Biz Development
by Laurus Nobilis

2011
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„It is easy to pay with cash if you are rich“ is the usual excuse for the people who use debts as a tool to get something. But most of the rich people were not born rich. It is more that they become rich because they earned money, spend wisely and invested carefully.

Credit makes everything that you buy even more expensive. When you buy something on credit, you pay not only the product, but the bank interest too. The longer payment period requires higher bank interest. It is absolute lie that credits improve the living standard.

The only thing that you get is the illusion that you are progressing in your life. You buy the car, TV or trip. But in reality you do not make progress in your life but you are moving backwards, since you are draining yourself financially by spending money that you didn't earned yet. On top of this you pay the bank interest.

The bitterness of buying with use of debts comes much later. For some people it takes a lot of time to understand this negative concept. Some people do never understand that buying on credit is not the solution.

If you buy on credit you spend more money since you are paying more, due to bank interest. Also you are potentially buying things that you do not actually need. Also, buying things impulsively you make yourself to buy every new thing that you see. Of course, novelty is usually more expensive than the regular product. On the other side, if you save your investment and choose your product wisely you are having the opportunity to buy the product without the bank interest. Also you have the chance to think more clearly about your real needs. This prevents you to buy things that you actually do not need, but you are tempted by the aggressive advertisement. Finally, if you wait and think, the product may be already discounted.

If you are earning $50.000 and the bank offers you the credit card with $10.000 limit, you get the illusion that you have $60.000 at your disposal. But you may exhaust the credit limit and there goes your credit limit. But the debt and the bank interest stay. What will be your next step? Another credit card?

Sooner that you realize that debt is not your friend, that's better. If you are spending 120% of your earning than it is likely that soon you will be spending 50% of your earning, since bank is taking you the rest. Instead, save and spend wisely. Personal finance is not the sprint but the marathon, where endurance prevail, not the speed.