Tuesday, October 20, 2015

Debt is Dangerous

I grew up knowing the old saying, "A fool and his money are soon parted."  Our children should know that saying and they need a new one as well:  "Debt is dangerous."  It is easy make a foolish decision with finances when circumstances are complicated and you do not fully understand the potential consequences of your actions.  Now, "A fool and his money are soon parted," means you can lose all your money.  If you make a foolish decision with debt, you can lose money you do not have and end up in a hole:  paying back money you lost, having nothing to show for it but years of wasted labor, paying off a debt that got you nothing.

Many young people borrowed too much money to earn college degrees that could not pay off the heavy debt.  Now that we are experiencing the race for the next presidency, some candidates are pandering to all the fools in the country, saying that you and I should pay their debts, that we should take money away from our children's education to give it to other people's children. Widespread foolishness is leading to covetousness and a lust for widespread theft.  The inability to recognize that debt is dangerous is destabilizing our county.

Excessive debt is now a threat to our way of life; it is a threat to our liberty.  According to John Locke, government's purpose is to protect life, liberty, and property.  Remove one protection and they all fall.

Please do not allow your children to assume heavy debt without your guidance.  If you do not steer them away from danger, no one will.  Your children must understand that debt is dangerous.


Previous posts on this topic:
College Loans  (Saturday, December 29, 2012)  http://planoparents.blogspot.com/2012_12_01_archive.html

Teaching Our Kids About Interest and Inflation (Saturday, April 11, 2015) http://planoparents.blogspot.com/2015/04/teaching-our-kids-about-interest-and.html

Even smart people get in trouble with debt.  Look at the article "Lessons From Dewey Debacle" by Sara Randazzo in the 10-20-2015 Wall Street Journal.  You can see how a bunch of lawyers drove themselves into bankruptcy by borrowing money and then mismanaging it.  Being smart does not help if you are not smart about money.  Money has its own wisdom.

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