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Do not go into debt. If there’s one thing I can do for any young person out there wondering if they should go into debt or take on a loan, it’s to tell you do not go into debt.
I virtually do not see this advice offered anywhere. Everyone makes excuses for what they call “good” debt. They might say, “Don’t go into debt except…” or, “Don’t go into debt unless…” or other excuses for what is “good” debt.
You might be expecting a horror story of how I went deep into debt and it ruined my life and after years of saving and hard work, I managed to crawl out of that dark hole and experience freedom.
That’s not my story. You can find plenty of stories like that, but that’s not my story. I made a choice at a young age never to go into debt. I’ve never borrowed money. I live by a very simple principle:
Buy what you can afford.
Don’t live outside your means.
If I don’t have money for something, I don’t buy it. It’s as simple as that.
But simple doesn’t always mean easy. It certainly doesn’t always mean comfortable. In fact, if you decide to live by this principle, it will mean discomfort. It will mean doing things the hard way at first.
For my wife and me that meant sitting on the floor. Early on in our marriage, we were barely making a thousand dollars a month. We couldn’t afford a couch or new tv. Our mattress was on the ground. Our life was not easy, but we always had a choice.
Every single time someone goes into debt, they are making a choice.
It Takes Sacrifice, But It’s Worth It
Both of us were working and we only had one car. We could have made payments on a car. People told us to make payments on a car. But I have to refer back to my principle: Buy what you can afford. Don’t live outside your means.
We could not afford a car. We did not have the money to buy a car, so I wasn’t going to go into debt for it. We sat on the floor and worked hard until we could save up enough to buy a couch. Many people are not willing to do that. They choose to spend money they don’t have so they can maintain a level of comfort that does not comply with their means. This results in debt.
Many people will tell you to compromise. Many people will say, “Debt is bad, but you have to have a car,” or, “You have to have a couch so it’s ok to go into debt for that.”
You can get through this life without debt. I promise, you can. Will it be easy? No. But it is incredibly rewarding. Everything I have now, I own 100%. You cannot imagine this feeling unless you’ve experienced it. You can’t put a price on the feeling of not being in debt. There are two options:
You’re either the master or the slave.
You own your life or you owe your life.
You can make excuses, you can justify, you can talk about what “good” debt is, but at the end of the day, you’re living outside your means. At the end of the day, you are the slave.
Debt Is Not a Tool
Debt is not a tool. Debt is a trap. Let me say that again:
Debt is not a tool, debt is a trap.
Don’t go into debt. If you’re young, if you’re considering it, just don’t do it. If you have to go into debt to go to college, don’t do it. If you have to go into debt to buy a car, don’t do it. If you have to go into debt to buy a home, don’t do it.
I want you to listen very carefully to that sentence: “If you have to…” You never have to. People will tell you that you have to, but every time you go into debt, you are making a choice.
You Always Have A Choice
The amount of free information available online can get you to 80% mastery in any field you desire. You just have to stop spending all your time watching Netflix and cat gifs on reddit. You don’t need college to succeed. You simply need to learn to learn. If you go to school and don’t learn to learn, you have wasted your time and you will fail.
If you don’t have a car, wake up earlier, walk to the bus station or subway and pay for a ride. No, it’s not going to be fun, but you do not have to go into debt for a car. Do not tell yourself these lies of what you “have” to do.
Rent an apartment and save up your money and buy a home. You don’t have to spend money you don’t have to purchase a home. Yes, I am dead serious here. When I buy a home, it will be a cash purchase—just like our cars, computer, tv, microphones, cameras, and everything else.
Everyone will tell you you’re crazy. That’s what they tell me. “That’s great you don’t have debt, but of course you have to take out a mortgage to buy a home.” Actually, no I don’t. Let’s look back at my principle: buy what you can afford. Don’t live outside your means. If I don’t have hundreds of thousands of dollars for a house, I don’t buy a house. End of story.
Don’t be the slave. Don’t let people talk you into “good” debt. Buy what you can afford, live within your means, and own your life.