The Chain Gang and The Ties That Bind ~ Yesterday’s dumb decisions can affect today’s opportunities

Hi Folks! For today’s contribution to the sections on Living Frugally and Money Management, I’m going to repost an article I have just come across on one of my flash drives. Turns out, I wrote this article back in 2006 for my first ever financial blog. It is just as applicable today as it was then.

Thursday, January 26, 2006

 

The Chain Gang and the Ties That Bind

Yesterdays dumb decisions can affect todays opportunities…

If you are like the millions of Americans (myself included) who have found themselves “Sentenced To Debt” and are serving out out their remaining time on a “Chain Gang,” well here’s a newsflash… The stuff you bought on credit yesterday, the new Chain Department Store Credit Card you just applied for and received, or the $50,000 Status Vehicle in your driveway… can hold you back from some great opportunities TODAY!

 

To prove the point, I’ll use myself as an example. Luckily, I monitor my debt level, and monthly payment totals every 3 months, so I consider myself to be more fortunate than in years gone by. I have no problem offloading (selling) any excess stuff and its subsequent debt if my debt load has crept its way to an uncomfortable level. Yes, any debt is considered uncomfortable for me, but sometimes it is a necessary evil, such as when you are using “controlled debt” to repair and rebuild your credit rating and credit score. More on that subject later.

Back to the point… I have recently been blessed with an opportunity to buy a wonderful property for nearly $200,000 below its market value! But oh my! How can I afford that??? Especially since a made a few Big Ticket Purchases in the last 3 or 4 months! They seemed to make sense at the time…Ha Ha…Gasp! What to do?

 

Well, I had to PASS on the property, and now I am on a mission to Liquidate all of my “Stupid” consumer debt! If I want to be able to take advantage of any future opportunities like this, I need to cut a huge amount off my payment and debt load in order to : 1) qualify for the loan and 2) afford the doggone mortgage payment! Not to mention that money spent on down payments for some of those non essential buys, could come in handy for the DOWN PAYMENT! Ah, even the smartest and most credit wise of us, can occasionally drift into deep water if we dont watch out.

Think about that the next time you get the urge to buy a $20,000 motorcycle on credit, or a boat, jetski, travel trailer, or luxury car, etc. Or if you feel the need to max out your new credit card on the first day. Not only does debt cost us money(interest) it can cost relationships, sleep, and of course cost us opportunities. You could potentially miss out on an instant $200,000 in Equity, as I did, as well as a dream home for my wonderful wife. A dream home that normally we could not afford, but with the opportunity brought before us was a possible dream. Now its more like a fantasy, than a dream. Just think, a $20,000 toy cost me $200,000 in Equity and a dream home for my family. I darn sure don’t enjoy the bike $200,000 worth!

Fortunately, I can be free of my non essential debt in less than 90 days, but you may not be that lucky. You may been in up to your eyeballs… but cheer up! There really is “Life After Debt!”

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