16 November 2012

Look at Lit: Debt is Slavery

So now that I finally got this book back from one of my coworkers, I can bring another edition of Look at Literature to you. Ever since he saw me reading ERE, every single financial book I've read has been passed on to him afterwards. But enough of that, on to the book. Debt is Slavery: and 9 Other Things I Wish My Dad Had Taught Me About Money is a nice piece (but definitely a mouthful to say) written by a one Michael Mihalik. He has a story that many of you may be familiar or at least envious of: go to college, get a good job, live the "good" life. Presently, he realized that all that glitters is actually credit, not gold, and that the credit was sucking him dry. So he paid off his debts and lived happily ever after. The end.

After that change in his life, he felt like many people who have just received a ray of light or wisdom do, so he wrote the book. At right around 100 pages, you might think that it barely gets going before it switches topics. However, I did not find that to be the case. All the chapters felt to be about the perfect length--just long enough to get the information out, but short enough to not really bore you. His writing style is somewhat similar to Top 10 Distinctions, with a to-the-point feel that doesn't use a lot of words. But also like Top 10 Distinctions, he is able to pack a powerful message into a short volume.

Truer words have rarely been spoken.
The central theme (and title) of the book is that debt is slavery. As mentioned above, he goes into more detail about his life before and after his realizations about debt and money. Since his dad died early in his life than most people would like, he feels that he missed out on several lessons, particularly concerning money. However, based on the current society and how he described his dad, I don't feel like he missed much at all. Still, we're glad he finally got on the right path because that also put him on the write path (he has written more than just this book). This is realized as he continues further with the 9 other things that he was not taught.

While he does include some of the usual fare that I've come to expect from a financial book, his style is a bit more aggressive, with suggestions that run on par with some of the more hardcore frugality advocates. He goes far beyond just suggesting cut out the daily coffee run to touch on things such as actually selling your possessions to pay off any loans. Many of the books I've read all get around to mentioning selling things somewhere, but most usually focus on low-value items. A yard sale might not be the best venue for the type of selling he's suggesting here.

He also goes beyond the normal narrative in his description of the current consumer-based economy and the inherent problem with it. One of his chapters is about how companies use all sorts of methods to get your money right out your pockets. Even the most aware of us can't avoid all advertising. Practically everything in modern society is an advertisement. From the three parallel wedges on Adidas products to the Zillow house with a 'z', we're reminded of corporate influence and power everywhere. Most of us can recognize various products by sight, smell, sound, or feel without a problem, showing the success of various corporate agendas. The solution is to buy less stuff, but awareness of the marketing campaign is critical in that regard. This is definitely an example of what you not knowing hurting you.

The other topic he brings up that I found immensely telling is to save 50% of your salary. In addition to whatever you put in your retirement account, which he recommends maxing out if possible. Most other books mention saving maybe half that amount, and that's including retirement monies. As a full 50% is probably not attainable for a good number of people immediately, he does make the recommendation to step it down appropriately until you're able to get it up to at least a full 50%. He also hits early on with the relationship between saving and financial freedom. Money saved up can be used when off from work for however long it lasts. In his own example, he detailed how he found himself unemployed for a time but not having to immediately scurry to find a new job right away. He lived off his savings and passive income until he finally got a job again. Anyone can do that if they've taken the time to save the money first.

The rest of the book includes the usual financial advice fare that I mentioned earlier. He has a chapter or two on debt reduction strategies and the same for passive income strategies. His debt reductions strategies include some worksheets to help you get your debt managed and paid down. Anyone needing to use them would do well to just photocopy them or create their own in a spreadsheet program. This has the added benefit being able to be customized as well as to track trends over time. That is helpful and dare I say essential for those who may feel as if their debt will never be gone, thereby giving up midway.

Overall, I have a favorable opinion of the book and would recommend it to any and everyone who has any sort of debt at all. While his style may be abrupt and more research may be required for some of the subjects for passive income, he presents a good blueprint and compelling argument for anyone in debt to extricate themselves from it. As usual, I'd recommend you trot by your local lending library first to see if they have a copy. Going out on a limb, though, I'm going to guess that they don't have it in stock. You will then be forced into a used copy from Amazon, but that does save you a few dollars. Unless you happen to be one of my coworkers/friends, then I'll lend you my copy. But whatever you have to (legally) do to get it, make it quick because the sooner you can read this book, the better.

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