Home » MYOB » Drop Dead Money

debtHave you ever wanted to tell your boss to get stuffed?

I suspect many of us get that urge on a regular basis but we usually don’t follow through – even when we are sure it’s justified – because we don’t want to get fired.

We need money to buy food and pay the bills, and many of us need money to pay off our debts.

There are a lot of people who believe borrowing to live well now and then pay for it later is the way to go, but I am not one of them.

As a matter of fact, I do not think debt is good, at least not for ordinary people who have salaried work.

Before we move on I’d better clarify that.

I think there are many times when borrowing money is intelligent as long as the money is being invested in a potential asset that is likely to bring in more than the amount borrowed.

That goes for machinery, tools and other money making equipment, a college education or any form of training that would lead to a better income.

It can also make sense to borrow money for a home mortgage instead of paying rent if you are happy to settle down and grind away at your job for the next 25 years.

If you are not, however, mortgages can be a burden, as can credit card bills and other forms of debt.

Ever since the early days of the industrial revolution factory owners have known that paying workers as little as possible is an extremely effective way to keep a stable workforce.

If workers are just barely surviving they can’t risk doing anything to lose their jobs.

Fortunately wages are a bit better these days – at least in most parts of the world – but many of us still can’t afford to quit or do anything that would get us fired because we need our salaries to pay off debts… so we are still tied to our jobs.

Maybe that’s just a coincidence, or maybe that’s the way the people who run our economies want it to be.

All I know for sure is that there is a lot of pressure to live on credit so we can appear to be doing better than we actually are.

The thing is getting tied into debt repayment can steal our freedom.

That’s why I think it is important for us to be extremely cautious about borrowing and to make it a priority to get out of debt as soon as possible.

That might mean tightening our belts for a while and working longer hours but those things can be seen as an investment.

Then we should think about putting away some drop dead money.

That’s not money we leave to our families so they can get by when we keel over; no, drop dead money is whatever we think we need to have saved up so that we can survive long enough to find another source of income if we happen to lose the one we have.

And once we have that, we would have the freedom to tell our boss to drop dead.

I’m not saying we should be looking to do that, but just knowing it is an option can greatly improve our outlook on life.



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