on real estat and debt financing beyond what you have here.

  11. ArmyDoc on August 10, 2018 at 10:22 am

    Great article. You imply but don’t actually say it, but money and debt are the same in a sense – they represent a claim on future goods and services, or a claim on future money which is a claim on future goods and services!
    It is much better to have the claim (money) than to owe the claim.

    • Keith Taxguy on August 10, 2018 at 10:59 am

      Money was developed as a store of wealth originally. Fiat money isn’t stored wealth; it’s debt. It says so right on U.S currency. You hit the nail on the head, Doc.

  12. planedoc on August 10, 2018 at 11:40 am

    I retired my mortgage (at 3.5%) earlier this year. The question I asked myself…”would I be happy if the market dropped 30% and I still had the mortgage?”

    The answer was clearly…I’d prefer to have the mortgage gone. No doubt I cost myself significant money over the past 2 years by paying the mortgage off early (from home purchase to complete payoff was less than 2 years)…but the key element that (in my opinion) that is often overlooked…..*you don’t know the future*.

    It’s easy to look at 2017, and say, “dangit, if I hadn’t put $200K into the mortgage I could have made 20% on it” but that’s in essence just “market timing”. It’s proven that market timing doesn’t work. If you owe on a mortgage…..that’s a type of “negative investment” that you owe, no matter what the economy does.

    I will strongly say that I am much happier, and feel freer, by having paid it off.

    • Keith Taxguy on August 10, 2018 at 12:07 pm

      You guys were much smarter than me, planedoc. I went out and took an extra mortgage when rates were so low and dropped it into the market. It worked out fine, but now I sit here paying off a mortgage with an eight figure net worth. In hindsight it really seems stupid even though I made money on the deal. Now I scrap funds from anywhere I find them to retire the debt. If I sell investments I face a taxable event. After a certain point it is no longer about wealth; it’s about stress-free living.

  13. F.I.R.E. Fighting on August 10, 2018 at 1:18 pm

    Keith, appreciate your work here. I am now dept free and Dave Ramsey is who helped get me started and kept me motivated through the tough times to stay the course.
    We go through different stages in our lives and I am grateful for Dave’s simple yet powerful plan. I just wanted to testify that what you have said is correct. I will confidently even say “ life changing”. Thank you Keith for all of your articles. I am grateful!

  14. […] Happy people do not need more stuff; wealthy people are wealthy because they realize they already have enough; and early retirees achieved their goals by saving first and spending only a fraction of their income. I encourage my clients to save 50% of their gross income. They usually give me a look. I am more the Crazy Accountant to them than the Wealthy Accountant. It is a truism that frugality will get you through almost any challenge you face in life. Desire for stuff leads to debt and debt is a terrible taskmaster to have. […]

  15. […] I’ve preached this line often before. Loan payments are not completely new spending. The interest is, but it doesn’t feel like fun spending. You get nothing for the interest spending: no pretty baubles or service or vacation. Nothing. Your wealth just disappears. […]

  16. […] How Debt Spurs Economic Growth from The Wealthy Accountant […]

  17. […] For someone working his entire life in finance this shouldn’t be a problem, you’d think. But it isn’t that simple. […]

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