Breakfast at the Ritz

There are different kinds of property. First of all, there are things you own that don’t generate any income. For the sake of this discussion, let’s assume that you don’t owe any money on the pots and pans in your kitchen. When you aren’t using them, they just sit there. It doesn’t cost you anything to own them and they aren’t producing any income. Cars and cell phones are another kind of possession. Again, assuming you paid cash (Ha!) you own them, but they are taking money out of your pocket on a regular basis. Unless they are an unavoidable business expense, they don’t contribute to your wealth. On the other hand, you can buy something that pays you to own it. For most Americans, this would be stocks and bonds or rental properties.

Banks make money by loaning out more money than they have on deposit at higher interest rates than they pay their depositors. They want you to borrow money to buy things you don’t need with money you don’t have to impress people you don’t know. Corporations that produce cell phones, televisions, cars, or houses want to separate you from your money. Bayerische Motoren Werke AG wants your money more than it wants that 540i sitting on the showroom floor at your local dealership. If the BMW dealer can get you to borrow money to buy the 540i, or better yet, convince you to take out a lease that generates a constant income stream and ultimately leaves him with a low mileage late model car to sell to someone else, he has discovered the goose that lays golden eggs. All corporate media outlets, marketing organizations, and advertising agencies become wealthy by stealing your time from productive endeavors, lulling you into a pleasant stupor of inactivity sponsored by financial institutions and corporations who want your money. Politicians want to keep you in a state of constant agitation and continued ignorance, so they can control your behavior, limit your freedom, and take your money.

The World System, The Big Green Machine, doesn’t exist to protect you or promote your interests. Every time you make a financial decision, you are heading in one of two directions. You are either on you way to becoming an owner, someone who owns things that generate an income or increase in value, or you are becoming—someone’s property. You are either on the road to freedom or to slavery. Think about it. If you don’t own your own labor, you are not free. If a creditor has a prior claim on the fruits of your labor, you don’t own your own labor.

The Bible says, “The rich rule over the poor and debtor is slave to the lender.”

You have a choice to make. The power is in your hands.

As I thought about writing this post, I remembered back to the first time I ever bought shares in an individual corporation, Exxon. I don’t remember the exact numbers, but at the time we didn’t own a house or have any debts. We may have had something like $4,000 in the bank and another $500 in a crappy mutual fund. At the time I didn’t know that $4,000 was our emergency fund. I plucked down maybe $1,000 or a bit more to get into the game. I remember the feeling I had every time a quarterly dividend check arrived in the mail. It was enough to make me fantasize about reading the Wall Street Journal while smoking a big cigar and drinking a fine cup of coffee after enjoying breakfast at the Ritz.

Ultimately Exxon helped put me through engineering school. That money is long gone. I have never subscribed to the Wall Street Journal. I don’t smoke cigars, but once we got a real good deal on a Hawaiian vacation package that included breakfast at the Ritz Carlton Kapalua Bay. By the way, that five star resort serves an excellent breakfast.

If your employer offers a 401(k) you can start out on the road to becoming an owner before you have a spare $1,000 to open your first brokerage account. The sooner you convince yourself that it is better to buy assets that grow and pay you to own them than it is to own depreciating assets that drain money from your pockets, the sooner you will find financial freedom.