I am a 45 year old executive with a consumer goods company that I have been employed with for over 20 years. I have experienced significant changes over those 20 years, such as technology, consumer trends and most recently economic challenges that virtually affect every person in the world in some form or capacity.
The world continues to pull itself from one of the most challenging times in recent history. While I believe that we as a society will overcome this global depression, the question remains, how did we get to this point, and most importantly, how do we prevent it from happening again?
What led us to this economic slump, and for some people and businesses, economic catastrophe? Greed is definitely a factor in today’s hard times. As a society we have become engrossed in the “desire to acquire” without any regard for the necessary means to support such desires. How much is too much? We’ve become a society of confusing the core necessities of life with the desires of life, and take any steps necessary to acquire such things that have little impact to basic survival. Accumulating debt to drive a BMW or purchase a vacation home in Hawaii is not a necessity for survival, yet as consumers, we are drawn into believing that it is ok as long as the bank thinks it is ok.
We’ve become addicted to over-inflated lifestyles and there will come a time when we have to be detoxified from our addictions – always a difficult experience in all definitions of fighting an addition. The recent news of 800 billion dollar bailouts can be considered as a necessity to help save our economy, or could it be considered more fuel to feed the addiction? Much of the bailout funding was to enable the banks to begin loaning money again. Is this a good solution to one of the core problems? At what point do we pay off our debt? Comparing to other addictions – the alcoholic must stop drinking, the drug addict must stop taking drugs, the gambler must stop gambling. Consumers need to stop borrowing.
The next time you have the urge to pull out your credit card to purchase a flat screen TV with no-interest for 18 months, ask yourself, do I really need this item, do I really need to borrow this money? At some point we all have to pay our debt….maybe now is the time.
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What burns me is that if you have NO debt, that actually lowers your credit rating! And now that I'm trying to refinance my mortgage, my credit rating is only considered "Good" because there is not enough on it.
ReplyDeleteYou know what the advice is? Put a few thousand on my home equity line, pay interest to the bank for 6-8 months so that I can raise my credit score enough to knock 1/2 point of the interest rate. How ridiculous.