Monday, June 22, 2015

My Number One Rule about Money

 This was originally published at the old Sovereign Links Blog on October 4, 2010

“If I can’t afford to pay for something with cash - I can’t afford it.”

That’s the rule - and it should be your rule too.  I don’t write checks and I do not use credit cards (unless it is absolutely needed). Cash is just much more simple for me. Cash is King. Now here is something very important that you should know - it is not a conspiracy theory and it is not an internet rumor - there is an ongoing campaign by several first world countries that want to turn people that use cash into criminals - in England the campaign wants citizens to inform on their neighbors whom keep to themselves and keep their blinds closed and even use cash.  In the United States, bank tellers are instructed to inform authorities if one makes deposits over ten thousand dollars and even if you withdraw large sums of (your own) money from your account - these bank tellers even go so far as to ask you what you are going to do with you your own money - it is their policy, you see, banks in the United States are voluntary complaints in this Big Brother game against your privacy, and cash buys you privacy  - along with security.  You should also keep enough cash at home to get you and your family out of town in a hurry should the need arise, as well as enough money for any emergency that might come up such as - you lose your job and you need to buy enough food for three months, medical emergencies, natural disasters, lets say the power goes out and you can’t use an ATM and you need exact change at the store because their credit card machines are out... the list of reasons for having available cash could go on, but I think you get the idea. Now here is some more bad news about being a cash and carry person in the United States - again, this is a fact - should some one accuse you of something illegal, or some one just doesn’t like you and they know you keep a lot of cash at home, and they want to get you in trouble with the authorities, all they have to do is say you are dealing drugs - without even an investigation a SWAT team will break down your doors and take all your hard earned, honest money away. If you have no receipts for it, it was gained illegally as far as the law is concerned - ask Tommy Chong - and once you have been labeled a drug dealer in the U.S. it is a reputation that is very hard to beat and even harder to disprove of in court - because the authorities need to justify the millions of dollars of tax payer money to fight their war on drugs - they have to make it look like they are winning by arresting whomever they can - like weekend marijuana smokers and people who carry lots of cash - I found this hard to believe until I started researching the subject - it will scare you and make you angry at the same time  if  you were to read all the stories of people who are paying the price for having cash and not being able to prove that they did not get it from illegal means... (look up civil forfeiture)...but seriously people, after the fiasco of the last couple of years with all these big banks being bailed out by the citizens - do you really want them taking care of your money? They obviously do not know how to manage money - and isn’t that their job - let’s reward them for doing a very crappy job! - I don’t trust them - I learned my lesson about banks a long time ago. Nobody but me knows what is best for me and I know where to invest my money and how it should be spent better than any government or banker does. Cash is King. Money talks. These statements will always be true.

I do not use credit cards, though it is a good idea to keep one around - though you should use it only when it is absolutely necessary - traveling, for instance, when you need to check into a hotel or rent a car and as a last resort to pay for emergencies, but never, ever use it for every day purchases, or to buy the useless crap that is being peddled on t.v. - you do not need that big screen television set - and if you do, pay for it in cash, if you can’t afford to pay cash for it, then you can’t afford it. Credit cards create slaves, they do not create wealth. Most everyone that uses credit cards is in debt, they only pay the minimum on their payments, which is basically the interest on their “loan” but you are still left with that ever increasing amount of debt from the purchases you make - you will never be able to get out of that ruble once you start - Pay off your credit cards as soon as possible, make this the first step you take in changing your life for the better and start creating wealth, step two is to destroy all your credit cards and start using cash. Simplify your life and start saving money - Do you have a big s.u.v. that is eating up too much money on gas and insurance? Get rid of it and find something small and dependable that will not turn you into a slave to it - your automobile  should be a tool to make your life easier not to make it more difficult - and once you have found something sensible to drive... you drive that damn thing until the tires fall off and the engine explodes... drive that car until it can’t be driven anymore before you get rid of it and buy another - you hold on to that car for twenty... thirty... forty years... take care of it and make it last for a long as you can.

School. Many people will not agree with what I am about to say - but I will say it anyway - going to Collage isn’t worth the pain and the money if you can not afford to pay cash for it - that’s right, cash - why in the hell would you want to start your life as an adult in debt? Know how long it took me to pay of my loan? Too damn long with too much interest... and it was not worth it - my suggestion is to go to a trade school for a couple of years and work part time as you do so, stay at your parents home until you finish school and when your done start earning money in your field. Learn a trade that you can take with you anywhere in the world and be able to make money from it - that is being independent... that is being free, but never, ever get a loan that will take you a life time to pay off.  Do we have to get into mortgages now... I think you’ve learned your lesson from getting a mortgage to buy a house. Do you get the picture? Debt does not create wealth - it creates slaves - don’t be a slave - be creative, and create wealth.

 1. If I can’t afford to pay for it with cash - I can’t afford it.
 2. Keep enough cash on hand to split town at the last minute.
 3. Keep enough cash at home for emergencies.
 4. Do not trust a bank with my money - unless that bank is in Liechtenstein.
 5. Do not use credit cards.
 6. Do not take out loans.
 7. Do not get into debt.
 8. Buy only the things I need - since I already have the things I need, the money I spend goes only to pay for food, and shelter - everything else goes into the yacht fund.
 9. Remember, you can control how your money is spent
10. Be frugal.
11. Everything is negotiable.
12. Simplify my needs.
13. Remember, money is a tool - you use money, money does not use you.
14. Be happy and grateful for the money you have and the money that comes your way.
15. Tip big - this is the one area where you should not be frugal with your money - tip big! the          Karma will come back to you - I learned this as a waiter whenever I tipped big, I always got big tips in return!
16. Give to the needy - Karma - what goes around, comes around.
17. Do not flaunt your success, and your wealth - nobody can take away from you what they do       not know you have.
18. Earning money is easier if you earn it doing something you are truly passionate about.
19. The love of money is the root of all evil - this goes with rule #13.
20. Convert what you can into gold and silver while you can.
21. Cash is King - Money talks.


Simon said...

These are my exact thoughts on money and debt.

I got in debt once when I was young and foolish, and then eventually got myself out of it through work and being as frugal as a monk. It wasn't a great deal of debt, but that only made it even more foolish. Once I had paid it off I swore to never get in debt again, and I've kept to it. Like you, I don't have a credit card, even though I know I probably should, just for emergencies.

Many years later and I'm much better off financially, and I still drive around in a nearly twenty year old pick up truck. Nothing flashy for me.

In addition to the cash only rule, my father once told me some advice he learned from a friend who had done well in business. He said he would only buy something, only if he could afford to pay for *two*. He lived by this rule very strictly, and he said it helped him particularly when it came to buying the expensive things like a home or a car.

But yes, cash is king, and avoid debt. "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves."

dash deringer said...

"Only if he could afford two..." that's a good rule - I'm taking it - thanks.

When I was in Chicago and got back on my feet again, I would buy everything in pairs - at a time - two white shirts, two trousers, two pairs of shoes, two suits... it had become a habit as I rebuilt my life... I would buy double at the market and began stockpiling my pantry... just in case I lost it all again... actually... when I go hiking and camping I double up on most everything - I use the two is one, one is none philosophy in that department...

One of the richest men I know drives an old pick up truck that is ugly as sin - he has one of the nicest boats I have ever been on... but you wouldn't know it was his to look at the man.