I’ve been sitting through a class on credit management for the last 3 days. Not only has the class been educational it’s been philosophical. It makes you realize how the American financial system works. Not that the system works for us but that the system works for the top 1%. One of my key take-aways to this end is a quote I created. “Pay debt to save for debt, build credit to afford debt.” What I mean is the system is created to only give you debt. You don’t get to buy a house, car or major purchase without taking a loan. Unless you are like I just stated the top 1%, or financially well off enough to pay outright. What this means is you pay off debts just to save money. The only reason you save money is to incur future debts. You then build your credit to demonstrate you are financially stable (not a risk) to take on larger debts. What this means is we get to build a portfolio to owe someone else. Now the class is great because it teaches you to have credit work in your favor. Yet, the question still rings in my head. Is it all worth it, if I get to own nothing and owe everything? Maybe. I’m finding there is a life lesson in all of this. It’s not financial knowledge that makes you rich, it’s how you conduct yourself in life. We already know we can’t own unless we are rich, but we can work in the system. I want to start a life coaching seminar or path. Something people can turn to grow in wealth and mindset. This is the first writing of many and the first of many long life lessons. Life lesson one: don’t let debt scare you, it could be helping. I think of this in the context of student loans. I’ve had this thought that I need to pay them off as quickly as I can. It is a debt. Without them I could afford more, get better loans, and not have a steep monthly payment. Or I could hold onto them, pay them off over a longer period of time and build my credit score with debt payment history. After all, one of the factors in a credit score is the life length of credit. If I’ve paid my student loans for 10 years I’m less risky to a lender than if I only have 3 years of payment. In a counter intuitive way I’d be able to get better loans with a higher credit score by maxing out the years I pay my student loans. Not only that but the interest is a great tax write off. You need to start changing your habitual thoughts on the system. If we know it’s rigged, why not use it to help us get what we want. Till next time.
Housed and Fed 