What the bank didn’t say about wealth creation – part 1
The Law of Attraction and What the Bank Didn’t Say About Wealth Creation “Spend, borrow; borrow, spend,” the bankers urged. “No credit, slow credit, bad credit, no problem. If you own your own home, we have a loan for you. No equity required.”
We see it every day, a new way to borrow money, stretch your credit card limits or use the equity in your home, and the great things you can buy with that newfound wealth. Creating wealth without working for it on a scale never seen before. Where little attention has been paid to the impact of this added credit and its repayment. Because greed is good, have it now, pay for it later, it was programmed into us by the media at all levels. Personal debt has already become a major problem, and any economic downturn and associated reduced employment will have direct consequences, not to mention a round of interest rate hikes.
No wonder bankruptcies have climbed to levels 10 times higher than a few decades ago. In a crisis that is on a scale never before seen in the world of finance. Computer modeling, which said there was little risk, found there were holes wide enough for trucks to drive through. It is spreading from America and engulfing areas of finance that have never been touched before. With foreclosure disasters being reported every day, deep-pocketed loan providers are now reaping what they have sown. The levels of debt held by some banks are causing their capital to drain, forcing the government to step in with public funds to stem cash flows.
Dr. Gary Eldred, a professor of real estate at Trump University, put it this way.
Weakness of will and financial discipline
- By adopting a sales approach, the bankers knew that millions of people would jump at the chance to spend and borrow, then think about the devastating consequences later.
- Because let’s face the facts. Home equity borrowing defeats your ability to accumulate wealth. If you use it, use it only for a productive investment that offers low risk for good returns. (As the old adage goes: “Never do it to seed corn.”) Home loan data overwhelmingly show that borrowers most often put the money they borrowed toward consumption, including rash home improvements or an extended trip abroad.
- How about consolidating your bills or paying off high-interest credit card balances? Again, common sense says no. Instead of paying less interest, this approach often leads to even more debt. Why? Because borrowers who wrap balances on their credit cards and other accounts into home equity loans (or refinances) temporarily minimize the pain of debt. But with a longer term and lower payment, debt generates higher long-term costs. Even worse, many borrowers are causing their credit card balances to climb back up to where they were before.
“Thank goodness the home price went up $10,000 last year,” they reckon. But in the meantime, the destruction of wealth continues.
Don’t let yourself fall into this situation, use the power provided by Universal Laws and the Law of Attraction to build your own wealth so you don’t have to borrow beyond your means to pay back. Build your own goals, don’t let others build your goals for you by including you in their goals, where what they have in store for you is little and more likely, “but a life living in debt”.
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