The 5 Worst Debt Myths That You Act As If You Believe

The 5 Worst Debt Myths That You Act As If You Believe

In this article, you will learn:

  • The real reason that you are in debt
  • The Five Debt Myths, which should really be called the Five Debt Lies

The Five Worst Debt Myths

The first task is to rid yourself of the 5 worst Debt Myths. Here they are.

MYTH #1 The Myth Of Higher Income

“If I could just make more money, I could get out of debt.”

Indeed, statistics show that the higher the income, the HIGHER is the debt. So, forget about getting out of debt by increasing your income. That does NOT work. Only lowering your expenses to LESS than your income will work. It’s like a person who is always late saying that he just needs a faster car! We all know that a faster car will not make him early. Similarly, higher income will not get you out of debt.

MYTH #2 The Myth Of Small Debt

“It’s just one small debt so it doesn’t really matter.”

Indeed, statistics show that people who believe that small debts are OK have large debt. It’s only those people who believe that any debt is terrible who actually are out of debt.

MYTH #3 The Myth Of Low Interest Rate

“Debt is OK as long as the interest rate is low or zero.”

Indeed, mathematics shows that even a reasonable interest rate will dramatically increase the cost of your purchase. A home purchased with a conventional mortgage at reasonable interest rates and eventually paid off will cost the unfortunate homeowner about TWICE the original purchase price of the home. Why would you willingly pay a half-million dollars for a $250,000 home? Of course, I am not saying that you should pay all-cash for your home. But, I am saying that, if you have no other debt, then you can pay down your mortgage very fast, likely in 10 years instead of 30 years.

MYTH #4 The Myth Of Inflation

“My debt is OK as long as inflation will bail me out later.”

Indeed, reality shows that though the property may well go up substantially over the years, you may not be able to survive financially during those years and may need to force-sell your home in the meantime, without enjoying the benefits of that inflation.

MYTH #5 The Myth Of Entitlement

“It’s OK to get into debt for this purchase because I deserve it. You only live once!”

Indeed, only those who are in debt say such things. Those who are not in debt wait till they have the cash before they buy anything, even if they really want it.

Identify the Myth that you “act as if you believe”. Then, eliminate by creating the antidote statement. For example, if you act as if you believe that small extra expenses are OK, then say to yourself “every additional extra expense is poison”.

I invite your comments below on these (and other) “debt myths” – how are they ruining your life?

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