Information the banks try to keep from you!

Introduction

I am very unusual. I have almost no debt (I still owe $8,000 on my house, but I have only been a homeowner for 2 years). I have no car loans or credit card balances. Our expenses our low, so I can work at a job that I actually enjoy doing. My job is not high-stress, nor do we have to worry about our bills. My wife can stay home to raise our family, because no banker overlord forces us to do otherwise. And that is despite the fact that three years before this writing, I had only $300 to my name. But at least my lack of money was matched by lack of debt.

I was lucky to learn from the masters the secret of personal finance (avoid paying interest as much as possible). So I have always avoided carrying a balance on credit cards, I paid off my cars early, etc. and never got into financial trouble.

We can all live debt-free if we really try. It takes hard work, planning, ingenuity, and self-discipline, but those things, too, can become second-nature with practice.

This pamphlet was written to help people in all walks of life to learn the truth about interest, and how to free themselves from Debt Slavery. Please distribute this as widely as possible forward it to all your e-mail contacts, make photocopies, upload the file to your website, post it on your blog, distribute copies at your church, etc. You are doing a great favor for whoever you give this to.

This pamphlet was written anonymously, because my identity is not important. Besides, some bankers might not appreciate having hundreds, thousands, or even millions of their slaves figure out "the system" and gain their freedom as a result. Money is power, and I do not have nearly as much money as they do.

People frequently fall into 2 well-laid traps. Trap A tricks you into buying a dollar more than you need, which costs you 3 or 4 dollars in the long term. The benefit you choose is small (for instance, the benefit of having a brand-new car over a 2-year-old car), but you pay much more in the long run, especially because of interest. By avoiding this trap, you receive a LARGE savings, in exchange for giving up a SMALL benefit.

If you buy a house or car that costs $10,000 more, you are not just making a decision to spend an additional $10,000. Yes, you are agreeing to pay back that additional $10,000, which increases your debt. But you will also pay a lot more interest. And for houses and cars, the cost of insurance on a more expensive model will be higher as well.

So by learning to get by with less, you are saving a lot more than the mere price difference between the two.

Trap B tricks you into spending money where there is no need to. For instance, spending a day at the theme park rather than a day at the park. Buying fashionable clothes when you are in no danger of going naked. Buying stuff just because it is on sale, even though you got by just fine without it. Habits like this can easily result in massive debt over time.

The world at large is clueless about the real path to happiness, but most people follow the conventional "wisdom". I put wisdom in quotation marks because it is actually foolishness. But the majority of people who have followed that conventional "wisdom" are now deep in debt of all kinds. They have little or no control over their lives, since they pay hundreds of dollars in interest every month to a bunch of rich bankers—bringing no benefit to their families at all. Since conventional "wisdom" leads to this kind of Debt Slavery, I would suggest it is time to revisit the philosophy that everyone follows, and expose it for the fraud that it is.

Most people are too busy to stop and evaluate their life objectively "this causes many people to hasten down the road to misery, and wonder" What happened?" when they arrive there. This book is a road map, to get people OFF the road to misery and ON the road to a life where happiness is possible, where they can enjoy the fruit of their labors.

What is "Debt Slavery"?

Debt slavery is where your debt load dictates your life. You would like your wife to be able to stay at home with the kid(s), but your monthly expenses are too high to allow that. You find yourself restricting the number of children you have, blaming it on your economic situation. In short, Debt Slavery is paying more than 5% of your income for interest on debts.

Being poor is one thing. But being poor because some banker is getting all your money is another thing altogether! Being debt free brings a wonderful peace, a lack of worry that those who owe their lives away to the bank never get to experience.

Debt Slavery is NOT the same as being poor. A poor, retired couple might be able to live well on $700 a month Social Security, because they have no debts. Meanwhile a young couple with much debt might not seem to be poor, but they are in Debt Slavery nonetheless because they give away hundreds or thousands of dollars a month in interest. They might live well, but they should be able to live even better. It is more desirable to "live with less" than to pretend to a higher standard of living than you can actually afford, and consequently become shackled with debt.

Consider that some of the happiest families in history lived "below the poverty line". They were content with their station in life, and they worked hard. They did not try to behave or live like the rich. But today you have just that poor people who want to pretend they are as well-off as people with three times their income. Today men only value wealth. Wealth, and the power that flows from it. Since these are the only things that bring respect in today's world, it is no surprise that everyone wants them.

The true joys of life (peace of conscience, following God's law, raising a family, helping others, following one's true calling) are marginalized by those whose religion is Consumerism. But the expression, "the best things in life are free", is not just a clinch. I have seen plenty of evidence that supports it.

The massive plague of Debt Slavery seen today is a result of ignorance, poor planning, poor self-discipline, and the "system" itself.

Many people today do not understand the true nature of interest. They have no idea that there are other possibilities besides slaving one's life away for the moneylenders.

Since the world is so fast-paced, and there are so many distractions, few people take the time to plan well. Our culture values "fun" and "spontaneity" instead of soberness and calculated planning (unless the latter helps us to earn money �which is the highest good, according to modern values).

All the ads that surround us are not going to help us to control our desires. On the contrary, their aim is to make us want many things that we cannot afford. If we do not make a conscious decision to control our spending, human nature will coax us along with the herd into spending more than we earn which can only result in debt. This destroys our happiness and spending power, because we not only pay for it later, we pay for it with interest. Debt would not be so bad if you only had to pay back $10 for every $10 borrowed. But unless you borrow from generous family members, you will pay back $15, $20, or even $30 for every $10 borrowed.

Lastly, the plague of Debt Slavery can be blamed on the "system" the credit card companies and the economy itself. The credit card companies are guilty because they send out 6 BILLION credit card offers a year to families nationwide (that is the actual number, not an exaggeration!). And when they get you to carry a balance, they only ask for a small monthly payment which barely covers the interest on the loan, keeping their victims in debt for many years. The economy is also to blame because there is not enough money in circulation to go around (see below, About the Money Supply).

But the credit card companies are not all-powerful they are easily resisted. So the victims of their schemes must bear at least part of the blame. After all, I receive dozens of such offers every month, and I know what to do with them. I cast them with disgust into the trash where they belong. I react as if someone tried to chain me up and cart me off to prison (because that is what they did try to do!)

To illustrate the evil of Debt Slavery, take a family that has a $9,000 balance (the current national average) on a credit card that has an 18 percent interest rate. Since they read How to avoid Debt Slavery, they decide to cut up the card and never use it again. Even if they pay the minimum payment of 2 percent of the balance each month, plus interest, it will take them 47 years (and close to $33,000) to pay off that $9,000 debt! So every $3 gallon of milk cost them $12, every $50 pair of shoes cost them $190, etc. If I had to pay that much for goods and services, I'd be pretty low on cash!

Now imagine how much money they'd be giving away to the bankers if they owed $18,000, or even $25,000! They'd never be free, unless they started paying big chunks off the principal (by sending in extra payments).

Now we will define Debt Slavery by what it is not namely, freedom.

I have known, and heard of, many retired couples living off Social Security alone who have plenty of disposable income. That is because they managed to pay off their house, they have only one car (paid off) and they never used credit cards (at least not to carry a balance). A young couple, burdened with debt (credit cards, student loans, mortgage, car payments), might need an income of $3,500/month to support a middle class lifestyle. But a debt-free retired couple can probably achieve that same lifestyle for $1,000/month. Remember, being in debt means you have to pay back the actual loan the principal - every month as well. Interest is the worst part, because it is a total waste. But the young couple in debt is also repaying what they borrowed, as well as paying interest on the various loans.

Now you see why people who never use credit cards often have plenty of money. Do you think they cast aside credit cards because they are "well off", or do you suppose they are "well off" because they never use credit cards? Anyone who runs up (and carries) a credit card balance has to send free gifts (interest) to the bankers every month. Combined with other loans (college loans, mortgage, car loans), that "monthly waste" could add up to quite a sum. $1,000 a month (or $12,000 a year) in interest adds up real fast!

Some of the more affluent among my readers might ask, "Debt Slavery doesn't matter to me. I can afford everything I want." To that I would respond that "money doesn't grow on trees". If you are making $100,000 a year, you are probably in a harder job, or at least a higher-stress job, than someone making much less. When a company pays well, it expects a lot in return. If John can live debt free on a $30,000 salary, Tim must be foolish to waste so much of a $100,000 salary considering that Tim puts up with more, is responsible for more, stresses out more, and is dependent on a "booming economy" much more than John.

My point is, if you are going to work extra hard at a high-responsibility or high-stress job, you should at least get to enjoy the fruits of it. You should live much better than a debt-free person making 1/4 your salary. How many people seek out such stressful jobs only because they pay well and because they need
money to pay for their expensive house, student loans, and the credit cards they ran up while in college?