Evangelpreneur. Josh Tolley

Чтение книги онлайн.

СКАЧАТЬ again stress that if you are fighting to eliminate debt and you achieve your goal of getting back to zero, then I understand your reason for celebrating, but that celebration will be short lived. The reasons why we now find ourselves in more debt is because we are doing the same things that created the debt in the first place. No, I’m not referring to buying habits. People who believe changing their spending habits and “living below their means” is the path to sound financial stewardship don’t really understand the situation. Will the practice eliminate debt? Possibly, if you happen to remain living long enough to achieve this goal. When we look at how many years this can take, how unhealthy employment can be, and our own age and personal health, there are many who engage in this action yet never live long enough to experience victory.

      Why You Aren’t Getting Ahead

      Before we get to how we truly fx the problem, let us first realize how the problem gets worse. Many people have heard of the term “yo-yo diet” when it comes to losing weight. A yo-yo diet is when you reduce your caloric intake, burn more calories, and lose weight. Then, six months later you are ten pounds heavier than you were when you first started the diet.

      Unfortunately, we experience similar results when we yo-yo debt. Millions of people who have eliminated debt in the past are now further in debt than they were when they first took the time and made the effort to eliminate their debt in the first place. They tried, and accomplished, getting out of debt—a great achievement, just like the man or woman who accomplished the weight loss. But just like with the weight coming back, so, too, does the debt.

      To understand why the debt comes back we need to look at what course of action was taken to eliminate it in the first place. The first step most widely suggested and taken is cutting back on spending. A good start, no doubt. The second step usually taken is getting another job. Then comes eating franks and beans to cut spending even further, and then comes the spouse getting a second job as well.

      The obvious problem with this is that it increases the number of evils and the level of risk in your life and the life of your family that are created by employment and time away from your priorities. More employment equals higher rates of heart attacks and cancer, divorce, pregnancy, and drug use among your children, and so on—all in the name of getting out of debt.¹⁵ I am all for getting out of debt, but at what cost? Having debt can create problems, too, no doubt about that, but sometimes our efforts to eliminate debt actually amplify the problems we are trying to avoid in the first place. If debt is causing stress in your marriage and the family is sacrificing more time together in order to eliminate the debt, which in turn creates more stress in your marriage, did you accomplish the goal?

      Let’s say that you decide getting out of debt is so important that you are willing to take the risk and get those extra jobs, more hours, or what have you. Let us say also that you live long enough to see that debt eliminated. Your family sacrificed for the short term with the idea of having a better life long term. “Do today what others won’t so you can do tomorrow what others can’t,” right? For a time, maybe.

      The Bible clearly points out that debt is something we should avoid, and I obviously agree that getting out of debt should be an individual and family priority. A person in debt is a person without options who is servant to the lender. What I don’t agree with is the method so commonly taught for how to get rid of this debt—employment.

      For argument’s sake, let us say you don’t have to get two jobs, and your wife doesn’t have to get two jobs, and you don’t have to put in extra hours at work. Instead, you sold the boat you were making payments on, you told the kid down the street you would start mowing your own lawn, and you manage to get rid of the debt. Yay you! Now what?

       This Isn’t Your Grandfather’s Dollar

      Here enters the monster in the room: inflation. Inflation has had a practical yearly rate of about 10 percent for the past 100 years, give or take a point or two.¹⁶ Inflation is one area where most people, including those who think they know what the economy is all about, tend to make a huge and costly mistake. The worst thing you could do is Google “yearly inflation rate” because it shows us nothing. That number is a calculation that reflects only choice indicators in the market. As a matter of fact, even the way inflation is officially calculated by the government has changed, and if you took a 2 percent reported inflation rate today and used the calculation they used before, the rate today would actually be 6–9 percent.¹⁷ That is just as wrong, though, because even with the old math they were still only looking at certain market indicators, which they keenly selected and used in their calculations. Inflation is worthy of a book on its own and inflation isn’t the only factor that erodes monetary value; other things that have to be calculated and considered are GDP minus lending, cost of living, devaluation of currency, trade deficit versus issuance of currency, artificially low interest rates to spur lending (Quantitative Easing, for example), PPI, CPI, MZM, wage and price controls, and domestic price growth. Even Congressman Ron Paul (R-TX) stated in an interview with Yahoo! Finance that CPI is not what should be used to determine inflation and that the government’s inflation number is “rigged.”¹⁸ Congressman Paul, while grilling Federal Reserve Chairman Ben Bernanke on this very issue of inflation, explained how even if we were just to use consumer price index (CPI), we would be at 9 percent annually (even though it was “officially” around 1.5 percent).¹⁹

      In addition to all that, we have debt on the issuance of currency that does not get calculated into the equation. When the United States puts a dollar into the market, not only does it devalue the other dollars in the market, but we also instantly owe a debt on that dollar to the Federal Reserve Bank that printed it.

      We can see the effects of inflation easily when we look backward. For example, in 1977, when I was born, the average household income of $11,992 when adjusted for inflation, according to the Census Bureau, is now worth $51,939.²⁰ However, if inflation were really only 2 percent a year it would mean that today, adjusted for 2 percent a year inflation, we would be seeing average household income of only $25,118. Keep in mind, household is combined income of all working adults at the address. In 1977 most household income was made of just one income earner. Today it is usually two or more, meaning this is much worse than most of us realize.

      Most of us over the age of thirty have lived long enough to experience cost-of-living increases, but because that cost-of-living increase happens on so many things over so many years, we tend not to notice it. For example, who remembers that in 1995 a gallon of gas cost ninety cents? Almost impossible to believe, but it is true! Twenty years later we would still be below $2 a gallon if inflation was really only 4 percent a year—$1.97 per gallon to be precise. How many of us would think Heaven had come to earth if we woke up today and gas was $2 a gallon! In 1995 you would have been yelling at the television if the price went as high as $2; now $4 a gallon is becoming the norm and $3.50 per gallon is considered the common cost. Sure, oil is a commodity and more than just inflation is responsible for increased prices, but that only goes to further the point of this chapter: costs go up without your control and inflation is just one aspect of those rising costs. You have no control over the rising costs; shouldn’t you have control over how your income can respond to those rising costs?

      Consider this: A thirty-year mortgage that ends today started in 1985. Many people thought in 1985 that because they were making a decent wage and saving 10 percent a year, that it was the time to buy a home. But did they consider inflation? Did they think it was only 4 percent at the time and would mirror their rise in income? In 1985, the cost of the average home in America was $98,100.²¹ In 1989 the same house was $148,800. Inflation is 3–4 percent a year, huh? In your dreams. In just four years, there was a cumulative gain of 11 percent per year in housing cost.

      Now, you might be thinking that wages went up enough to compensate, right? Not even close. In 1985 the average household income was $23,620,²² and in 1989 the average household income was $28,906. This means that СКАЧАТЬ