A simple fix for the economy?

Another way to financial independence is to spend less.

“The disease,” says Peter Schiff, President, Euro Pacific Capital, “is all this debt-financed consumption.” The cure is “stop consuming so much…”

I agree with Peter Schiff. It know it’s true for me as an individual, and it’s true for the U.S. Government. The feds are just doing what we’re doing – borrowing like crazy. Who else is ready to stop doing that as a life style?

Jargon watch: Anything we buy on credit is “debt-financed”.

For me, most of my income right now (and it’s not small) goes to pay bills. What else is a bill but a thing to pay each month for a purchase I made? On credit?

That’s why I’m a well-dressed slave…Just like the U.S. Government. There’s lots and lots of money being spent, but most of it is borrowed, and all that comes in goes to service the debt, aka pay the bills.

What about you? Why do you keep your job? Nearly everyone says, “To pay the bills.”

Why do you want a business of your own? Isn’t it to pay off all the bills and be “financially free”? Free from the debt-financed burdens we put on our own backs in the past.

Isn’t another solution to financial independence to just spend less?

For myself, I’ve decided to:

  • stop getting into any more debt to buy stuff. ANY stuff, including money-making programs, on which I’ve spent thousands and thousands. It’s a debit card or I’m not buying.
  • I’m taking conscious steps to get out of the debt I’m in so I enjoy what I earn, more.
  • NOT easy. But I’m not alone.

    To be accountable to my cohorts, readers and to myself, I’ve set up my 5 and 5 wealth and give accounts. So have a bunch of my friends. See here. It’s already changed things for some of us because we are now accountable – to each other.

    I’m hoping that a group of us doing these hard things together will make it more fun and more likely to sustain itself for the 90 day experiment.

    NOTE: 55 spots left in the 5 and 5 wealth program right now. No charge. Just a chance to make a change and be accountable to seeing it through. If the experiment works, we’ll do it up big time – for the tens of thousands of folks who feel the need to make this kind of change – from the inside out.

    P.S. China, which buys most of the U.S. debt (lends us billions, that is) said today:

    “The US spends tomorrow’s money today. We Chinese spend today’s money tomorrow. That’s why we have this financial crisis.”

    Yet the consequences are not symmetric.

    “He who goes borrowing, goes sorrowing,” said China’s Mr Cheng.

    It was a quote from US founding father Benjamin Franklin. See here.

    About the author

    Kim Klaver


    • In The Richest Man in Babylon, George Clason suggests that making charitable donations should only start when all debts are paid, but that creating a personal wealth fund should be part of a debt repayment plan.

      I've just agreed to such a plan myself, and unfortunately the administrators do not take such an enlightened viewpoint. They took a view on what was reasonable personal expenditure, and required a commitment that the whole of the excess be given to my creditors.

      But there is a clause that, should my income increase over the next 5 years, only 50% of the excess has to be given to the creditors, so I am now committing to putting my 50% equally into Wealth and Giving accounts until that equates to 5 plus 5 per cent of my total income.

      Thanks for the shift – I am feeling much more positive about the next 5 years!

    • Kim,

      Thanks for your transparency. I am so turned off by the hype and promises of fame and fortune by so many of these internet mongers.

      My respect is slipping for some who I held in higher regard until they started pitching these ridiculous programs just to make a large affiliate cut.

      I tell people – Find ONE mentor; invest in one "teaching tool" and unless you study it; learn it and put it into action, don't spend one more dime.

      You're chasing an elusive dream if you do!

      EXPECT Success!

      Jackie Ulmer
      Street Smart Wealth Group

    • One of the best books I have ever read of this subject is, "The Millionaire Next Door".

      A few things I remember:

      Most millionaires are self employed.

      Most millionaires live below their means.

      And most millionaires who are self employed and live below their means are either out of debt or close to it.

      I believe most people are in debt and live a financed lifestyle because they have a job. They believe there is more where that came from (paycheck), so why not go ahead and get it now?

      That's okay for large purchases such as a house, and maybe (maybe) a car, but where does it stop?

      I have a sister and brother-in-law who are successful and have a combined income of over $100,000 a year. Yet one time, when one of them had a delay in getting their monthly paycheck deposit, they went into a panic. They NEEDED that money to make ends meet for that month.

      They have NO clue that they are highly paid wage slaves.

      And they are some of the nicest people you will ever meet. But they like the large home, new cars and nice vacations, among other things.

      I have said this before, but years ago I heard someone say something I've never forgotten:

      "The less money you spend, the less you have to make."

      And I have tried to live by that principle ever since.


      Eat Well. Live Well.

    • I have just opted out of about 30-40 emails that were pitching me on "how to (fill in the blank)" offers.

      I'm sticking with the 5/5 program (no cost) that Kim is doing. Although I'm doing the 10/10 (based on tithing.)

      I've started reading material by Dave Ramsey (Financial Peace, Total Money Makeover, etc) and plan to get out of this debt using sound principles. Giving and saving. No credit cards. Debit cards only. To live like no one else (now) so I can live like no one else (later).

      I have a new body using the ER Fat Burn and now need to get a new life. I will be a lot quicker to say "no" to anything that I have not thought about and want to pursue because it rings true in my heart and mind.

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