Friday, October 18, 2013
This post started life in my mind as a simple introduction to the next step after avoiding or eliminating debt, savings. As I began to examine the problem, I realized there were two reasons that people don’t save. They don’t believe it is possible to get out of debt. They believe the game is rigged. From time to time I use this quote from the notorious card sharp and conman Canada Bill Williams. Once one of his victims complained the game was crooked. Bill answered, “Yea, but it’s the only game in town.” There is nothing I can do about the fact that the Federal Government and The Federal Reserve Bank mercilessly punishes savers. The Fed has driven interest rate to zero. The IRS treats interest from savings as income. It is taxed at the highest rate possible. On the other hand, the Government allows you to deduct the interest on your mortgages, even that second mortgage you used to buy an SUV you couldn’t afford. Don’t you see what is going on here? The banks are using Government policy to keep you in debt slavery. In simplistic terms, you are giving the bank three dollars. The Government gives you one dollar in a tax refund. You lose two dollars. If you don’t give the bank any of those three dollars, the Government will take one of those dollars away from you. You keep two dollars. The game is crooked. It shouldn’t surprise you that since I am a Christian, I talk to Christians. Some of these people have faith in our Lord that just puts me to shame. They pray for healing, really believing in the power of prayer to deliver those who suffer from the bondage of sickness. Some of them have seen miracles in their own lives. Some of these same people look me square in the eye and inform me, “Well, you have to be in debt.” They have learned not to challenge me on credit cards and car loans so they add, “You have to have a mortgage.” Well, no you don’t. You choose to have a mortgage. You can always rent. It may be a wise decision to take out a mortgage, given the particulars of your situation, but nobody made you do it. In 40 years as a Christian, I have never once heard a sermon on the evils of debt even though the Bible is full of warnings on the subject. I asked a friend in the ministry why was this so. His answer, “Probably because all preachers are in debt.” Worse, the Church is in debt. Why doesn’t bother believers that the House of God is owned by the bank? Anytime anyone asks you to give them a portion of your freedom or your money; be suspicious. Whether it is a politician who is offering you something for nothing or creating a crisis that requires a sacrifice “for the children,” or a marketer telling you that you must go into debt to have a marvelous new product, be suspicious. Better yet, just say, “No!” You can avoid or escape debt. Once you are out of that trap, buckle down and save. I am assuming you already have an emergency fund started before going after your debt. Savings are the beginnings of investment. Investments are what make an individual, a company, or a nation rich. Once all that money that is now going to the bank and the credit card company is free, you will be surprised just how much you can save. Yes, you will be punished for doing the right thing. Do it anyway. Once you have saved $1,000 you can open a Schwab account. Once you have saved $3,000 you can open an account at Vanguard. Then you can start using your dividends to buy more shares for most American companies and mutual funds at no charge. You can start benefiting from capital gains that are taxed at a lower rate, just like those evil rich people. You don’t get to make the rules, but given the rules, you get to decide how to play the game. No matter what the rules of the game might be, someone is winning. I want that someone to be you. That is why I am up at 6:00 writing this rant. May you be blessed. May you be delivered from debt. May your net worth increase. May you learn to give and become a blessing to the world. Amen.