Avoid debt— it’s dangerous.

Let it sink in.

Make it instinct1.

Debt is DANGEROUS

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Beware the vicious debt cycle:

flowchart LR subgraph M[Debt Cycle] direction TB A(Expenses too high) --> B(Borrow) B --> C(Same income + Interest
= Higher expenses) C --> B end subgraph N[Collapse] direction TB E(Can't borrow) E --> F(Disaster / Ruin) end M -.-> N

Numerous and interwoven factors ensnare you into debt: Easy credit. Living beyond your means. Earning too little. Financial illiteracy. Desperation. Predatory lenders.

Desperate people often turn to debt seeking relief. They face impossible choices and are easy to exploit2. Try to avoid this situation entirely and build good financial habits early. Unfortunately, not everyone has this luxury.

Throughout history, many cultures protected citizens with usury laws because debt is insidious and financially ruinous.

Use debt only to build or protect wealth. Never for non-essentials. Learn to live on less or earn more— ideally, both.

Educate yourself on personal finance and how debt works. Never forget: interest payments can quickly erode your earnings. Read your contracts. Use their terms in your favor3.

Protect yourself by paying with cash4. When borrowing, pay it off as quickly as possible5.

Debt can leave you very vulnerable to financial distress or worse, ruin. Only with discipline, knowledge, and experience can you harness debt as a tool, avoiding the trap.

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  1. If you’re financially savvy, there are ways to use debt as leverage and enhance income. Caution advised. ↩︎

  2. This topic deserves deeper discussion. ↩︎

  3. Beware of deals that lend you money at no cost for a period of time. Usually the interest increases substantially if it’s not paid off before the grace period. ↩︎

  4. Use cash or equivalent. When financing, pay it off during the finance period. Don’t keep a credit balance. ↩︎

  5. Sometimes it’s better to hold debt if you’re earning more elsewhere. Still, aim to pay it off quickly. Your future is unpredictable and never guaranteed. ↩︎