فصل 03

3 Debt Myths: Debt Is (Not) a Tool

Red-faced and fists clenched, the toddler yells with murder in his voice, “I want it! I want it! I want it!” We have all watched this scene unfold in the grocery store. We may even have watched our own children do this (once).

It is human nature to want it and want it now; it is also a sign of immaturity.

However, our culture teaches us to live for the now. “I want it!” we scream, and we can get it if we are willing to go into debt.

I have heard it said that if you tell a lie often enough, loudly enough, and long enough, the myth will become accepted as a fact. Sometimes we don’t even realize what we are doing is stupid because we have been taught that it’s just “the way you do it,” and so we never ask why.

Debt has been sold to us so aggressively, so loudly, and so often that to imagine living without debt requires myth-busting. Debt is so ingrained into our culture that most Americans can’t even envision a car without a payment, a house without a mortgage, a student without a loan, and credit without a card. We have been sold debt with such repetition and with such fervor that most folks cannot conceive what it would be like to have no payments. We can’t do without debt, or can we?

Working with tens of thousands of people on their Total Money Makeover in the last several years, I have found that a major barrier to winning is our view of debt. Most people who have made the decision to stop borrowing money have experienced something weird: ridicule. Friends and family who are disciples of the myth that debt is good have ridiculed those on the path to freedom.

John Maxwell tells of a study done on monkeys. A group of monkeys were locked in a room with a pole at the center. Some luscious, ripe bananas were placed on top of the pole. When a monkey would begin to climb the pole, the experimenters would knock him off with a blast of water from a fire hose. Each time a monkey would climb, off he would go, until all the monkeys had been knocked off repeatedly, thus learning that the climb was hopeless. The experimenters then observed that the other primates would pull down any monkey trying to climb. They replaced a single monkey with one who didn’t know the system. As soon as the new guy tried to climb, the others would pull him down and punish him for trying. One by one, each monkey was replaced and the scene repeated until there were no monkeys left in the room that had experienced the fire hose. Still, none of the new guys were allowed to climb. The other monkeys pulled them down. Not one monkey in the room knew why, but none were allowed to get the bananas.

We aren’t monkeys, but sometimes we exhibit behavior that seems rather chimplike. We don’t even remember why; we just know that debt is needed to win. So when a loved one decides to get a Total Money Makeover, we laugh, get angry, and pull him down. We Americans are like the last set of monkeys.

I want to expose the inner workings of the Debt Myth by looking at many of the sub-myths. However, I need to warn you to watch out for your instinct to defend the American way of borrowing. Calm down. Relax and go for a ride with me for a few pages. I might be onto something. If, at the end of this myth-busting section, you conclude I’m just a nut with a book, you will not be forced to change.

Myth: Debt is a tool and should be used to create prosperity.

Truth: Debt adds considerable risk, most often doesn’t bring prosperity, and isn’t used by wealthy people nearly as much as we are led to believe.

When training for my first career in real estate, I remember being told that debt was a tool. “Debt is like a fulcrum and lever,” allowing us to lift what we otherwise could not. We can buy a home, a car, start a business, or go out to eat and not be bothered with having to wait. The myth has been sold that we should use OPM, other people’s money, to prosper. The academic garbage is spread really thick on this issue.

My contention is that debt brings on enough risk to offset any advantage that could be gained through leverage of debt. Given time, a lifetime, risk will destroy the perceived returns purported by the mythsayers.

I once was a mythsayer myself, but life and God had some lessons to teach me. Only after losing everything I owned and finding myself bankrupt did I think that risk should be factored in. Life hit me hard enough to get my attention and teach me. According to Proverbs 22:7: “The rich rules over the poor, and the borrower is slave to the lender” (NRSV). I was confronted with this Scripture and had to make a conscious decision of who was right—my broke finance professor, who taught that debt is a tool, or God, who showed obvious disdain for debt. Beverly Sills had it right when she said, “There is no shortcut to anyplace worth going.”

I have found that if you look into the lives of the kind of people you want to be like, you will find common themes. If you want to be skinny, study skinny people, and if you want to be rich, do what lots of rich people do, not what some mythsayer says to do. The Forbes 400 is a list of the richest 400 people in America as rated by Forbes magazine. When surveyed, 75 percent of the Forbes 400 (rich people, not your broke brother-in-law with an opinion) said the best way to build wealth is to become and stay debt-free. Walgreen’s, Cisco, and Harley-Davidson are run debt-free. I have met with thousands of millionaires in my years as a financial counselor, and they all lived on less than they made and spent only when they had cash. No payments.

History also teaches us that debt wasn’t always a way of life; in fact, three of the biggest lenders today were founded by people who hated debt. In 1910 the Sears catalog stated, “Buying on Credit Is Folly.” J. C. Penney department stores make millions annually on their plastic, but their founder was nicknamed James “Cash” Penney because he detested the use of debt. Henry Ford thought debt was a lazy man’s method to purchase items. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt.

You have probably heard a lot of the sub-myths, which fall in line behind the big one that says, “Debt is a tool.” So that we leave no stone unturned, let’s review and debunk each of the myths spread by a culture that has officially bought the lie.

Myth: If I loan money to friends or relatives, I am helping them.

Truth: If I loan money to a friend or relative, the relationship will be strained or destroyed. The only relationship that would be enhanced is the kind resulting from one party being the master and the other party a servant.

The old joke is that if you loan your brother-in-law $100 and he never speaks to you again, was it worth the investment? We have all experienced loaning someone money and finding an immediate distancing in the relationship. Joan called my radio show one day complaining about how a loan had ruined her relationship with one of her best friends at work. She had loaned the lady, a broke single mom, $50 until payday. Payday came and went, and her friend—someone she used to talk to at lunch every day, someone who was her confidante and sounding board—now avoided her. Shame and guilt had entered the scene with no provocation. We don’t control how debt affects relationships; debt does that independently of what we want. The borrower is slave to the lender; and you change the spiritual dynamic of relationships when you loan loved ones money. They are no longer a friend, uncle, or child; they are now your servant. I know some of you think that is overstated, but tell me why Thanksgiving dinner tastes different when a loan has been served. Eating with your master is different from eating with your family.

Joan was really torn up about losing this friendship. I asked her if the friendship was worth $50. She gushed that it was worth many times that, so I told her to call her friend and tell her the debt was forgiven, a gift. The forgiveness of the debt helped her remove the master-servant dynamic from the relationship. Of course, it would be better if that dynamic had never entered the scene. I also suggested two stipulations to the forgiveness of the debt: first, that the friend agree to help someone in need someday; and second, that she never loan friends money. Let’s break the myth chain. The lesson is that while it is fine to give money to friends in need if you have it, loaning them money will mess up relationships.

I have dealt with hundreds of strained and destroyed families in which well-meaning people loaned money to “help.” Parents loan the twenty-five-year-old newly married couple the down-payment money for the first home. It all seems so noble and nice until the daughter-in-law catches the disapproving glances at the mention of the couple’s upcoming vacation. She knows the meaning of the glances, that she should check with these well-meaning, noble parents-in-law before she buys toilet paper until the loan is repaid. A lifetime of resentment can be born right there.

Hundreds of times I’ve seen relationships strained and sometimes destroyed. We all have, but we continue to believe the myth that a loan to a loved one is a blessing. It isn’t; it is a curse. Don’t put that burden on any relationship you care about.

Myth: By cosigning a loan, I am helping a friend or relative.

Truth: Be ready to repay the loan; the bank wants a cosigner for a reason, which is that they don’t expect the friend or relative to pay.

Think with me for a moment. If debt is the most aggressively marketed product in our culture today, and the lending industry has denied your friend or relative a loan, there is little doubt the potential borrower is trouble just looking for a place to happen.

The lender requires a cosigner because there is a very high statistical chance that the applicant won’t pay. So why do we cosign knowing full well the inherent problems?

We enter this ridiculous situation only on emotion. Intellect could not take us on this ride. We “know” they will pay because we “know” them. Wrong.

The sad thing is that those of us who have cosigned loans know how they end up. We end up paying them, but only after our credit is damaged or ruined.

According to Proverbs 17:18, “It’s stupid to guarantee someone else’s loan” (CEV). That pretty well sums it up. Just like trying to bless a loved one with a loan, many people are trying to help by cosigning, and the result is damaged credit and damaged or destroyed relationships.

I see cases of people caught in the cosigning trap every day on The Dave Ramsey Show, our radio talk show. Joe called because he was surprised to find he was on the hook for $16,000 on a mobile home he cosigned for fifteen years ago. Ten years ago his brother’s mobile home was repo’ed, and the bank sold it for $16,000 less than was owed; now, ten years later, the bank caught up with Joe and wanted its money. Joe was angry that this could happen! Most cosigners have no concept of the trip they’ve signed up for.

Myth: Cash Advance, Payday Loans, Rent-to-Own, Title Pawning, and Tote-the-Note Car Lots are needed to help lower-income people get ahead.

Truth: These rip-off examples of predatory lending are designed to take advantage of lower-income people and benefit only the owners of the companies making the loans.

Lower-income people will remain at the bottom of the socioeconomic ladder if they fall for these rip-offs. These “lenders” (or, as I like to call them, “the scum of the scum”) are bottom-feeders and legally make themselves rich on the backs of the poor or those soon to be poor. The lending rates of these types of operations are over 100 percent interest, and if you want to stay on the bottom, keep dealing with these guys. You know why these types of operations are located only at the poor end of town? Because rich people won’t play. That is how they got to be rich people.

The Payday Loan is one of the fastest-growing trash lenders out there. You write a hot check for $225, dated one week from now, which will be payday. They will give you $200 cash on the spot. All for a mere $25 service charge, which equates to over 650 percent interest annually! Mike called my talk show recently and was caught in a web of Payday Loans. Basically, Mike had borrowed from one trash lender to pay another, and by doing this again and again, had created a cycle of financial death. He was panicked because he was being threatened with criminal charges for writing bad checks by the very places that have a business model based on postdated “bad” checks.

This type of business is legalized loan-sharking. The sad thing is that the only way out for Mike is to stop paying them, close his accounts, and then meet with each lender to work out payment arrangements. That will mean extra jobs and selling things around the house.

The classic Tote-the-Note Car Lot is no better. Most of these transactions involve older, cheaper cars. The dealer purchases these cars and sells them for a down payment equal to what he paid for the car, so the payments at 18 to 38 percent interest paid weekly are all gravy. Tow trucks all over town recognize these exact cars because the car being sold has been sold many times and repeatedly repo’ed by the dealer. Every time the dealer sells the car, his return on investment skyrockets. The payments could have purchased the car for cash in a matter of weeks; in fact, the down payment could have purchased the car if the buyer had been a little more savvy.

Rent-to-Own is one of the worst examples of the little Red-Faced Kid in “I want it now!” mode. The Federal Trade Commission continues to investigate this industry because the effective interest rates in rent-to-own transactions are over 1,800 percent on average. People rent items they can’t possibly afford to buy because they look only at “how much a week” and think, I can afford this. Well, when you look at the numbers, no one can afford this. The average washer and dryer will cost you just $20 per week for ninety weeks. That is a total of $1,800 for a washer and dryer. As my old professor used to say about the “own” part of Rent-to-Own, “You should live so long!”

If you had saved $20 per week for just ten weeks, you could have bought the scratch-and-dent model off the floor at the same Rent-to-Own store for $200! Or you could have bought a used set out of the classifieds or online if the Red-Faced Kid (“I want it, and I want it now!”) rules your life, you will stay broke!

If you use Payday Loans, Tote-the-Note, and Rent-to-Own, please understand that you are being destroyed financially. These businesses feed on the working poor, and you must avoid them at all costs if you want to win with money.

Myth: “Ninety days same as cash” equals using other people’s money for free.

Truth: Ninety days is not the same as cash.

The silly marketing that America falls for has resulted in this: we buy things we don’t need with money we don’t have in order to impress people we don’t like. “Ninety days same as cash” has exploded in furniture, electronics, and appliance sales.

Ninety days is NOT the same as cash for three basic reasons: One, if you will flash cash ($100 bills) in front of a manager who has a sales quota to meet, you will likely get a discount. If you can’t get a discount, go to the competitor and get one. You do not get the discount when you sign up for the finance plan.

Two, most people don’t pay off the debt in the allotted time. Nationally, 88 percent of these contracts convert to debt—a debt where you are charged a rip-off interest rate of 24 to 38 percent, and they back-charge you to the date of purchase. Please don’t tell me you are the one who is actually going to pay it off. No, Virginia, ninety days is NOT the same as cash.

Myth: Car payments are a way of life; you’ll always have one.

Truth: Staying away from car payments by driving reliable used cars is what the average millionaire does; that is how he or she became a millionaire.

Taking on a car payment is one of the dumbest things people do to destroy their chances of building wealth. The car payment is most folks’ largest payment except for their home mortgage, so it steals more money from the income than virtually anything else. The Federal Reserve notes that the average car payment is $495 over sixty-four months. Most people get a car payment and keep it throughout their lives. As soon as a car is paid off, they get another payment because they “need” a new car. If you keep a $495 car payment throughout your life, which is “normal,” you miss the opportunity to save that money. If you invested $495 per month from age 25 to age 65, a normal working lifetime, in the average mutual fund averaging 12 percent (the eighty-year stock market average), you would have $5,881,799.14 at age sixty-five. Hope you like the car!

Some of you had your nose in the air as intellectual snobs when I illustrated how bad Rent-to-Own is because you would never enter such an establishment, and yet you are doing worse on your car deal. If you put $495 per month in a cookie jar for just ten months, you have nearly $5,000 for a cash car. I am not suggesting you drive a $5,000 car your whole life, but that is how you start without debt. Then you can save the same amount again and trade up to an $10,000 car ten months later and up to a $15,000 car ten months after that. In just thirty months, or two and a half years, you can drive a paid-for $15,000 car, never having made a payment, and never have to make payments again. Taking on car payments because everyone else does it does not make it smart. Will your broke relatives and friends make fun of your junk car while you do this? Sure they will, but that is a very good sign you are on the right track.

Having been a millionaire and gone broke, I dug my way out by making a decision about looking good versus being good. Looking good is when your broke friends are impressed by what you drive, and being good is having more money than they have.

Are you starting to realize that The Total Money Makeover is also in your heart? You have to reach the point that what people think is not your primary motivator. Reaching the goal is the motivator. When the goal, not how you look, begins to matter, you are on your way to a Total Money Makeover.

Today I drive very nice, very expensive, slightly used cars, but it wasn’t always that way. After going broke, I drove a borrowed 400,000-mile Cadillac with a vinyl roof torn loose so that it filled up with air like a parachute. The predominant color on this car was Bondo. I drove the Bondo buggy for what felt like ten years during one three-month period. I had dropped from a Jaguar to a borrowed Bondo buggy! This was not fun, but I knew that if I would live like no one else, later I could live like no one else. Today I am convinced that my wife and I are able to do anything we want financially partially because of the car sacrifices we made in the early days. I believe, with everything within me, that we are winning because of the heart change that allowed us to drive old, beat-up cars in order to win. If you insist on driving new cars with payments your whole life, you will literally blow a life’s fortune on them. If you are willing to sacrifice for a while, you can have your life’s fortune and drive quality cars. I’d opt for the millionaire’s strategy.

Myth: Leasing a car is what sophisticated people do. You should lease things that go down in value and take the tax advantage.

Truth: Consumer advocates, noted experts, and a good calculator will confirm that the car lease is the most expensive way to operate a vehicle.

Consumer Reports, Smart Money magazine, and my calculator tell me that leasing a car is the worst possible way to acquire a vehicle. In effect, you are renting to own. The cost of capital, which is the interest rate, is extremely high, yet most new car deals this year will be a fleece . . . I mean, a lease. They’re baaaadd! Sorry, that’s my impression of a sheep getting “fleeced.” The average interest rate is 14 percent.

Shouldn’t you lease or rent things that go down in value? Not necessarily, and the math doesn’t work on a car, for sure. Follow me through this example: If you rent (lease) a car with a value of $22,000 for three years, and when you turn it in at the end of that three-year lease the car is worth $10,000, someone has to cover the $12,000 loss. You’re not stupid, so you know that General Motors, Ford, or any of the other auto giants aren’t going to put together a plan to lose money.

Smart Money magazine quotes the National Auto Dealers Association (NADA) as stating the average new car purchased for cash makes the dealer an $82 profit. When the dealer can get you to finance with them, they sell the financing contract and make an average of $775 per car! But if they can get you to fleece the car, the dealer can sell that fleece to the local bank or GMAC, Ford Motor Credit, Toyota Credit, etc., for an average of $1,300! The typical car dealer makes their money in the finance office and the shop, not in the sale of new cars.

Car fleecing is exploding because dealers know it is their largest profit center.

Myth: You can get a good deal on a new car at 0 percent interest.

Truth: A new car loses 60 percent of its value in the first four years; that isn’t 0 percent.

You can’t afford a new car unless you are a millionaire and can, therefore, afford to lose thousands of dollars, all in the name of the neat new-car smell. A good used car that is less than three years old is as reliable or more reliable than a new car. A new $28,000 car will lose about $17,000 of value in the first four years you own it. That is almost $100 per week in lost value. To understand what I’m talking about, open your window on your way to work once a week and throw out a $100 bill.

The average millionaire drives a two-year-old car with no payments.

The average millionaire is unwilling to take the loss that a new car dishes out; that is how they became millionaires.

Some people want to buy a new car for the warranty. If you lose $17,000 of value over four years, on average you have paid too much for a warranty. You could have completely rebuilt the car twice for $17,000!

Myth: You should get a credit card to build your credit.

Truth: You won’t use credit with your Total Money Makeover, except maybe for a mortgage, and you don’t need a credit card for that.

The best myth is the “build your credit” myth. This myth means we have to get debt so we can get more debt because debt is how we get stuff. Those of us who have had a Total Money Makeover have found that cash buys stuff better than debt. The one question we must answer is, “How do I get a home mortgage?” Later, I will introduce you to the 100-percent-down plan, or if you must, how to settle for a fifteen-year fixed-rate mortgage. But if you want that fifteen-year fixed rate with a payment that is no more than 25 percent of your take-home pay so I won’t yell about it, don’t you need credit? No.

You will need to find a mortgage company that does actual underwriting. That means they are professional enough to process the details of your life instead of using only a FICO score (lending for dummies). You can get a mortgage if you have lived right. Let me define “lived right.”

You can qualify for a Conventional fifteen-year fixed-rate loan if:

• You have paid your landlord early or on time for two years.

• You have been in the same career field for two years.

• You have a good down payment, which is more than “nothing down.”

• You have no other credit, good or bad.

• You are not trying to take too big a loan. A payment that totals 25 percent of take-home pay is conservative and will help you qualify.

Myth: You need a credit card to rent a car, check into a hotel, or buy online.

Truth: A debit card will do all that.

The Visa debit card or other check cards that are connected to your checking account give you the ability to do virtually anything a credit card will do. Some rental-car places don’t take debit cards, but most do. I buy things online and stay in hotels using my debit card all the time.

Myth: The debit card has more risk than a credit card.

Truth: Nope.

Supposed financial experts have spread this myth to the point that it is virtually urban legend. The fact is, Visa’s regulations require the card-issuing bank to afford the debit card the exact same protections in cases of theft or fraud.

Myth: If you pay off your credit card every month, you get the free use of someone else’s money.

Truth: CardTrak says that 60 percent of people don’t pay off their credit cards every month.

When you play with snakes, you get bitten.

I have heard all the bait put out there to lure the unsuspecting into the pit. A free hat, airline miles, brownie points back, free use of someone else’s money, a discount at the register—the list goes on to get you to sign up for a credit card. Have you ever asked why they work so hard to get you involved? The answer is that you lose and they win.

You won’t wear the hat, and according to MSNBC.com, 90 percent of the airline miles are never redeemed. Maybe you think, I pay mine off, so I’m using their money. I’m winning. Wrong again. A study of credit card use at McDonald’s found that people spent 47 percent more when using credit instead of cash. It hurts when you spend cash; therefore you spend less.

The big question is, what do millionaires do? They don’t get rich with free hats, brownie points, air miles, and the use of someone else’s money. What do broke people do? They use credit cards. An American Bankruptcy Institute study of bankruptcy filers reveals that 69 percent of filers say credit-card debt caused the bankruptcy. Broke people use credit cards; rich people don’t. I rest my case.

Myth: Make sure your teenager gets a credit card so he or she will learn to be responsible with money.

Truth: Getting a credit card for your teenager is an excellent way to teach him or her to be financially irresponsible. That’s why teens are now the number-one target of credit-card companies.

Parents must instead teach the teenager to just say no. Anyone visiting a college campus in recent years has been shocked at the aggressive and senseless marketing of credit cards to people who don’t have jobs. The results can be devastating. Two college students in Oklahoma gave up on their credit-card debt and committed suicide with the bills lying on the bed beside them.

The reason why lenders market so aggressively to teens is brand loyalty. The lenders’ studies have found that we consumers are very loyal to the first bank that certifies our adulthood by issuing us plastic. When I am doing an appearance and cutting up credit cards, the emotional attachment many people have to the first card they got in college is amazing. They clutch it like it is an old friend. Brand loyalty is real.

Several thousand schools across America are using our high-school curriculum called “Foundations in Personal Finance.” The results have been staggering. Teens latch onto The Total Money Makeover before they need one. A recent graduate of the program, fifteen-year-old Chelsea, said, “I think this class has totally changed my life. Whenever I see someone using a credit card, I think, Whoa! How could they do that to their life? I always thought you had to have credit-card payments, house payments, and car payments. Now, I realize you don’t have to.” Very cool, Chelsea.

You have to start teaching kids early because “kid-branding” is now commonplace. A few years back, Mattel put out “Cool Shopping Barbie,” which was sponsored by MasterCard. Of course, this “cool” babe had her own MasterCard. Our kids are on commission, not allowance. Work and get paid; don’t work and don’t get paid. It’s just like the real world. Our children put their newly earned money in envelopes labeled Save, Spend, and Give. When a child learns to work, save, spend, and give under a mature parent’s direction, the child can avoid the messages that say a credit card equals prosperity.

Myth: Debt consolidation saves interest, and you have one smaller payment.

Truth: Debt consolidation is dangerous because you treat only the symptom.

Debt CONsolidation—it’s nothing more than a con because you think you’ve done something about the debt problem. The debt is still there, as are the habits that caused it; you just moved it! You can’t borrow your way out of debt. You can’t get out of a hole by digging out the bottom. Larry Burkett said debt is not the problem; it is the symptom. I feel debt is the symptom of overspending and undersaving.

A friend of mine works for a debt-consolidation firm whose internal statistics estimate that 78 percent of the time, after someone consolidates his credit-card debt, the debt grows back. Why? He still doesn’t have a game plan to either pay cash or not buy at all, and hasn’t saved for “unexpected events,” which will also become debt.

Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. In almost every case we review, though, we find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment. If you stay in debt longer, you pay the lender more, which is why they are in the business of debt consolidation. The answer is not the interest rate; the answer is a Total Money Makeover.

Myth: Borrowing more than my home’s value is wise because I’ll restructure my debt.

Truth: You are stuck in the house, which is really dumb.

On today’s radio show I took a call from a desperate man facing bankruptcy. He had borrowed $42,000 on a second mortgage, a home equity loan. Dan’s existing balance on his first mortgage was $110,000, making his total new mortgage debt $152,000. Dan’s home was worth $125,000, so he owed $27,000 more on his home than it was worth. He lost his job two months ago and luckily has just found a job in another state, but he can’t sell his home. He had the same job for sixteen years and thought he had security, but now, just a few months later, he is “in the soup.”

My suggestion to Dan was that he call the second mortgage rip-off lender and get an acknowledgment of the truth, that there really isn’t any collateral for the loan. They wouldn’t foreclose in a hundred years, but they will sue him when the first mortgage company forecloses. So, after asking the second lender to release the lien for whatever proceeds above the first mortgage come from a sale, Dan will sign a note and make payments on the rest. Dan will have payments for years to come on a second mortgage for a home he no longer owns, but like most folks, his second mortgage was to pay off (move) debt he already had on credit cards, medical bills, and other life issues. Today, with a job in another state, Dan would rather have all his old debt back and his home where he could sell it easily.

Myth: If no one used debt, our economy would collapse.

Truth: Nope, it would prosper.

The occasional economics teacher feels the need to pose this ridiculous scenario. However, let’s pretend for the fun of it. What if every single American stopped using debt of any kind in one year? The economy would collapse. What if every single American stopped using debt of any kind over the next fifty years, a gradual TOTAL Money Makeover? The economy would prosper, although banks and other lenders would suffer. Do I see tears anywhere? What would people do if they didn’t have any payments? They would save and they would spend, not support banks. Saving and investing would cause wealth to be built at an unprecedented level. Giving would increase, and many social problems would be privatized; thus, the government could get out of the welfare business. Then taxes could come down, and we would have even more wealth. As that great philosopher Austin Powers said, “Capitalism, yeah, baby!”. Those who are worried about polarization, the widening gap between the haves and the have-nots, need not look to government to solve the problem; just call for a national Total Money Makeover.

Are you beginning to understand that debt is NOT a tool? It is a method to make banks wealthy, not you. The borrower truly is slave to the lender.

How much could you give every month, save every month, and spend every month if you had no payments? Your income is your greatest wealth-building tool, not debt. Your Total Money Makeover begins with a permanently changed view of the Debt Myths.