Debt Is Enslaving You
Modern Day Indentured Servitude
Indentured servants were generally poor people looking for a way to travel to the New World. Unfortunately for them, they did not have enough money to purchase passage. They would trade a trip by boat for a predetermined number of years of service to an employer. At the end of their service, they would then be free to work for themselves. Indentured servants traded a trip and a chance for a new life for years of enslavement. Work was not the only thing that was determined by their “employers.” They were also physically punished and were not allowed to marry without permission [1]. This is the definition of being owned by your debts.
Being in debt today still puts you into a modern day version of indentured servitude. When you take out a loan, you become a slave to your lender. There are some laws in place that help protect the borrower to an extent. For example, debtors prison is no longer a thing, lenders do not literally own borrowers, and a lender can’t garnish your wages (although the government can). However, technically the money that you make going forward is already spent. It is already spent on that widget or service that you bought in the past and possibly have already consumed.
You Are Enslaved to Work In Order To Pay Off Your Debts
Not only are you a slave to your debts, but you become a slave to your job when you owe money. Now you have an additional expense that you have to pay each month without choice. You already have to pay for food, water, and housing every month. By adding on another expense you are more likely to feel forced to stay in your current job, regardless of whether you actually enjoy it. According to the 2015 Gallup Poll, 68% of people are less than completely satisfied in their current job [2]. That number is insane, but makes sense when we think about how much debt people are in. The average person has about $15,000 of credit card debt [3]. Let’s assume an interest rate of 18.9% annualized, a 4% minimum payment, and that you continue to pay only the minimum. At this rate, it will take 15 years 2 months and cost a total of $24,604.18 to pay it off! Talk about being forced to work, you’re paying 164% of the money that you borrowed back!
You Become a Slave to Time
When I was $70,000 and unhappy in my job, I just kept telling myself, “I won’t have to live this way forever. When I pay off my loans, I’ll be able to quit my job and do what I enjoy. This is just the way it is right now.” Have you ever found yourself saying similar things? Debt causes you to become a slave of time as well. You are paying more than money and labor when you take out loans. You are paying with your life force, your time.
Find out how much time it will cost you to pay this off. Take the amount of money you owe and divide it by your hourly wage. If you owe $15,000 and you make $15/hr after taxes, then it will take you 1,000 hours or just shy of 6 weeks to pay off the principal. That doesn’t even include the amount of time it will cost you to pay off the interest. If we take our number from earlier, it will cost you a total of $24,604.18 / $15/hr = 1,640 hours 16 minutes 43 seconds to pay it off including interest (or 41 full work weeks at 40 hours/week) . That means you will pay back an additional 640 hours 16 minutes 43 seconds (or 16 full work weeks at 40 hours/week) just because you took out the loan instead of paying cash upfront for those doodads.
Time is the Most Valuable Resource
No matter how much or how little money that you make in your life, you are bound by time. Statistics say that you will likely live between 70-80 years depending on a variety of factors [4]. Let’s just say about 75 years. This is the same as roughly 900 months, or 3,900 weeks, or 27,300 days. Being wealthier or poorer, living in the right place, and eating habits all may stretch or shrink this number slightly, but there is ultimately no escaping time.
3,900 weeks. When I think about how quickly a week goes by, that number seems insanely low to me. I’m a hands on learner, so let’s make this number a little more tangible. Download the “Getting Rich Young – 3,900 Weeks of Life” worksheet [5]. Now start crossing off the number of boxes that you have already completed. Look at what is remaining. Time seems a lot more precious when you can see the end on paper doesn’t it? How much of your future time is already spoken for towards paying off your debts? Mark these sections onto your worksheet in different colors for a visual idea of how much time you have left after your debts are paid and what portion of your life you gave away to interest payments.
The purpose of this exercise is not to depress you, it is to inspire you. You have to know where you have been and where you are in order to make a solid plan for moving on. Knowing that you won’t live forever will allow you to stop wasting your most precious resource, TIME. Don’t sacrifice your time tomorrow for some widgets that you bought on credit today.
In Summary: Your debt is paving the way for somebody else to get rich
- Your money is paying for your lender’s retirement
- Your labor is paying for your boss’s retirement
- Your time to prepare for retirement is being given to those people whom you are enslaved to.
Don’t keep giving your time and lifeblood away. Break your chains of indentured servitude and regain control of your present and future. Next we will take a deep look at your financial past and present in order to see what steps to take to secure your future.
Thank You
Thank you for taking the time to read a little bit about my story. I have put a lot of effort into preparing this blog already, and I am so excited to continue to pour everything I have learned into it. If you ever want to know more about me or have a question for me, please feel free to reach me at [email protected]
Continue the Discussion:
What did your 3,900 Weeks of Life chart look like? How did this make you feel?
Resources:
[1] https:/en.wikipedia.org/wiki/Indentured_servant
[2] http://www.gallup.com/poll/1720/work-work-place.aspx
[3] http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/
[4] https://en.wikipedia.org/wiki/Life_expectancy
[5] Note: I am not the first to come up with this idea. I have seen similar ideas on various other blogs, I have just created a similar version in pdf for your convenience
