Talking About Debt

It’s a little know thing, or a widely known thing, depending on how many things one knows, that the word mortgage means death pledge in French. The word entered the English language probably with the Norman conquest. The idea, though, is ancient.

Take-Away: Death Pledge sounds like a bad thing. And it is. To be avoided.

Why Debt Bad?

Because it enslaves you.

Because, like a slave, you must work to buy your freedom. You cannot simply have your freedom when you want it. The mortgage coerces you to work (a lot) until you are granted the freedom to do what you want.

You trade your future labor for the present thing you are buying.

Sure, it is a stretch of the word, but in essence, debt forces you to work sometimes many jobs to pay your debt back. In the case of mortgages, the problem is compounded by the addition of interest. Interest which changes year over year.

There is a reason why some religions saw interest as inherently evil. It was not directly because it caused harm to the borrower. Rather, it was because money is by definition sterile. Non productive. Money, itself, cannot create more money. (It is your work that does).

The Italian poet Dante firmly put lenders and bankers in a lower level of hell than even murderers.

Taxes and Inflation

These two words are actually the same thing. Inflation is essentially a tax on your earnings. Both are actually debt. You owe the government money every year. For ever.

These things are impossible to avoid, unless you make some serious moves. Some taxes, when used sparingly, may be fine, but even this is debatable. Our governments are running wild with our money, like drunken sailors, so it would be wise to find a way to minimize these.

A trick in high-tax countries, is the very simple one of living in a small, debt-free home. And earning not too much money. This is the cheat code in progressively-taxed countries.

The thing with this, though, is that you end up living in a limited way. Not to your full potential. Over the long run this will also kill innovation in an economy.

Why work more, if you keep less in your pocket?

Inflation is the really hard one to beat…unless you outright own appreciating assets, which few of us do. And even then, once you sell these, the tax man will be sticking out his greedy hand.

How to Stay Free?

This is a tricky one. Anyone with eyes can see that homes and cars are the biggest problems here. I was a realtor in Canada and am well aware of the issues facing new buyers.

My top ideas:

1. Move to a cheaper place - take the family or go if single, and start anew. This could mean a new area in your country, or even a new country.

2. Rent and buy a piece of land. The land can one day become a place where you build your home.

3. Do not borrow money to buy a car. When you have enough for a decent used one, but it cash. Do not own two.

4. Learn to cook.

My family opted for option number 1.

We live in tricky times, and many weird things are happening at the same time. It is hard to find clarity. The best course of action in such times is to make clear, deliberate decisions, that leave you in MORE control of your life. Not less.

I know many people that have made huge decisions like this. Moved their families, re-invented their lives, and are thriving.

What’s My Dream?

Part of making decisions is to actually have the courage to dream a little. It is hard to allow yourself to do this, especially when you are stuck in the grind of daily work and expenses. But dare to dream.

The Boutique Hotel…

Admittedly, it is not a creative dream, but it will do. And it does not need to be a hotel.

Imagine this: A four apartment house in a beautiful part of Europe. The family runs this and lives off the income.

This really ain’t so far-fetched. There are places in the world where you can have this life for less than the price of an apartment.

There are places in the world where you can live in a villa on a sandy beach for less than $1000 per month.

I think it is time for more people to open up their imagination a little. And do some math.

Imagine → Idea → Math → Control.