POWER DOWN YOUR DEBT (3)
by adminWithout fear and respect for money, our current generation is sinking
itself into greater debt enslavement by its “gotta-have-it-now” attitude. In 1998, consumer credit as a ratio to after-tax income reached 21 percent in the U.S., the highest on record.7 The average American now has 11 credit cards, up from seven in 1989. And the number of credit cards in circulation increased 34 percent between 1988 and 1994, the number of transactions increased 55 percent, and the overall value of credit card transactions increased 98 percent.8 James Clayton, again, makes a very stark observation
about this level of debt: “Americans, who invented the shopping mall and the credit card, believe they deserve more than they have. So why shouldn’t they continue to prosper even if they do not earn it.”9
Debt penetrates every part of our lives, with the potential of ruining far more than just our credit ratings; it can break up marriages and destroy future financial happiness. This indebtedness, naturally, is counter to the principles we have already taught about getting spending under control so that you can save for the future. And it eliminates any possibility of preparing for the emotional, emergency, and retirement events we mentioned in the last chapter.
To better see the negative effect that debt and its accompanying compound interest can have, let’s review the case of Mark and Joyce, the couple we profiled in the introduction. Take a look at Mark and Joyce’s “Real Debt Report,” which was created using Money Mastery’s Master Plan software:
Taken from : Money Mastery “10 Principles That Will Change
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