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If you could live without debt, would you want to?

May 16, 2009

To me there are 3 types of debtors.

The discontented debtor. You are gripped by credit card and hire purchase debt. You have a thousand reasons to be discontent with what you have. You are easily swayed by advertising and changing lifestyles. You like the availability of easy credit. You’re happy to buy a TV set at $30 a month for the next 9 years.

The opportunist debtor. You are gripped by overdraft and term loans. You are a believer of the OPM principle (use other people’s money to make a profit). You might be a punter who borrows at 3% interest, invests at 5% return and hope to keep 2% after settling the debt. You may be a heavy “contra” player. 8 out of 10 calls you make are calls to your broker.

The survivalist debtor. You are gripped by long-term debt like housing loans, study loans and life insurance. You want a place to call your own, you need a diploma to get job, and you want a safety net in case something happens. You know all these takes years to acquire so you decide to bring them forward by accepting a tradeoff – debt. Its a gamble but you hope everything will turn out the way you planned.

Notice the common thread in all these types of debt? Discontentment. Now discontentment is not always a bad word. If your edcuation level sucks and you’re constantly being screwed by others with a degree, you decide to enroll in an MBA course. That’s a good thing, right?

And to be completely unbiased about it, some people have gone into debt and come out of it smiling. So I won’t go so far as to say that debt is completely bad, IF you know how to manage your finances.

But debt is a choice so the thing to ask is, is it possible to live happily WIHOUT debt?

And if there was a way, would you want to?

You know what that means. Giving up your creature comforts until such time when you’re able to afford them in cash.

8 Comments leave one →
  1. LC Teh permalink
    May 16, 2009 11:41 am


  2. LC Teh permalink
    May 16, 2009 12:04 pm

    Oops! I forgot, I do have some debts.

    The car that I didn’t buy with cash because the interest rate then was almost equal with the FD rate. And I figured I should reserve the money for emergencies, or the holiday which we wanted to take.

    Then, to digress a little, there are the debts of gratitude which I’ll never get to pay. The people I owe may have written them off, but I haven’t.

    So, I would put it this way, it’s not possible to live without debt somehow, but we still can live happily in spite of it.

    Haha, great answer! How to handle debt and live happily in spite of it. Sounds like a great book title if u know what I mean. πŸ™‚

  3. May 16, 2009 5:14 pm

    If I could live without debt, would I want to?
    The answer would of course be a definite YES, but the sad reality is: I couldn’t live without one, or a few. 😦

    Debt for education : to fund for a better future so that the amount of debt incurred in the future (below) can be reduced.
    Debt for a home : to get a place to live in before it costs even more in the future
    Debt for a car : to reduce the time wasted on unnecessary, so that I could focus my time to other better money making activities..

    Hi Marvin, thanks for dropping by. πŸ™‚ Yes, if we wished to live like a “normal” member of society, we may not have much of a choice but to get into debt. There are of course people who sidestep this by choosing not to live like a normal member of society. For example some become monks (they cannot handle money or own property) and some retreat to the outback to live off the land. There’s no need to borrow any money where they’re going.

    There is a price to pay for every choice we make. To live the way our family and friends want us to live, debt seems to be that price.

  4. May 16, 2009 7:57 pm

    Haha! I have been living without financial debts for the past 3 years after my car installment have finished. I pay my credit card purchase in full every month. (I dislike owing if I can afford). However in spite of that “living without debt” still I am not a happy person, I am a living proof this.
    Sometimes I tell m friends, “You knew you can afford to pay that’s why you all take loan”. I don’t owe because I can’t afford to pay back.

    If you took out a car loan and still use your credit cards, then you have used the “system” to get where you are. And without a car, you might be even less happy than you are today. I think we all live in a society that actually requires us to be in financial debt to keep up with it and to maintain our identities. We don’t have the strength to give that up and break away.

  5. May 16, 2009 8:00 pm

    Maybe there are more to life that ” without debts”. ^_^ and this is the basis i am drawn to spirituality

    To me, debt is just one obstacle among many to peace of mind. IMHO peace of mind is a by-product of spirituality. Its end goal is a lot higher.

  6. May 17, 2009 7:01 pm

    mmm…sometimes i do wonder, why do people hate debts so much. πŸ™‚ of coz its good not to have debts, but the main question here is …can the person REMAIN tat way? some people want to get rid of the current debts so that they can take on MORE debts. for example, after buying a Honda and suffering a lot trying to pay for it…the debt finally settled, but this fella goes and buys a BIGGER car and ends up in another debt.

    some ppl wanna b debt free, so that they can have more money to buy other stuff…or to achieve financial freedom.

    all for 1 reason – to be happier.

    conclusion, i would love to think that debt itself is not all that bad if u know what is it that makes u happy (provided that u can survive). it is the reason why ppl get into debt…or the reason why ppl wanna get out of debt which matters.

    Yup, you can’t escape debt in this society. Lots of businesses adopt a use first, pay later concept like your water, electricity and phone company. Technically you are already in debt the moment you use your phone or turn on the lights. You get the IOU at the end of the month. So if we have to get into debt, do it wisely. My personal formula is to cap one’s debt repayments to no more than 20% of net income.

  7. May 25, 2009 12:05 pm

    The opportunist debtor will suit me best.. Malaysian school should teach children “Money Management” when they were young..

    Would young minds be able to grasp the concept of money though. The younger the are, the more difficult it might get.


  1. If you could live without debt, would you wantΒ to? | Live Well With Bad Credit

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