Céad Míle Fáilte ~ A Hundred Thousand Welcomes!

Here we seek a rest in the shade, some cool water and a little kindness. This blog is dedicated to peace, truth, justice and a post- industrial, post-petroleum illumined world in spite of all odds against it. I very much like the line about the ancient knight (see poem below) "His helmet now shall make a hive for bees" It is reminiscent of "beating swords into ploughshares" a sentiment I heartily approve of. Thank you for visiting ~ I hope you return!

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Friday, July 24, 2009

No debt = freedom

I was working with and talking to the co-owner of the shop I work in yesterday when he happened to mention that he had just found out that he had come in to a small five figure inheritance from his grandmother. I just listened as he wondered what he could do with the unexpected windfall. Should he buy this or that or the other thing?
This went on for a while and I did not say very much, then he asked me what I would do with it. I think what I said surprised him.
What I told him was I thought he should either stash it away as an emergency fund or use it to pay down debt. Then when he wondered why I told him my thoughts on personal finance.
I told him that I am completely debt free and have been for almost a decade. That I do not buy anything unless I can pay for it up front. That when I do buy something I buy the best I can find and pay the extra cost because the item usually works better and lasts longer.
I told him that being debt free is a state of mind and a lifestyle choice that takes discipline and practice but in the end is much less expensive and much less stressful that the debt driven life we have been taught is normal.
Being debt free brings freedom and many more choices. I told him that if I was in debt I would not have been able to retire at 49 and take up a much lower paying job that I enjoy very much. When you are in debt you are on a treadmill and cannot stop moving. The bigger the debt the faster the treadmill goes. If you lose your job or get sick you are in danger of very quickly losing everything that you worked for.
It was one thing to take on debt as a normal lifestyle choice when jobs were plentiful but it is quite another to do it in an economy where jobs are still going overseas and the unemployment rate is north of 15% like it is here in Michigan. He listened to what I had to say but I am not holding my breath that I convinced him. All our lives we have been told to buy things right now on credit, with easy monthly payment plans. Why wait? Enjoy it all now! Keep up with the Joneses!
An alternate lifestyle of pay as you go and healthy reserve cash has its own rewards and is well worth pursuing. Start where you are, but at least start and I guarantee you will not regret it.

1 comment:

Stanford Espedal said...

I agree. When my dad died in 1990 I also inherited a six figure sum. I used the major portion of it to buy a house. We've never had a mortgage, drive used cars that we can pay for up front, pay our credit card bills monthly, etc. This lifestyle is one of far greater freedom. And in periods of unemployment or under-employment it has not been the end of our world.