Winning the Money Battle

I attended a lecture the other night about how to keep your head above water when it comes to managing your financial picture. The presenter was Adam Carroll. I enjoyed this presentation a lot. Adam was a great speaker and made it easy to understand. The main premise of the lecture was to stay out of debt. He told us that credit card companies and insurance companies want us to be in debt. They make most of their profits off customers that are in debt over their heads. What he suggested was a way for us to, in a way, be our own bank and borrow money from ourselves. At first this seemed sort of backwards, but he went on to explain how this can be done. One thing he suggested was when we graduate (assuming we do) continue to live like a college student at first. Basically, the big mistake that gets people into debt is spending money that they don't have yet. A 22 year old that just graduated and has a starting salary of let's say $50,000 will likely go out and buy a car, rent an apartment and live the life that he or she has been looking forward to. The problem is, if that money train ever stops producing for you, you have a huge problem. Monthly payments that can't be made, borrowing from Peter to pay Paul, it has the potential to begin a downward spiraling vicious cycle for the rest of your life. Instead, if that college graduate lived with their parents for a year or two, ate cheap food they would be able to wipe away most of their student debt as well as save money to be used later on to "borrow from". This concept is very interesting and I buy into it completely. One thing Adam said that I had a hard time stomaching was "If I can eat it, wear it, or drink it, it does not go on plastic." He said that all of these things are consumable products. Once you eat something, drink it, or wear it, it no longer is an asset to you and that money can't be shown for. I like the idea of assets can be bought on credit but consumable products cannot, it is just a difficult rule to live by.

I thoroughly enjoyed this lecture and am glad to have attended it. Adam seems like a smart person to follow and I plan on doing that.