I have had a principle all my life which is "don't spend what you don't have." Taught me by my mother, which my father didn't follow sadly (it killed him).
Its more than a principle really, it is reality. You can't give what you don't have! If I don't have an apple then I can't give you an apple. If I sell the apple for money, then I can give you money; but if I don't have an apple then I can't sell it and I can't give you any money. There is no such thing as bank loan! (banks don't keep any apples - if you follow the analogy)
Now if I give you an apple, it is probably as a friend and I won't expect it back (this is the Godly way), but might expect you to be more generous with your things in future. So that if at some later stage you refused to let me borrow a pen I might begin to question whether I give you anything else in the future (but I won't hold that against you - just learn what you are like). Once given it is a gift, and that is the end of the transaction.
The rule here is never give anything that you expect back! because you will (quite probably) never see it again! People who abuse our generosity lose our friendship (which since we are generous people - makes it their severe loss to them), but always remain generous with what we can afford to lose!
Now someone may lure us into giving them the apple with a promise of 2 apples in return! Idiots. We aren't expecting even 1 apple back, let alone 2!! If we give them the apple it is because we can "afford to lose it", even if they promise us the moon, they can't get what we can't afford (banks break this rule every day).
In reverse someone may try to give us an apple on the agreement that we give them 2 apples in return. Then it must be assumed we will have two apples in the future to give them, so why not just wait for those 2 apples instead of take the 1 now?
If we are starving and we will die before we get an apple of our own - and the giver shows us no mercy or generosity then we know they are a crook already! We take their tainted apple knowing we deal with evil people. Better to find a generous person to take the apple from. If it is still a matter of life and death, then we are forced to deal with the devil - but should aim to extricate ourselves as soon as possible. Ultimately the devil loses because as already said - chances are you won't get back what you lend! (the problem in the credit markets now)
Maybe I'll take the apple and owe 2 apples in the future, which I know I won't have, but I might be able to get them magically by luck and gambling.
If we ever gamble then walk into the poorest, grubbiest gambling hall. Why? because these people don't make much money, which means we might. If the gambling hall is full of lights and good furnishings, if it offers cheap drinks etc they make a lot of money and we will lose. Obviously on average people lose when gambling, that is why gambling halls exists. On average I will lose if I gamble, but maybe today is my lucky day... but it is more likely that today is not my lucky day, so there is never a reason to gamble (with what we cannot afford to lose).
So the situation is simple. Never spend what you have not got, never give what you cannot afford to lose, and never accept anything that you can't repay (and if you can repay it then why do you need it in the first place).
For these reason I never borrow money, because I know I'll need to pay it back and if I can pay it back then why not save until such time as I can spend it? Very simple really.
So people argue that houses prices are far to expensive to afford all in one go!! We need to take out a mortgage. But why are they too expensive? it is because there is competition for houses from people who are prepared to take out loans. Thus to get what they want people are not limited by how much money they have, but how much money can can afford to borrow. They feel richer. But all this does is pushes up prices so that we pay more for the same things we would have got anyway... and after having got them we then need to pay back a large percentage of our wealth to the loaner - the parasite. As loans become cheaper, prices therfore rise - and as loans become more expensive prices therefore fall (as is illustrated by the housing markets). If loans where illegal then houses would find their TRUE value!!
If credit was illegal, then we would all still be competing for the same things, but with a fixed pool of real money, and once we had bought things that would be it... a single payment with no repayments. We would actually be richer and the eschelons of parasites who work in the city doing nothing but sucking the wealth out of the honest workers would have to get proper jobs! Consider that current house prices are only a half of the amount we need to pay back in loans. Where the estate agent sells for £170,000, factor in the solicitors and bankers and the printing presses (inflation) and we will actually pay back more like £400,000 to get a house : that is the TRUE average price of a house recently! 24years worth of salary for the average person: almost half of all the money they will ever own! Worth about £40,000 cash up front in reality.
The flip side to this is that we are used to getting "interest" on our investments. Even without thinking this is nonsense... what! money is like a plant? ... it grows!!? Obviously absurd. What really happens is that our money is lent to some fool who then becomes the host to our own parasitic behaviour, sucking the wealth out of them. I suppose the idiom "(s)he who lives by interest shall die by credit" holds here.
Its all a lot easier however if we don't get all the millions of parasites involved in the first place and just refuse credit. So I have always said I won't buy a house until I can buy one is cash.
Now that day doesn't seem too far away ;-) because all the parasites have run out of hosts and they are dying. The hosts (the people who do an honest days work) need to extract their money from the hold of these parasites, invest it ethically so that where they are loaned it is at low interest rates, and not in exploitative risky loans: And stop buying things on credit... for ever!
Now sadly this argument doesn't entirely work any more because the parasites and devils have got really corrupt in the passed few decades!! There is a much easier way to make money than to work for it... turn on a money printing press. The law says that it is illegal to print money without a license... and the few people who can, effectively control the country. While we play the game the straight way, working and saving they just print away for nothing. This breaking of their own rules has caused the whole game to break down. If my saving were once a percentage of the total money of the country one day, after the printing press has been on over night I wake up to find my savings only a fraction of the now growing total money.
It is better to be in debt these days, take as much as you can from the parasites and run, default, change address and name and run. This is the rules of the game they have created and I suppose they will suffer for it. If you are in debt just get bankrupt by any means (this is what the parasites do). Sadly we can't steal from the tax payer like the parasites. But, change name, dodge the credit references (like the city has been doing for a decade), perform identity fraud, whatever and pop up somewhere else. These are the rules that the parasites have lived by, if you are a victim then I suppose play along.
For me I have ignore the game, and will ignore all this too. I have 4 simple rules I've always lived by that I hope will become law one day. The 4 laws of economics are.
- Never buy anything you can't afford. Never borrow! only wait until you can afford it (which will usually be a fraction of the time to clear the debt anyway).
- Never accept what you can't repay immediately (in which case why accept it).
- Never lend anything you can't afford to lose (that includes bank savings).
- The corrollary is: Don't expect interest on your savings (except to match inflation - which wouldn't happen anyway if we followed these laws)
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