The-Ave.US

It sure is. In the last couple of decades, the financial industry has prospered mightily thanks to the proliferation of debt and the rivers of interest paid by debtors.

NBC News ran a story today about consumer debt that should be required reading for most American adults. Sample excerpt: “Those high-interest credit cards will eat you alive,” he said. “If you pay the minimum payment on a credit card at a 23 percent interest rate, you could literally be paying for the same pair of shoes for the next 20 years.”

http://www.nbcnews.com/business/personal-finance/long-grueling-road-getting-out-debt-n52961

The ugly reality is that most Americans do a shitty job of managing their finances. They don’t look after their credit scores and often pay things late. Some have never even thought about their credit rating and have to look for credit cards for no credit history if they want a credit card. I’m qualified to say this because Mrs. Rabbit and I have no debt. Zero, zip, nada, none. This isn’t bragging, it’s just an instructive fact. We don’t pay a cent to mortgage companies, banks, finance companies, or payday lenders. Our budget for debt service is zero. We invest that money instead of giving it to lenders. We’re not rich, our net worth is less than a million, but getting rich isn’t the point of having a debt-free lifestyle. The point is, we’re not financially stressed. We don’t rob Peter to pay Paul, lie about the check being in the mail, or destroy our relationships by hitting up family and friends for “loans.” Our needs are being met, we sleep at night, and we don’t fight over money. Another thing about finances, the future shouldn’t be left out for the welfare of your loved ones. You should get more information about life insurance policies after you clear the debts (if you have any).

As a lawyer, I’ve spent a lifetime observing other people come to grief over money problems. Other people paid in blood for my financial education. (Education is always expensive; and it’s always better to let someone else pay for it.) Here are my simple rules, learned after a lifetime of mistakes and false starts:

1. Get out of debt and then stay out of debt.

2. Spending never made anyone rich. Only saving and investing can make you rich.

3. You prosper by owning, not by owing.

4. What matters is not how much you earn, but how you manage what you have. Stated another way, your financial fate is determined by what your spending habits are, not by what your income is.

5. Your ego is your worst enemy. Years ago, I memorized this ditty: “The average American works at a job he hates to make money he doesn’t need to buy things he doesn’t want to impress people he doesn’t like.” How much sense does this make? Is this you?

6. Needs and wants are two different things. Learn to tell them apart.

Well, shit, enough preaching. Just read the article. Or not, as you choose. Then do whatever you want. How you live your life is your business. When you need a referral to a bankruptcy lawyer, call me. I know a couple good ones.