Neither a borrower nor a lender be, except if you must, then be a lender…

December 9, 2010

I have no credit and it’s really quite comforting.

I have no wife — she having passed away in July — and that is not comforting.

But I had (and still have) cancer and lost a good paying (a really good paying) job and our credit disappeared with it. Fortunately I have another (not as well paying) job (and glad to have it, thank you).

I was never a fan of credit, but I was a wimp when it came to economics and budgeting.

And like so many, first me (when I was the sole provider) and then we just could not make enough money we thought to pay for even what most people consider necessities. Aside from attempts at home ownership (three that lasted for relatively short durations), we never bought big-ticket items — okay a car, but how do you get along without one of those and who would want to? But credit cards were the answer (we thought). We were showered with them. Even after we lost our credit we kept receiving those pre-approved ones in the mail, but by that time, much too late, we no longer took the bait.

I always had the protection of wimping out and/or blaming the other half.

I no longer have that protection and it has made me stronger. If I don’t have the money, I don’t spend it. And I don’t go further into debt.

Lately I’ve been hearing bits and pieces of Dave Ramsey on the radio, but only bits and pieces, so I don’t understand it all, but what I’m getting is that he is mixing some fundamentalist religion (which I don’t care for because of its inherent bigotry) with a doctrine of cash only and paying off that debt (which I do care for). I need to read up on him.

I’ve always thought that one reason things cost so much is that people heretofore (prior to the Great Recession) have not really had to consider cost so much — just put it on the credit card. Same with doctor bills. The insurance pays.

If people had to pay the cost of things with real money, they would be more selective. And guess what? prices would come down. In some cases they have — although not nearly enough.

Credit probably is necessary for some things. Perhaps it is the only way to buy a home (but you may not really need to make that investment and maybe 30 years is too long for a mortgage). Businesses find it necessary to use credit.

But the real secret in credit is to be the lender, not the borrower. Better to invest money in interest-bearing things, where essentially you are making a loan to someone or some entity, and collect the reward in interest, the cost of borrowing money, yourself.

And then there is the trap I fell into: “I just can’t make enough money”.

Providing we do have a steady income, almost all of us can make more money by simply spending more wisely and keeping some of our money, to the extent we have any extra, in interest-bearing instruments.

Not being officially religious, I may not have a right to use this terminology but I truly believe that consumer credit is the work of the Devil. Corporate America has made most of us slaves with their consumer credit offerings. But in the process they have bankrupted millions and may have in effect killed the goose that laid the golden egg — talk about poetic justice (but don’t rejoice debtors just yet, there are the blood suckers, or maybe savvy investors, buying up a lot of that consumer debt).

And this I say to the credit card companies and all those who offer, or should I say push? consumer credit:

“I’ll see you in Hell.”

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My position on consumer credit, the short version…

March 16, 2009

I’ve addressed consumer credit in two recent blogs. But for those who don’t like to get lost in a sea of words, here is my position:

Credit cards and all consumer debt is the Devil.

Watch what the poor people do and don’t do it.

Demand cash. Pay cash or don’t buy at all.