As we study personal finance management, we cannot avoid the subject of the dangers and risks of high personal debt or high indebtedness. If there is one lesson that we have learned from the current financial mess in the world is that unless you control the amount of debts you have, you will learn the hard way when you lose what you considered to be your properties. If at all possible it is important to avoid debts and only enter into debt when it is absolutely necessary and only enter into debt you can afford to repay without problems. As one writer puts it, avoid debt in the same way people in the bible avoided contact with lepers.
I have heard of people who repay their loans using their credit cards and therefore eventually end up paying more interest on the credit card debt than the interest on the loans or mortgage they are repaying. We seem to be addicted to credit cards that we sometimes disregard the consequences of using credit cards especially when we end paying the minimum repayments on the debt.
The following video, Tyranny of Debt by G. Edward Reid goes through the dangers and risks of debt. It is my hope that it will open your eyes to the dangers inherent in debt.
No comments:
Post a Comment