What is debt?

[Envend]

Here is an article I wrote on my website. Please let me know what you think of it


Most people would agree that debt is not fun to have. The feeling that own everything you own to someone else is horrible. To make it even worse, the source you must pay your debt to is some bank that doesn't even care about you. All they want is to steal your money and accumulate as much interest as possible.

The great thing about all of this is the fact that 99% of people do not need to be in debt in the first place. Overspending is a horrible habit for most people. It is why our country is 14 trillion in debt and rising. That's over $50,000 each individual owes. I don't know about you, but I don't have $50,000 sitting in my wallet to hand to the government. Debt is one of those things people choose to ignore. It does work for some time, but eventually the bank will take everything you own until you break even. Many people around me are experiencing foreclosures. When I speak to them, they are on the verge of depression knowing their most prized possession and largest investment is being taken away.

What is debt? It is when you have nothing and someone else owns you. It's the truth, but most people around the world fail to realize this. People need to understand that debt means you need to turn your life around or else you will have nothing in a few years. In a sense debt is a good thing because you have a leeway period to fix your errors. The leeway period comes at a cost.

The problem with debt is the interest. Some people don't mind owing money, but the part that kills them is when the bill arrives telling them they owe almost a quarter more than what they originally owed. Credit card interest rates nowadays reach as high as 15-18%. That is insane.

For those of your in debt, I strongly recommend that you cut every luxery expense you can find: phone bills, cable, large housing, and even going out to dinner. All of those costs add up to a large bill at the end of the month. Once your are out of debt it is fine to spend again just at a lesser volume until you accumulate savings. As a final remark, please remember that debt means you own nothing and savings means you own something.

[KennySoward]

I think you captured the emotion people feel when in debt. "What is debt? It is when you have nothing and someone else owns you." That is a very strong way of putting it, but I totally agree.

Other than some small mechanical problems with the article, I think this is good. Keep working at it and keep practicing.

[canada94]

Originally Posted by KennySoward

I think you captured the emotion people feel when in debt. "What is debt? It is when you have nothing and someone else owns you." That is a very strong way of putting it, but I totally agree.

Other than some small mechanical problems with the article, I think this is good. Keep working at it and keep practicing.

I agree with Kenny, although there are two types of debt, good debt,things that appreciate and make you assets, and bad debt that depreciates and cost you money

[DebbieL]

"Good debt" doesn't always appreciate when you are referring to assets. I assume you are referring to houses, etc? Losses happen too, not just gains. IMO good debt would be student loans, but ONLY if they are getting you into a much better financial position after graduation (someone getting into large debt for a liberal arts degree = bad debt IMO).

[Frugal]

I don't think debt is ever good, even what people say is "good debt", such as student loan debt and mortgage debt. Debt is still a form of bondage, and the "Debtor (remains) a slave to the lender". I and my family are in the process of getting out of all forms of debt, but it is a slow and tedious, patience-testing process. My advice? Don't ever take on debt if you don't need to! Sounds simplistic, but it is true.

[azara]

Hi
A debt is when you owe somebody money. Debts get bigger every week if you are also charged ‘interest’. Interest is an extra charge on the original debt.
Thanks...

[rj.phila]

just want to point out that in financial institutions terminology, a loan is an asset, and a deposit a liability. because the loan generates interest, it is considered income generating. and of course a deposit requires interest to be paid, it is a liability. obviously there is a semantic argument to be made there, depending on what the endgame of each looks like....

[walker.kenny]

Nicely written article, though debt can never make you feel good IMO