Verse of the Day

February 15, 2007

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Here’s today’s verse of the day:

7The rich rules over the poor,
And the borrower is servant to the lender.

Proverbs 22:7 (NKJV)

Some wise words indeed from King Solomon and so true. When you look at society today, this country is definitely a debt nation. The savings rate continues to be negative which means that the American people are spending more than they’re saving. That’s not good and it’s hard to shake especially when we’re surrounded by it and it’s so engrained in the culture.

All I have to say is that you don’t have to “keep up with the Jones’s”. You have to fight the temptation to show off with your possessions because we came into this world with nothing and we will leave it with nothing as well. I would rather have money saved up and not have to live paycheck-to-paycheck than to “act like” I have money by borrowing, borrowing, and borrowing. Examine your assets. Do you really own anything? The title to your car and house has your bank’s name on it. The borrower is truly slave to the lender and until we get out of this mentality to spend, spend, spend, we as a nation will continue to be in debt. I mean, the government can’t even get out of debt and that just goes to show you that it is really part of this culture today.

Now I’m not saying that all debt is bad. I’m in the camp that says there’s “good debt” and there’s “bad debt”. Taking out a loan to pay for your education is good debt. Taking out a loan to buy a party boat to show off to friends is bad debt. I think that taking out a mortgage on a house can be good debt just because of the skyrocketing real estate prices in some areas. As long as you’re living below your means and buying a house that’s relatively affordable, owning a home can be the best investment you make. But if you can’t afford the payments with a 30-year fixed rate mortgage, you can’t afford that house. It’s generally unwise and risky to take out these interest-only loans and adjustable-rate- mortgages. Just don’t do it.

So next time you apply for a loan, remember that you are slave to the lender for the life of the loan. Not all debt is bad but make sure you really need what you’re trying to buy and that your investment will pay off some time in the future.

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