You can’t always get what you want

November 8th, 2007 Written by Biz

Recent events in the financial markets and, in fact, empirical evidence from the High Street, all point to a marked slowdown in the economy, if not an impending recession. The main trigger for this turn of events has been the fallout from the sub prime lending fiasco, but at a much deeper level is symptomatic of the buy today, pay tomorrow mentality that has become prevalent in the past two decades. 

 

Increasingly, many of us have been tempted to live today and defer the inevitable payback almost indefinitely, via loans, credit cards, interest only mortgages, property equity withdrawal and all manner of easy credit strategies; but as surely as night follows day, credit has to be redeemed and I fear that the day of redemption may be fast approaching. 

 

For those of you who have not experienced the mechanics of a recession (most people under 30), the most relevant feature to those with heavy credit exposure, is that free money diminishes, credit is scarcer and most importantly, interest rates rocket. Those living on perpetual credit, those who have over-reached themselves by taking on too big a mortgage and those who have indulged in the folly of interest only mortgages, all stand a chance of being ruined. 

 

Nowadays it seems to be the done thing to apportion blame for every calamitous event, so who is to blame for this particular event? Most would unhesitatingly blame the Banks and Financial Institutions for offering such easy credit for so long; how dare they lure us with their loans, credit cards and mortgage deals! As uncomfortable as it may be though, the stark truth is that we ourselves are to blame for being so stupid as to load ourselves up with debt. 

 

There is, however, one group of people who will almost certainly have avoided any approaching financial turmoil, a group who fortune decreed should be born during the 1960’s or before, a group who’s memories of how things used to be, would have equipped them to decline offers of easy credit and keep them on the path of financial probity. 

 

For those not fortunate enough to have learned their lessons first hand, here are the cornerstones of these people’s experiences: 

 

• The borrower is slave to the lender. 
• Avoid debt at all costs – it is easy to get into, but twice as hard to get out of. 
• If you can’t afford it – don’t buy it – make do, until you can afford it. 
• Save regularly – there will always be a ‘rainy day’ somewhere down the line. 

 

And there we have it; the accumulated knowledge of times past encapsulated in just four lines. Now many may scoff at the simplicity and the ‘old fashioned’ nature of these points, but by following these simple principles, you will be a free sovereign individual beholden to nobody instead of an indebted surf at the mercy of your lenders interest rates. 

 

Perpetually living beyond your means is both practically and metaphysically unsound – your projected ego is living apart from the true reality of your situation, which puts your life off balance; and things that are off balance generally tend to fall. After the coming recession, if indeed it does come, perhaps people will once again come to realise that a debt free life is ultimately the way to live and people may again discover the truism espoused by the Rolling Stones; “You can’t always get what you want”.

Entry Filed under: Rants & Views