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EL PASO (KDBC) — A decision from the nation's highest court is stirring debate in the Borderland over women's rights.
In a 5-4 ruling issued Monday, the Supreme Court decided some for-profit companies should not be forced to cover certain types of birth control for their employees if it goes against the corporation's religious beliefs.
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Hobby Lobby has two El Paso locations and one in Las Cruces.
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"I'm not sure where it stops," said Lyda Ness-Garcia. "You (as a company owner) could be a Jehovah's Witness and decide you don't want to cover blood transfusions, you could decide not to cover vaccinations. Scientologists could decide not to cover anti-depressants."
But anti-abortion group Texas Right to Life praised the ruling, calling it a win for religious freedom and companies' rights.
"Today is a critical victory for the Pro-Life movement," the group said in a statement. "Since President Obama's pro-abortion administration defined...drugs like Plan B as 'contraception' in the (ACA) mandate, this challenge was necessary."
Monday's decision seemed to be split along political ideologies with the justices appointed by Republican presidents siding with Hobby Lobby.


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How to Have More Money
Published on - February 13th, 2012 (Modified on - February 14th, 2012) (by J.D. Roth)
This is a guest post from Jerrold Mundis, author of the classic How to Get Out of Debt, Stay Out of Debt, and Live Prosperously [here's my review]. Mundis is a writer and financial therapist. The final book in his trilogy on personal money is Making Peace with Money. His website is Mundis Money.
You can have more money. And you can have it — get it — without turning your life upside down or driving yourself nuts. Seriously.
I got it that way, quietly, simply, and still am. You can, too. Maybe only a modest amount more, maybe a lot more. I don't know. But I do know that you can have more. I'm not doing anything so far as concept and technique go that you can't either. I just work the simple little four-point program that follows. You're welcome to it.
Here's what I do — and don't do.
Never incur new unsecured debt
I don't debt and haven't for 28 years now.
I know: using debt as a verb is unlovely. But it helps to distinguish that act from other uses of money, to be clear about what is actually being done — not spending, buying, enjoying, but: going into debt.
Readers of Get Rich Slowly and other personal finance blogs almost certainly know that using unsecured credit is a bad idea. But I'll tell you: It's more than a bad idea. It's a catastrophe. If any single thing can crush, break, and poison a life, kill anything of value or pleasure in it, it's unsecured debt, the sustained and mounting pressure of it over months, years, and even decades.
In his play A Doll's House, Henrik Ibsen wrote more than 130 years ago, "There can be no freedom or beauty about a home life that depends on borrowing or debt."
True. I've never seen anyone for whom it isn't.
By the time I bottomed out on debt myself, way back in 1984, my marriage was over, my books were out of print, and my life shattered. I was waking up every morning with ground-glass in my stomach thinking, "Oh God, there's another bill coming in!" without any idea how I would ever be able to pay it. I was living in near constant pain and despair.
I was $113,000 in unsecured debt then (in today's dollars), had expenses of $3,000 a month and a guaranteed income of only $350 a month. It was clear, finally — made brutally clear to me by the misery, the anguish even — that this could not go on. So I stopped debting, cold turkey. Because I had to. Because I knew there was no other hope for me.
From that day in March of 1984 on, I did everything and anything I had to in order not to go one single dollar deeper into unsecured debt:
- I sold things I owned.
- I gave up my apartment and moved in with a friend.
- I cut expenses to the bone, then cut into the bone.
- I said yes not only to whatever kind of new literary or teaching work I could find, no matter how little it paid, but to any work.
Slowly, slowly, things began to get better.
It was out of that bottom and my recovery from it, out of not-debting, eventually paying off all that unsecured debt, and becoming free that I wrote my first book on personal money, How to Get Out of Debt, Stay Out of Debt, and Live Prosperously. It was the first book ever on that subject, to my best knowledge, and it's been in continuous print since 1988 (updated and expanded in 2003).
Now your circumstances may not be anywhere near as dire as mine were (at least I hope they aren't), but the fact remains: You cannot get out of debt by going deeper into it. Nor will you be able to bring more money into your life — at least permanently, steadily — until you stop incurring any new unsecured debt. At best, that kind of debt will just continue to siphon money out of your life, relentlessly, and will be a nearly impenetrable barrier toward bringing more of it in. More that's yours to keep
So unless you can claim that you genuinely live free of any amount — any amount — for, say, at least 40 weeks out of every year (an only partly arbitrary number) . . . stop debting. Right now.
Understand that all economies are personal
Everyone — you, I, and everyone else — has his or her own personal economy, which is separate and apart from the national economy. In fact, so far as bringing more money into your life goes, the larger economy is mostly irrelevant.
Some people have a hard time wrapping their minds around this. I certainly did.
During most of the booming 1980s, when money was washing back and forth through the economy in great tidal waves and Americans were prospering as they rarely had before, I was making very little money. This wasn't because of any technological, social, or other kind of upheaval that had disoriented me. I could argue for that (in my own case the rise of video and cable TV, computers, changes in the publishing industry, a shrinking literacy rate, a blow to my personal life), but it would be a specious argument, mostly a function of denial.
Weren't there some real reasons? Of course, but they came and went and I was still engaged in what I have since come to call underearning. And at the same time, there were other people whose backgrounds and experiences were similar to mine — who got divorced, for example, or were writers — who weren't underearning.
These days, the Banking and Real Estate Collapse of 2008/2009 remains the great ogre: the bogeyman, scapegoat, and whipping boy of the moment, blamed by many for the fact that they're in debt or can't get ahead much. (Before the Collapse of 2008/2009 it was the Dot.com Crash of 2000/2002; before that, the Recession of the 1990s; before that . . . .) In some cases, it's true; those events and their aftermaths did preclude some people, some few, from any chance of bringing in more money. But consider: In the very midst of those booming 1980s, more than 20 million Americans, from all classes, backgrounds, and walks of life found themselves overwhelmed by personal debt. And this: Personal bankruptcy climbed by 300 percent during those prosperous years to nearly 1 million people a year by the end of the decade.
On the other hand, at the height of Recession of the 1990s, and during the first full twelve-month period in which I practiced this simple system, along with a few supporting concepts and techniques, I brought in more money than I ever had in any other year of my life, significantly more. And that same thing is true — at the very least, some kind of increase — of everyone I have ever worked with or known who has employed this system. What I and they have had in common, in addition to the other three parts of this system, is that we recognize (or, some might argue, choose to see) that all economies are personal, even when the macro economy is struggling or in a serious downturn.
There is no denying that the larger economy does have an impact, but the most it can generally dictate, barring complete collapse, is the manner in which you earn your living and otherwise bring in money, not whether you can. Your economy is personal.
To diversify means to spread over several areas, to introduce variety. It's a time-honored financial principle. Corporations do it by entering multiple arenas of activity or making different kinds of products. Investors do it by buying several stocks instead of just one. The primary advantage of diversifying is that it minimizes the risk of loss. Basically it's a practical application of the old saw, "Don't put all your eggs in one basket."
Diversifying in your life — your earning life, your money-getting life — can give you the same advantage: minimize the damage you might otherwise sustain in a setback such as being laid off or losing a client, generate new opportunities for you and maximize your ability to take advantage of them.
If one definition of insanity is to keep doing the same thing over and over and expect different results, another is to keep doing over and over again something that used to work, after the context has changed, and expect it still to work.
That's what I had been doing. My first step in stopping this was to admit to myself that what I had been doing — writing novels, and in a particular way (selling them before I wrote them, in proposal form) — was no longer working, wasn't bringing in enough to meet my needs. Once it had, but now it wasn't. What follows is a distilled version of how I initially diversified, back in the late 1980s and early 1990s.
First, I asked: "Where does the problem lie — me, my agent, or the changes that have taken place in publishing?"
The answer, I decided, was in all three.
The solution: change agents, alter my own activities. (There was nothing I could do about publishing, which is a monolith.)
I changed agents.
It was in changing my activities that I diversified.
I began to write for magazines again. (Which I hadn't done in nearly a dozen years.) The money wasn't such that it offered a long-term solution, but the cash was helpful in the short run.
In books, I turned to nonfiction, drawing upon my work, research, and experience in psychology, personal transformation, and debt recovery over the past several years.
I searched myself for other marketable skills I might have. (My resume said: "Mr. Mundis has been a novelist for 20 years." I looked in the paper; there wasn't much corporate call for novelists.)
Editing, I decided. That was a skill I possessed. So I became willing to go into an office for a while. (Here I discovered that I had an ego-investment in never having worked for anyone else, and had to overcome that). But though I was now willing, who would hire me? I had never worked as an editor in my life. In fact, except for a few months right out of college, I had never worked for anyone in any capacity. But I went ahead anyway, made phone calls, sent letters — and ended up as a feature editor at The New York Times, where I stayed for a year and a half.
I also knew more about overcoming writer's block than anyone I'd ever met or whose work I'd ever read. Because of my own difficulties with block, I'd had to develop and employ a variety of means over the years to render it harmless. So I put together a consultation session that would break writer's block for anyone, forever, in a single afternoon, and establish for them a productive and reliable working schedule. The first year, that consulting brought in 15 percent of my gross income.
Next, I adapted the block-breaking material into a day-long seminar designed to reinvigorate corporate staff writers who were burned out, and took that seminar into corporations and professional associations.
Then, staying with nonfiction, I wrote a book which presented step-by-step the program I used in breaking writer's block.
Shortly after, one of my block-breaking clients, a writer and television producer, became involved with a project for cable television and asked me to join him as a writer. I did, for six months.
I also developed a series of workshops on debt-recovery and other aspects of handling money in a positive way, which I presented for corporations, private institutions, and community groups in various parts of the country. . . . .
Now, at this writing, I'm busy scanning some dozen and a half of my out-of-print novels and nonfiction books, converting them into Word documents and formatting them for self-publication as eBooks for Kindle and Nook, and on Smashwords for iPad and other readers.
After that, well, I don't yet. There'll be something.
Diversification, then, is a process in which you identify the skills and abilities you possess in addition to those you use in your main occupation — or further ways to apply those you already do use there — and then find avenues through which to turn them into income-producing activities.
Craig, for example, a high-school teacher in Minnesota, an avid fisherman and outdoorsman, diversified by guiding parties of vacationers on fishing trips, later by creating a small business out of repairing and reconditioning antique fishing tackle and boats, and still later by making custom bamboo fly rods to order. My friend Judy Collins, the Grammy winning singer, songwriter, and author, created her own recording company, Wildflower Records, and has signed several artists to it in addition to maintaining her own demanding concert schedule.
If you're already working fulltime, you can undertake diversification as something you do an evening or two a week or on a Saturday morning or afternoon, whatever fits your life. I'm not suggesting that you simply work more hours each week: the key is to be sure that your diversifying activities are high-paying — in the sense that they bring you, ideally, at least twenty-five percent more per hour than you make at your job or normal work.
It was out of my desire — and in my case, need — to bring in more, that I ended up writing my second book on personal money, Earn What You Deserve: How to Stop Underearning and Start Thriving.
Finally . . .
Conduct a brief nightly review
I did this each night for several months when I first started to work this system. I have done it again at different intervals over the following years. And I have recently undertaken it anew. Here is how I do it.
In bed, just before going to sleep, I review the day in this manner:
- What two or three actions did I take with money or around money that were the most helpful to me in handling it well and bringing more of it in? These might be anything from having put in a solid day's writing to promoting a workshop, answering business email, or just simply checking my account balances and transactions online.
- Then I look for the two or three actions I took (or failed to take) that were the weakest with money or maybe even damaging to me in handling it well and bringing more of it in. Maybe I quoted too low a price for doing a piece of work, put off responding to a voicemail from someone inquiring about coaching, or simply didn't clear my desktop at the end of the day so it would be clean and efficient for me the next morning.
With the latter, the weakest actions, I don't criticize myself for them but simply recognize them for what they were and use the recognition to inform and help myself in making choice and taking action in the days to come. With the former, the things I did well, I just note them, acknowledge them, then file them away someplace in in my mind where at one level or another they remain useful to me as future referents.
Few other practices will make you as quickly and vividly aware of your blind spots, oversights, and weaknesses around money as this one, of the impediments you create to bringing more of it in, and maybe even of your underearning if you have a touch or more of that.
The first month I employed it was a revelation to me. I found myself nearly on a daily basis negotiating doggedly for less than I needed, turning down money, spending time on projects and busy-work that would bring in little or no income, and underearning in other ways. Today, all these years later, while my life with money has improved profoundly and continues to, I am still amazed on occasion, when I return to this practice after a period of neglect, to discover that I have been drifting back unawares toward some of the same places again.
The bottom line
You can, as I said in the very beginning, have more money in your life. You can have it — get it — quietly and simply, without turning your life upside down or driving yourself nuts. No matter who you are or what the circumstances of your life. You can have it by practicing this system.
To review, simply:
- Don't incur any new unsecured debt, ever — in way, in any amount, for any reason.
- Understand that all economies are personal.
- Diversify.
- Conduct a brief nightly review.
Doubtless there are other effective ways to go about this. There have to be. But this is one that I know works, and it's simple and easy to execute.
I wish you every happiness and success in doing so.
Thanks for bringing up diversifying income — we normally just hear about diversifying in the context of investments, but it's wise strategy for money coming in as well. To me, one of the big upsides of the way I've built my career (freelance writing) is that I have seen almost all my clients change over but I still keep earning, and without anything close to the disruption losing a "normal" job would entail. I think a growing number of us are living in this 1099 economy (rather than the W2 economy) and it changes your perspective. You can earn more with more effort, so clipping coupons doesn't have to be the first financial advice you follow.
Yes. Sooner or later, I always keep in mind, I will lose every client/customer/publisher I now have. Time and the river. So a steady awareness of a need to find the new is necessary. This seems true to me of everyone who is self-employed or owns a business.
Excellent post! We've been working to diversify our income over the past year. I've been on mat. leave and have had the free time to really focus on it. My husband is just plain talented and able to do a million different things fairly well- he naturally lends himself to earning in a million different ways. I have a series about all the different ways we earn extra money: http://www.preservingpennies.blogspot.com/2012/02/how-we-earn-extra-money-selling-our.html with another post coming later this week. Might be helpful if you are looking for ideas.
Yeah, never incur new debt is a major one. I also sold many of my books after realizing that I was holding on to books I only read once (libraries are now my best friend). My emergency savings saved me recently and now I also have a $100 mini-emergency cash fund for smaller emergencies like the rare time I need to take a cab home. Oddly, the biggest thing I can do now to save/earn money is to earn my degree and move on! Great post. Thanks for sharing our story. Its good to know we are not alone in our experiences and goals.
What an excellent post, thorough and very thoughtful!
I think that a big part of handling money is having self-discipline, as well as understanding the difference between needs and wants. Alos, realizing that expenses must not exceed income. Take these actions together, and one can avoid such situations for the most part (unless caused by unforseen circumstances).
Technically, education loans are unsecured debt. There is no asset backing them, but hardly anyone would be able to go to graduate school without them. Are they verboten as well? Do you seriously believe that I am supposed to be paying cash for my masters or doing without?
Well, I got my MBA without incurring any debt. I had an employer who paid for 2 classes a year, and I took 2 to 3 classes at a time until I was finished. It may be extremely difficult to go full time without going into debt, but why do you need to go full time?
"Technically, education loans are unsecured debt."
That's kind of like saying a corpse is technically dead. Student loans *are* unsecured debt, not technically unsecured debt.
"…hardly anyone would be able to go to graduate school without them [loans: unsecured debt]. Are they verboten as well?"
Personally, I don't think anything short of mayhem, carnage, and injury in general of others is verboten.
The fact remains that the country is filled with people owing multiple tens of thousands hundreds of thousands of dollars in unpaid student debt with little to no prospect, without radical alteration in their lives of ever paying it off.
It as often as not foolish to finance an education with debt, deadly for people who have a history of carrying or having trouble with unsecured debt, and, further, not necessary.
There are a number of ways to obtain not only an undergraduate degree but also an MA and Ph.D without debting. Many people have done; many more are doing it now.
Laura has posted here for one. My friend Charlie took both his Masters, and then his Ph.D from Johns Hopkins without any family assistance, on his own resources, without debting for another.
It depends on how one wishes to live, not just now but also in the future as a consequence of now.
"Do you seriously believe that I am supposed to be paying cash for my masters or doing without?"
I have no opinion on what you should or should not be doing.
I am only interested in helping people who wish to, get free of debt and live in a state of thriving.
I agree about student loan debt:
It is unsecured… except by the wages you will earn in the future. And Uncle Sam will take his cut first and he will do so while others can walk away from their debt. It's as close as we come to indentured slavery in this century.
So if you still want to somehow legitimize student loan debt in your mind, know that smart people are asking this question: "What is the ROI on the degree?" And that is going down rapidly for just about all of them from the Associates Degree to the JD or MD.
Debt certainly is poisonous! I always save the money first. If I don't have the money, I simply don't purchase the item. In the case of vehicles, I buy used ones at the level I can afford–always for cash. Thanks for the tips!
there are two ways to have more money: don't spend much and make more — you did a great job expanding on those.
Mmm. I'm not so sure on the second one.
So Jerry, what was that "take any job, no matter the pay" strategy for?
Was that for maintaining solvency at all costs?
Some ego-deflation that was needed (in your eyes)?
Some of you teaching yourself how to work?
I ask because for many debtors, taking those sub-par jobs is the thing that puts them into the position of believing that they have to debt.
Yes, yes, one can choose not to debt one day at a time. But those choosing between paying for emergency dental work and the back rent that keeps them in their place. Well, that's a tougher-than-average decision to make. And dollars to donuts, a poorly-paying job was the ultimate cause of both.
Thanks for your thoughts on the underearning component of debting.
Such an insightful post. It's really given me a lot to think about, and I'm defeinitely going and looking for your books on personal finance.
I've been reading this blog daily for months, and have never felt compelled to comment until today. This post really spoke to me.
What appealed to me most were the nightly review questions. I've used this technique for other areas of my life, but never finances – and I need to!
I'd like to thank Mundis for sharing all of this great information.
(You also made a book sale – I just downloaded the Writers Block book.)
Thank you, Michelle!
I hope you enjoy and profit from my book on breaking writer's block, and I wish you every happiness and success with your work.
(And I'm actually startled by the number of GRS readers of my blog post who bought and downloaded this book yesterday and this morning. Seems to be a fairly deep literary undercurrent here.)
Credit Cards wouldn't be so terrible if the interest rates were lower and more reasonable. BUT, the reason why the rates ARE so high is because of credit cards, generally, being unsecured. Credit Card companies are compensated for offering a credit line by charging high interest against outstanding balances. But again, I think the rates on more credit cards should be lower, regardless of credit score.
The insidious things about credit cards has little to do with the interest rate and much more to do with the psychology of borrowing against future earnings.
Credit cards make people tend toward impulsivity and utilize lower levels of research on purchases.
There is mounting evidence that people pay far less attention to prices when they are paying with a credit card vs. paying with cash.
It is certainly true in my experience.
Loved this article, and so glad to know Judy Collins is doing well; her album "Wildflowers" was a fave back when….
Remarkably, she's still doing 40-50 out-of-town concerts a year – in addition to writing and running her company. She has more energy and commitment than most people half or even a third her age. And, to my ear anyway, her voice is still as liquid and clear as it ever was.
"I cut expenses to the bone, then cut into the bone."
Without further explanation, this overused butcher-shop analogy is meaningless.
Other than that, this is a useful article.
I think El Nerdo has pretty much covered this.
Great read! Very thought provoking, especially this part for me…
"I'm not suggesting that you simply work more hours each week: the key is to be sure that your diversifying activities are high-paying — in the sense that they bring you, ideally, at least twenty-five percent more per hour than you make at your job or normal work."
My income diversity involves my day job ($$$) combined with money making hobbies ($). I justify this in a lot of ways. Its supplementary income, although income I don't really need. I enjoy them more. It keeps avenues of employment open, additionally pads my savings. It's a safety net, but there is certainly not more money than my 9 to 5. Nor are they ever going to be. Thinking about them that way is interesting though…
Food for thought. Lots of it. Thank you!
I was planning to make a similar comment. Great post, and last year, I started practicing this idea of diversifying and earning more income by promoting my abilities. But I, too, don't earn more or even the same from them as I do from my 9-5, partly because the job I do best is the one that employs me full time. I'm happy to be bringing in extra money, but don't think that would be the case if I tried getting MORE for these side services. Maybe I need to buy to book to figure out how to boost it.
You're welcome.
Certainly not necessary to bring in 25 percent more per hour for such an activity, but to do so is beneficial on a couple of different levels: brings in even more of an increase in your money, cuts down the time/energy needed to do so, gets you thinking in more expansive ways about work and money, and shows you that you can command more in the marketplace than you might have thought you could.
This is a helpful practice for anyone. It's especially powerful for people who have had a problem with underearning.
Interesting article. The daily review is new to me and I think I'm going to start with it, it definitely sounds like it could help me seeing my patterns better
A big shout out to my homie Epictetus! I've been wondering how things were going with the latest book!
I want to pick a bone with your distinction between secured and unsecured debt. I realize you were trying to give people a take-away that was easy to remember, but I think it falls short, and that is particularly harmful to the people who need it most. Your logic could have used some elaboration.
Interest charges should be considered a part of the purchase price, period. I'm trying to think of various secured purchases that should be considered "good" debt, and therefore financed. The only thing that really comes to mind is a home mortgage, and potentially a car. In both cases, "oh, it's secured… it's good debt!" could get people in the trap of buying something they can't afford. Everybody knows what happens when you don't pay on a secured debt right? Bye-bye house and bye-bye car.
There are certain unsecured purchases that are reasonable to finance. A college education is one. I borrowed $30k for graduate school, and very carefully ran the numbers before I did so. Financially, financing was the right thing to do. Come to think of it, a car repair is also a smart thing to finance.
In the end, while "secured vs unsecured" might make for a good rule of thumb, considering the finance charges as part of the purchase is a better bet.
Yo, Lenderguy. Long time no see, in a manner of speaking. (Lenderguy and I used to ride a financial river together, virtually, on a wild and woolly frontier of microlending a few years back.)
There are indeed certain unsecured purchases that are reasonable for *some* people – a minority: those who have never had a problem with debt, or underearning, who have always been clear and effective with their money – to finance.
For most people, incurring unsecured debt is inimical to increase.
Also, as I have always said, anyone acting foolishly or unclearly can get themselves head over heels in trouble with secured debt as well as unsecured debt.
I agree that considering interest charges as part of the purchase price is a helpful approach. But I'll stick with everything I've already said here, as I've said it.
We're on the same fundamental side, you and I, but you (if you'll forgive me) just have some peculiarities in how you approach things. And being you, you do make them work for yourself.
Nice to run into you here. Hope you're thriving.
Uncle E.
I like these ideas and have generally lived by a similar strategy. Regarding the first point on unsecured debt, I'd ask where Jarrold (and GRS readers) would place student loans and even some mortgages.
A decade ago, it seemed that we placed debt into two simplistic categories – good debt and bad debt. Bad debt was the unsecured type described here. Good debt was debt that was an investment in your future. A house, a college education and maybe a car if the car was necessary for your commute.
I now question that dichotomy. Looking back, borrowing to buy our house eight years ago was a bad idea because it now has negative equity even though we put 20 percent down w/ a 30-year fixed. It is secured by the house, but since we never plan on walking away, I view the underwater amount as equivalent to a credit card debt hanging over us now, albeit with a far lower interest rate that is deductible.
I was fortunate enough to graduate from college when loan rates were reasonable and tuition was, by today's standards, affordable. But families and students are seriously rethinking what it means to take out student loans – and what a burden it can be after graduation.
I've never subscribed to the good debt, bad debt idea, Kevin. I've seen, as I've said elsewhere, far too many people talk themselves into a serious problem with debt by naming various borrowings "good debt."
And sure enough, it's easy to get in over one's head on a mortgage, and sure enough, the market can fall resulting in being upside down on a house – just as the equities market can fall resulting in a loss on any given stock or stocks.
Regarding, student loans: they're unsecured debt pure and simple.
Here's a rough rule of thumb: If a pawnbroker wouldn't lend you the money you want against the collateral your offering, you can be fairly certain that what you're getting elsewhere is an unsecured debt.
Love this post! I read "How to Get out of Debt…" years ago, and re-read it several times (I re-did my 100 things lists through the years, too). I enjoyed hearing about the "journey", too and how 1 decision leads to another leads to a new connection, which leads to a new opportunity, etc.
I like the idea of the nightly review. I find that the longer I prepare and then review my work, the more thoughtful it becomes.
I need to check out your book How to Get Out of Debt. While I try to keep my debt levels low, I do have debt for mortgage. I try not to have any other type of debt though and it has served me well. Now if I can just brainstorm some ways to diversify!
Thanks for sharing your story, Jerrold.
"first book ever on the subject" ?
Wow, no. Doubt it.
For example:
The Richest Man in Babylon – Clason (1926)
Uh…actually, yes.
You may not be familiar with my book.
Take a look at the title again: *How to Get Out of Debt, Stay Out of Debt, and Live Prosperously.*
The book is about just that. It's a 300-page comprehensive system comprising multiple concepts and techniques for getting out of debt and staying out.
As I said in my article: "It was the first book ever on that subject, to my best knowledge, and it's been in continuous print since 1988 (updated and expanded in 2003)."
And it was, to my best knowledge, and it has been.
I'd be happy to learn of an earlier work devoted to this, if you can provide one, but George S. Clason's *The Richest Man in Babylon" isn't it.
Excellent article.
Once I learned this key I never looked back.
One critical thing for me was to reframe what 'debt' really means. Consumer debt (or unsecured debt) is self imposed slavery. You are giving up months and even years of your future time and energy for current pleasure.
It takes willpower, discipline and strength of spirit to pay cash for your lifestyle but boy does it pay off.
I donate 10% of the profit from my book, "The Hero's Journey to Financial Independence" to a local food bank and homeless shelter. With few exceptions (and no, most of them are not mentally ill) they became homeless as a response to financial hardship relating to consumer debt.
One of my favorite thoughts about diversity comes from Andrew Tobias who suggested not owning company stock in any great degree. As an employee you already have a ton of eggs in that basket! (think Enron).
I have a job that I like, a business that I enjoy and multiple streams of income from various projects I have undertaken over the years.
I also have a pile of bad ideas; Unfinished books on my hard drive, investments that were idiotic and plenty of other costly mistakes. Living debt free provides a cushion from unexpected circumstances and self-inflicted bad decisions. If nothing else, striving to live debt free will surely ratchet down your daily dose of stress and anxiety.
The great thing about the message 'Never incur new unsecured debt' is highlighted in the comments. In my experience when people start to poke around the edges of a universal assertion such as 'never' it is simply because that can't imagine living in that way. "What about student loans?" "What about hospital bills? "What about…?" are ways of saying thet they don't beleive they have the will or discipline to develop such a habit.
I used to smoke and I don't anymore. I used to debt and I don't anymore. I replaced the habit of smoking with exercise and I developed a severe aversion to unsecured debt of any kind. The great thing about this is that it translates into better buying decisions all around. I even treat my 'secured' debt transactions differently now. Buying a house (whether my home or an investment property) has an air of 'as-if' I am paying cash because I have a completely altered sense of money, wealth and value as compared to my early days of spending a pinch more than I earned.
While I have not read Jerry's books, I just added the trilogy to my Amazon cart and look forward to reading them.
It is important to keep the focus on savings, too.
Pay yourself first in small amounts while you are getting out of debt, to create the habit.
Once you are clear, then keep up the process, so you are not tempted to replace the debt service with spending.
Good article but I don't agree that our economy is separate from the national economy. Take macroeconomics please, the national economy affects our economy.
Its ridiculous and naive to think that we're not all interdependent. In 2008 I had a hard time finding a job, I searched for months and the only job I could find was a part-time minimum wage job, I moved to the mid-west where the economy was stronger and not suffering like the west and east coasts.
We live in a global world, we can no longer say the world no longer affects our economy. I used to think that the national and global economy didn't have an impact on my life, but I was wrong. I learned that lesson the hard way.
From someone who has published books on finance you seem to have a very naive view of how the world works. I can't believe that you would actually publish such a lie on this website. Clearly you've never taken macroeconomics and microeconomics in college.
I think the author's point is you shouldn't use the state of the national or global economy as a crutch. Even in the toughest times, there are people and businesses that figure out how to make a boat load of money. Figure out a way.
Oh. Then in that case you're correct.
with respect:
"There is no denying that the larger economy does have an impact, but the most it can generally dictate, barring complete collapse, is the manner in which you earn your living and otherwise bring in money, not whether you can. Your economy is personal."
is snatched from the article above.
I interpret his "Your economy is personal" as a fundamental understanding of macro and micro-economics. I have studied both and I wholeheartedly agree with is premise.
Ay study of economics takes 'scope' into account. From a global perspective, even the poorest Americans fare well against some of the worlds poverty stricken populations. when you zoom in to state, local & community levels, there is so much economic diversity in our country that it is a huge disservice to generalize and parrot the national news on matters of the economy.
To quote Reagan, "A recession is when your neighbor loses his job. A depression is when you lose yours."
All meaningful economics is personal
Okay I feel like a tool now. I apologize. Thanks for pointing that out. I should have re-read the article.
Ha. no worries. I feel like a tool 2-3 times a day…
I think WR covered this pretty well.
This is a great post. I read How to Get Out of Debt, Stay Out of Debt and Live Prosperously back in the 80s, and it really helped me look at myself and my spending. My copy is dog-eared and highlighted and worn-out.
Bad thing was, like some addicts, it took a few stints at debt rehab to finally surrender. So, you could say that Jerrold Mundis's book was Money Rehab #!, Your Money or Your Life was Money Rehab #2, and Dave Ramsey's Total Money Makeover was Money Rehab #3–and I think third time's the charm. I finally get it!!! And, at 59 years old, it's none too soon.
The first time I "relapsed" was simply because I got the debt part, but not the increase your earnings part. The second time I relapsed was because I believed that "good debt" was acceptable–and therefore wound up with loads of student debt (to get my kids through college) and two car loans. The third time I relapsed was because I figured people I trusted with my good credit and willingness to cosign would actually honor that trust. Wrong–that got me into $200,000 worth of trouble.
I can't think of any other ways to mess up the message, so I'm simply never, ever going into debt again, for any reason, for the rest of my life. Never. Ever.
Very good article.. and I will definitely check out your book.
We are currently trying to pay off our debt once and for all, and start a debt-free life. I can't wait to have the weight off my shoulders.
The sad truth is that the journey out of debt is long and boring.. You can change your mindset, but it takes time.. The old patterns that led to spending for comfort and entertainment are hard to change.. But the end goal is so worth it..
Living debt free can be done but you have to set priorities and make sacrifices. We enjoy travelling–that's why we drive inexpensive cars. I love cooking and can eat better and less expensively than take out.
You need to have a mindset that there's a bigger rush from paying down/paying off debt than from spending.
It's very rare that I bookmark a blog post so that I can sit down with a cup of tea and read it thoroughly. This was one of those blog posts. While I don't agree with everything (the world wouldn't be fun if that's how it worked), the post was well-written, informative, and very useful. I look forward to checking out more of your work.
My thanks to everyone who posted a comment here and to so many of you for your kind words. I appreciate them.
I think I've covered everything in the comments up to now that invited or called for a reply.
I'll be moseying on now to other, pressing work.
I will check in every day or two for a while to reply to anything else that seems appropriate.
In the meantime, thanks again, all.
Great post, particularly like the four simple tips at the end. Under diversification I was surprised not to see anything referring to "making money work for you rather than working for your money". Surely part of diversification is to make money streams that you yourself don't have to work for such as shares providing dividend payments. Thanks once again
I really enjoyed your post. I have struggled with debt for a long time. First with large student loans and now a few credit cards. At one point my student loans were $127,190 they are now down to $71,780 but I currently have credit card debt close to $19,000. I earn a decent salary as I have two Master's degrees but I have not received a raise in about 5 years. I recently cut up my credit cards and gave up a family cell phone plan which is a savings of $1872 a year. I am looking forward to reading your book as I need a plan to remove borrowed money as as a way to solve any problem. I understand from experience that the quick solution brings years of pain. I am hoping to increase my income beyond my normal job as my dream is to be able to leave the corporate world and work on my own creative business ideas.
thanks for this — you're absolutely right about debt, and perhaps you should include secured debt, too. That seems to be a trouble spot for a lot of people.