My Thoughts on Debt (and General Financial Management)

I don't know why I feel I have to write on this. Maybe, it's because we are a couple of weeks removed from the holiday season, and I had a deep conversation about credit card debt with one of my customers a few weeks back. It is something that I've always seemed sort of had some kind of a passion for. Ever since I was young, my parents have always told me I had a natural knack for not getting trouble with money, and whatever money I had (whether a small or a reasonable amount), I've always seem to do decent with it.

Whenever I see something I like, after some thought, more often than not, I would buy it. The key phrase there... "after some thought". About 90-95% of the time, everything I buy, is not an impulse decision. However, even if that's the case, that doesn't mean I won't get buyer's remorse in some of the things I buy. There will still be a lot of times when I thought about what I wanted to buy, I bought that said thing and I had a thought in my mind... "hmmm... is this all? was this really worth the money I paid for it?". Then I spend time justifying in my head that I made the right decision in spending the money, and get as much utility as I can out of the thing that I bought. And, because of that, it's good.

But, on the flip side, there are also often times, that I see something I like, and I don't end up getting it. Maybe it's because of the circumstances, or it's something else, and for some reason, I prevent myself from buying it. For example, I am a member of Costco, and I actually do most of my "necessity shopping" there. Just because Costco is a price club warehouse with a lot of desirable items (with discounted price), there are times when you would be more than tempted to buy a surplus of something (some of which you may not even need), and you have to try to convince yourself not to buy it. Call it a "buyer's conscience" if you will. I think some people who have this "buyer's conscience" and is in tuned with it, usually are okay when it comes to money matters.

As far as how I feel about debt. I said this publicly before, I think it's one of the worst things in the world, and could possibly be the bane of human existence. Frankly, debt sucks. The thought of owing someone, or some corporation money is probably one of the worst feelings I have as a human. In fact, sometimes, being a in debt almost feels almost like you are part of slavery, since you owe practically part of your existence to your debtor(s). As someone who's ran a few businesses, and taken a few risks in my time, I admittedly financed a few things off of debt. In fact, I probably had thousands of dollars in credit card debt whenever I financed my OBECorp projects. And believe me, it didn't feel good owing credit card companies money for a lot of months (luckily the credit card I had, had no interest for the first 12 months). Still, it was a wonder how I survived so long.

The only thing credit cards are really good for, is for building credit history. Which is why that despite that I hate debt, I still have 3 different credit cards. But, usually, when I put something on the card, I would pay off the balance by the statement, so therefore, I don't get into (much) debt, and the credit cards won't make too much money from me.

But that's actually my general thought on debt... it doesn't make sense to buy something, and pay more for it down the road than what it's actually worth, knowing that by the time you finish paying for it, it likely won't be worth half of what it was when you paid for it. When I bought the iPhone 5 when it came out in September 2012, I really wanted it. It was expensive as heck. But, I had to make sure I was able to afford it and able to pay for it in full. That's the mindset I have when it comes to a lot of things. Unless, I know I would be able to pay for something in a short amount of time, I wouldn't get it.

I suppose the only thing that this debt philosophy doesn't apply to, is investing in property. Unlike most material things, property can actually go up in value. So, as long as you do your due diligence, it's actually recommended that you borrow money to invest in property, so long as you think it's worth it. It is rare anyway, that one person or household will have 6 or 7 figures in a bank and pay for a house in full anyway, so you definitely need help from the banks.

Anyway, I just thought I'd briefly talk about this. I was tempted to get a little bit political and tie my commentary to what the United States is going through with their national debt, but steered clear. People would know how much I detest politics. However, I do have strong feelings about that as well, so I may talk about it in a future blog post, if I feel like it (or if there's demand for it).

Moral of the story: I know this is cliche, but regarding money, it's not what you make, it's what you keep. Do your due diligence when you buy something, and think hard to make sure it's worth it for you. And, in most cases, debt is the debbil, as it sucks owing people money.

#OBE