Friday, 1 March 2013

Debt Is A Killer

About three years ago my then-wife decided that she wanted a baby. I looked her in the eye and said to forget it. Given her spending habits, there was not a shit-show of me keeping a family afloat.

She had a shit-fit and it eventually ended up in divorce. Now she's back in America, sucking another man's wallet (and cock) empty.

Good riddance.

However, one of the great lessons that I knew at the time - and that my ex didn't - was that not being in debt was a far, far better thing than being in debt and investing. Especially investing in things like the stock-market, where you have no great returns and no guarantee that the market will even keep its value.

Right now, the only thing propping up the stock market in New Zealand is the "retirement plans" forced upon my fellow-citizens by the government.

1 million families * $36k average wage * 4% compulsory "investment" = $1.4 billion a year, conservatively

Invested into the anaemic local stock market. Many of these "better" stocks are better only in comparison with the rest. Which is to say, comparing shit with shit, you find the slightly-less-shitty. If some of the things that I know about got into the news, three very large companies would experience a nose-dive in stock value. Certain board members would have to ceremonially fall upon their swords. Etc.

Yet even that's not what I'm talking about.

A "good" and "solid" stock in New Zealand has a 5+% dividend, after taxes are paid. That is to say, you'll take 20 years(!) to get back the money you paid for the stock. Assuming that the company actually pays dividends and doesn't go out of business or be bought out by someone else.

A lot of people here have high debts, with rates like 19+% interest for unsecured loans. Credit cards tend to be in the 23+% territory.

So. Mandatory garnishment of your wages, being forced into a scheme that pays (at best) 5+% return on interest, artificially pushing up the value of the stocks you're (forced into) buying. While you're at the same time bleeding money out the asshole at the rate of 19+%.


Pay the fucking dipshit debt off first. ALL of it, including your house. And don't get any more. Because NOT WASTING MONEY is easier for ordinary people to do than actively gamble and win in a game which is very much out of your control. One which you are forced into playing, not one that is chosen by you.

One very much like a ponzi scheme. Where the money artificially pushes up values, dropping once more when money has to be withdrawn to cash out the first wave of retirees. Chances are that you aren't going to be first. It's called a bubble, you can see it happening all the time in America.

Once you've paid off your debt, you can invest - if you choose to do so - in something that makes money. I suggest that it be your own real business: though frankly, the government here in NZ is very anti-business. Which is why the country is going down the shitter from a lack of jobs, especially for the young. There's just no overall growth.

That said, after my divorce I can easily support myself and invest (and build up a business). There's a lot that's doable when you're not being fucked over by someone who WILL constantly go into debt to fund their lifestyle. That's a mug's game guys, avoid those types of girls like the plague that they are.

I am not in the stupid government garnishment scheme. I have better uses for the sweat of my brow: ones which don't enrich others and which let me build my own private nest-egg.

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