Some Definitions:
Debt – something, typically money, that is owed or due. OR the state of owing money.
Own/Ownership – have (something) as one’s own; possess. OR the act, state, or right of possessing something.
Metaphor – a figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable.
Congratulations, you just bought a home! Or, did you? More like the bank bought it and you are “renting to own”. I struggle with the textbook definition of being an “owner” because possession is equated with ownership. Just because I am driving around a rental car (aka possessing it) doesn’t mean I own, because I don’t. But the same could be said of most automobiles; the driver may be a part owner, but it’s the bank who really owns it. Ownership implies not just possession, but the exclusive right to something. And if a payment is involved, you are only one missed payment away from losing it – so do you really own it? As we look at our collective lives, we notice we own very few valuable things.
Describing Debt in Metaphors:
Treadmill – When I am on a treadmill, I want to get off. But I set a goal (and timer) and keep going until I hit it. But as soon my workout is complete, I am off the treadmill. But what if you couldn’t get off that easily? In the treadmill of debt, there is no emergency stop or pause button – there isn’t even a “free” decrease incline or decrease speed button. Every little bit of debt you take on increases the speed and incline, and the only way to reduce either is by paying the interest plus something additional. Just as it is hard to adjust a treadmill when you are running at 8mph with a 5% incline, so is paying off lots of debt. It’s possible, but it takes extra work, cutting unnecessary expenses, and doing that for a while.
Leeches – I heard this metaphor on JL Collins NH financial blog, and really like it. Imagine being covered in leeches as you trudge through a swamp. That is what debt is like. It’s a struggle to succeed at life already; don’t make things harder on yourself.
Given these rosy pictures, one should stay away stay away from debt. And if you have to have some debt (a first mortgage on a reasonable home, or a loan on a basic car to get you to and from work), you should keep it as tiny as possible and pay it off fast!