Debt Is Slavery

Note, this originally appeared at my blog in a slightly different form on Aug.6, 2011.

It was reprinted with the above title and a few editorial changes at Inmalafide on Aug. 19, 2011.

Let’s talk about freedom. One thing that Men Going Their Own Way discuss is lack of obligations – to a wife, to children, to society etc. Another thing I’ve mentioned with the Selective Service is a desire not to be obligated to fight a war I disagree with should the draft return.

Well, one fucker that’s gonna hold you back is debt, and one kind of a obligation is a car payment.

Me, personally, never owned a car with a Kelly Blue Book Value above $6,000. I’ve flipped one (that’s over – not flipped like a house), blown up an engine, one totaled when an idiot made a left turn into me – hell, my neck still hurts from that.

Whatever, I love driving but a vehicle isn’t an asset unless it’s a vintage muscle car. It’s a liability…

Same with a computer, it goes down in value. Maybe a rare video game system will go up but, yup, that iPad – depreciation. It’s already worth 10% less when you open the box. Remember, there is a restocking fee if you bring it back – if they even take it back…

Here’s an opinion – if your vehicle is tied to your self esteem – well, maybe you’re the type of guy who pays PUA gurus for bootcamps, maybe you’re the type of guy who who tries to make women like you by buying them drinks…

Fuck that shit.

There was once a time when a house was an asset – well, I hate to burst your bubble but that’s what happened in real estate…

“When the archetype dream of a picket white fence home came with a $4,000 a month mortgage payment, the sudden reality hit and many realized that the dream wasn’t worth the actual price tag. That is why the zero down craze was so utterly incompetent. Buyers had no skin in the game. In places like California, buyers were effectively given a put option. The mortgage itself is non-recourse, meaning if there is a foreclosure the home goes back to the lender or bank and the buyer walks away with a foreclosure on their record. Many are electing to go down this route. Some by choice and many because they cannot afford the recasting payment or have seen a decrease in their income. Amazingly, the person that rents with a zero net worth now has a stronger financial position than the person that bought at peak levels and actually has a negative net worth of $100,000 or even $200,000.”

Credit cards can have benefits, but many more pitfalls. If you don’t pay off the balance each month, you can easily find yourself paying 13% or more in finance charges. Sure, you need one to rent a car and it is fun to make a shady store pay a 2.5% processing fee when you purchase something. Still, for the flexibility it gives you, it’s a quick way to get in debt. If you like reading stats, go here.

Savings rates are really low right now. I guess the Fed is trying to get more people to borrow in order to stimulate the economy. Doesn’t look like they are really watching out for us though.

I don’t really know what to tell you. My personal response is to work as little as possible to sustain my lifestyle. I wouldn’t feel guilty if I ever had to declare bankruptcy or default on a loan. A FICO score doesn’t define who I am but it can make it tough to get a place to live…

2 thoughts on “Debt Is Slavery

  1. The best article you’ve written to date.

    I personally believe that the American dream is bullshit,and has died(if it ever existed).

    Yes we all love democracy and capitalism,but it’s the fastes way to get into slavery debt.This system is fucking rigged.

    1. Now is the best time to buy a house using a traditional 30-year fixed mortgage. Rates are the lowest they’ve ever been (I’m being quoted 3.75%) and prices are low because of the excess inventory from foreclosures. The only caveat is that I might not buy if you live in a city with a declining population (like Detroit or Philly) or if you are downgrading. If you live in a growing city, like Atlanta or Houston, or if you are upgrading, a house is an easy call to buy right now. I just sold my house at a 20% loss to upgrade to a bigger house in a better neighborhood, because the discount on the house Ill be buying is much bigger than the loss I took.

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