Having debt is like committing yourself to get robbed of future resources that could have been yours in exchange for today's short term solution to a short term problem. The usual low hanging luxuries like travel and items that depreciate in value are the most common cited reasons by people I counseled.
Let's say you're ok with paying the principal and interest over the course of X years. This car worth 900,000 looks expensive right? understandable, dealer offers you 1,200,000 for it instead but paid at a later date. Great, you got yourself a bargain. The 300,000 pain didn't exist yet because that stuff is something that's going to be draining them in the future in small installments.
Those small installments are going to chip away at your budget because inflation + taxes are never going away and they eat up your future purchasing power. You signed up to that indenture where you offer up your future resources.
It never occurred to me how bad, amazing, and complex our modern financial system is until I just read more about money. Whoever controls debt has power. And on a macroeconomic scale, countries borrow money from other countries and these in turn have lobbied interest slipped between the deals.
With debt, it's not just the numerical amount but the intangible and psychological impact of being owed to or owing someone else. Because it doesn't stop with just having the debt exist between both parties, other 3rd parties who are aware about the debt and watch how it plays out give you credit scores.
I don't think debt is all bad as long as you know how to use it to make more money and the interest is manageable.
When I read stuff about how you can make debt work for you, I think this is the stuff that isn't really feasible until the person reading has access to a large capital or asset then someone guiding them through the process. When wealthy folks do it, they don't need to mind the legwork when they can pay accountants and lawyers to do it. Get a loan to buy assets that generate you money more than the interest you pay for the loan.
The inconvenient truth is that not everyone has the resources of making use of this wisdom. It's like telling everyone just learn to code when AI threatens your jobs, not everyone is suited to be a programmer or going to get hired. The advice is great, but only works for a few people that have the means to pull it off.
Everyone will own some form of debt from someone else. Sometimes it just exists in the future and hasn't yet been written like the amount of rent and utilities bill one pays to their landlord when the monthly dues come in. You don't know the exact amount, you just know you're going to pay for it.
Thanks for your time.
