Neighbor Wealth

What is the real problem with our financial sector? The thing that bothers me the most, about the bail out and all of these programs designed to get our economy going, is that we are so determined to return to the system that just failed!

We as a society have this mindset of borrowing. We want bright shiny new cars and we want them now! We want big fancy houses and we want them now! Everything you want is the matter of a credit card swipe away, assuming you have good credit.

Is it really necessary to have an unsecured debt of 50,000 or 100,000 dollars? Is it really necessary to have an unsecured debt of 5,000?

This may not be a bad thing, or is it? Our desire to have things and have them right away drove the world’s economy! On the other hand, our access to ridiculous lines of credit brought the world’s economy to its knees! The media is focused on the mortgage industry, but the credit card industry is just as much to blame.

Word net defines addiction as, “being abnormally tolerant to and dependent on something that is psychologically or physically habit-forming. “ Could we be abnormally tolerant of credit card use and borrowing?

Let’s look at the evidence. Almost everyone has a credit card. The credit card industry targets young adults because they know the rest of the market is saturated. If you get in over your head with a credit card, the system is designed to continue to give you credit only at a higher rate. This results in a tighter constraint on your cash flow, so you use more credit to continue your existing life style. This continues until you crash!

Most addicts do not admit that there is a problem until they have hit rock bottom. Have we hit rock bottom? Is the pain strong enough for us to stop? Are you ready for a life that is free from consumer debt?

I think the solution to our economic problem is simple, but it may not be easy. The solution begins with you! You can make a difference by changing your behavior. Our consumerism drives our economy. If we stop agreeing to ridiculous interest rates then the industry will stop pushing them. The only reason there are loans out there with any rate at all is because people are willing to use them. Don’t agree to high interest rates.

You should really sit down and do some math for any loan with an interest rate over 10%. Search on line for a debt calculator and figure out how much in interest you will pay over the life of the loan. Is that item worth it? If you purchased a car will you be upside down on the loan in 6 months because most of your payments are going to interest instead of to the car payment.

If you are having difficulty getting a loan, or the only loans you can get are a high interest rate then you may want to consider another option. Don’t look at your inability to get credit as a problem, see it as a blessing. See it as an opportunity to find another way to purchase whatever it is you are about to buy on credit. Once you begin freeing up your financial life, you will also begin freeing up the rest of your life!

My Dad called the other day. He was just calling to check in with me, but he had no idea the impact of our conversation. He knows of my work with NeighborWealth. In fact I called him about a year ago and we talked about my ideas on how to help as many people as possible eliminate their debt.

Originally I had developed a pay it forward type of a system using PayPal. I thought that if I had enough people agree, we could generate enough money working together to help on another pay off debt. Dad agreed to sign up for a PayPal account so that I could test my system. It really didn’t work out for various reasons, and that was OK though because it was only a test.

Like I said, my Dad called today. He called and was excited because he started a new job that would bring in extra money allowing him to pay off his credit cards. He said he was going to call each credit card and tell them that he would no longer pay their existing interest rate and they had the choice of lowering the interest rate or losing him as a customer. He also jokingly said, “I probably have a bunch of money in my PayPal account from that thing you were working on last year!”

This conversation opened a huge realization for me. My Dad had no idea that I was continuing to work on NeighborWealth. The whole thing was to synchronistic for me to be written off as a coincidence.

I was pretty excited about my conversation with my Dad and what had happened. I told my wife about the experience at lunch and it occurred to me that my Dad was making a statement regarding his credit cards. He wanted to stand in his own power regarding his finances! He wanted to take his power back from the credit industry!

This is very representative of where many people are at this point in history. We are experiencing a contraction in our economy driven by the credit industry failure. Our government is bailing out financial institutions who routinely apply unethical practices to the consumer, a.k.a the tax payer! People are sick of paying high interest rates and getting hit with late payments and sneaky fees. My Dad helped me realize that we are ready to stand in our own power. We are ready to take our power back from the credit card industry and the mortgage industry!

What is the real problem with our financial sector? The thing that bothers me the most, about the bail out and all of these programs designed to get our economy going, is that we are so determined to return to the system that just failed!

We as a society have this mindset of borrowing. We want bright shiny new cars and we want them now! We want big fancy houses and we want them now! Everything you want is the matter of a credit card swipe away, assuming you have good credit.

Is it really necessary to have an unsecured debt of 50,000 or 100,000 dollars? Is it really necessary to have an unsecured debt of 5,000?

This may not be a bad thing, or is it? Our desire to have things and have them right away drove the world’s economy! On the other hand, our access to ridiculous lines of credit brought the world’s economy to its knees! The media is focused on the mortgage industry, but the credit card industry is just as much to blame.

Word net defines addiction as, “being abnormally tolerant to and dependent on something that is psychologically or physically habit-forming. “ Could we be abnormally tolerant of credit card use and borrowing?

Let’s look at the evidence. Almost everyone has a credit card. The credit card industry targets young adults because they know the rest of the market is saturated. If you get in over your head with a credit card, the system is designed to continue to give you credit only at a higher rate. This results in a tighter constraint on your cash flow, so you use more credit to continue your existing life style. This continues until you crash!

Most addicts do not admit that there is a problem until they have hit rock bottom. Have we hit rock bottom? Is the pain strong enough for us to stop? Are you ready for a life that is free from consumer debt?

I think the solution to our economic problem is simple, but it may not be easy. The solution begins with you! You can make a difference by changing your behavior. Our consumerism drives our economy. If we stop agreeing to ridiculous interest rates then the industry will stop pushing them. The only reason there are loans out there with any rate at all is because people are willing to use them. Don’t agree to high interest rates.

You should really sit down and do some math for any loan with an interest rate over 10%. Search on line for a debt calculator and figure out how much in interest you will pay over the life of the loan. Is that item worth it? If you purchased a car will you be upside down on the loan in 6 months because most of your payments are going to interest instead of to the car payment.

If you are having difficulty getting a loan, or the only loans you can get are a high interest rate then you may want to consider another option. Don’t look at your inability to get credit as a problem, see it as a blessing. See it as an opportunity to find another way to purchase whatever it is you are about to buy on credit. Once you begin freeing up your financial life, you will also begin freeing up the rest of your life!