“Buy Now, Pay Later!”
This is a huge money myth that seems true, because it is so big and pervasive. The real truth about this belief system is that it is designed to create perpetual consumers! The truth is really pay now and pay later. First you pay by subtly extending your indentured servanthood another three years, five years, or in the case of a mortgage, 30 years.
The same competitive system that is most likely your employer is part of the same competitive system that loans you the money to buy the house. The banking system loans you the money as long as you stay on the job (you have to show them your W-2, right), and “the job” keeps you in the workforce, and by keeping you in the workforce the banking industry gets to make the interest. You actually end up paying now, and paying later.
Do you ever own the home? Maybe, but then there are property taxes to pay that are ever increasing, and they are never paid off. So now you are working for the bank, the labor market, and the government. You are paying, paying, paying, and you are investing in someone else’s bottom line. With buy-now,-pay-later credit cards the interest rate is often more than the original purchase. With a car purchase, you pay hundreds of dollars a month for years in interest and additional car insurance. Once the car gets paid off in say, five years, the car wears out and you have to buy a new one. So you never own it, you are paying now and paying later. The truth it is quite rare that anyone ever gets around to really buying and truly owning!
SOLUTION: Be your own bank.
This is as simple as saving up and buying with cash. One small example: I bought my last car with cash. Granted, it was seven years old, but it was a luxury vehicle with only one owner in immaculate condition. I saved $225 a month in car insurance and in interest. That money (not a business loan) has been invested in my writing business because that is $225 that I do not have to earn each month, adding up to $2,700 a year back in my pocket. This is the equivalent of $13,500 over five years that I have been driving the car. In fact, it is effectively more than that, because to clear that $225, I would have to make $400 to cover taxes, gas, commute time, lunches, dry cleaning, and other expenses of going to work to earn that amount. Assuming I would make about $15/hr in the “job market,” I therefore freed up 30 hours a month (assuming I invest the time freed up as opposed to spending the extra $4,800 per year) to invest in my writing business. This is because I banked the money to buy my automobile with cash. So as my own banker, I have invested $24,000 into my small online businesses without having to borrow that money, pay interest on it, or pay it back. Be your own bank. If you need help in creating a personal banking system, go to www.infinitebanking.com.
Deborah S Nelson is a guest blogger for PickTheBrain and the founder ofAuthor Your Dreams Publishing
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