Dotpreneur | Friday Financials


The Story | Lifestyle Choices : Debt-free living

Yesterday’s post was dubbed, “Lifestyle”. So much comes down to Lifestyle CHOICES, doesn’t it? We make a few and then get hemmed in by them.

Living with debt or living debt-free...

...Is also a lifestyle choice and we’re going to talk about that one a little bit today.

Before we get started, however, congratulate me on paying off my credit card debt. In fact, I had two credit cards in use and both are now brought to zero.

You can tell by that statement above that my personal lifestyle choice is to live debt-free, or at least as much as possible. I recognize that mortgages and education are investments and so I do view those two differently.

Last year, May 2018, I decided to go 100% digital in business. My primary motivations were to:

  • Have the freedom to live where I prefer rather than where my clients are; so, location independence.

It so happened that I’d been living and working with a clientele based in congested Barcelona, Spain for too many years. In fact, the story I’d come to believe was that I was stuck in Barcelona because my clients were/are. I changed the story.

  •  Have the freedom to be close(r) to my family.
  • Have the freedom to scale my income upward rather than remain capped according to how many one-time face-to-face hours I worked.
  • I’m getting older (who isn’t) and I want very much to enjoy the remaining years and as fully and passionately as possible.

So, bitten by the dotpreneurial bug, I hastened to build as quickly as possible. Typical aspects of my personality (in some contexts) is being proactive, moving toward the benefits I perceive are possible.

Strangled and Stifled

I let my zeal and newfound vision to go 100% digital cause me to over-ride my inner voice and put business expenses that I couldn’t afford onto my credit card. The infamous, deathly credit card. And then this purchasing snowballed a bit as one expense required another.

By the 12th month of my new adventures, I felt strangled, stifled, increasingly joyless as my earnings got tagged for past purchases rather than for future vision.

Debt created obligations that I felt pressured to fulfil; very real pressures, that reduced my agility and inner calm – that place from which I most prefer to work and create.

Fed up, I determined to approach business growth in new ways, which ways I’ll develop in these posts as time goes by and as revenue justifies. I then paid the obligations in full.

One of these ways is accepting slow but steady growth. Nobody likes anything slow these days. But I’ve been duly influenced by the Sards* around me who do, in fact, value slow growth just as they value 0-kilometer foods, craftsmanship, and longterm relationships. The Sards also lay claim to the fact that they have the largest populations of Centenarians in the world, just after Okinawa, Japan.

Perhaps there is a correlation between healthy longevity and old-fashioned foods that require slow growth, walks to the beach, and leisurely swims in the sea.

At any rate, you cannot imagine how successful it makes me feel to have zero debt on any/all revolving credit cards. Agreed, zero debt is not a visible, flashy personal freedom. It’s not a flashy pair of new dance shoes or a fabulous phablet or a new car (that is only new for 12 months or less).

Do you know what debt-free is?

Living debt-free is a continual sigh of relief.

Living debt-free is an authentic quick and ready smile.

Living debt-free is taking one’s time with one’s clients rather than funneling them through like parts and pieces on a conveyor belt.

Living debt-free allows one to focus where and when they want, as they want.

Living debt-free means time to learn fun new skills like Salsa dancing and/or a new sport, like pádel.

So there is something you will never hear me advocate, and that is that my (or anyone else’s services or products) are so great that you should go into debt to obtain them. They aren’t. And they aren’t worth your personal freedom and self-sovereignty to get them.

How To Use Debt

Debt is to leverage. Debt should be incurred if your cash reserves allow you full freedom to repay the debt should the creditor knock on your door tomorrow and cancel the loan. But, if you’d be up Shit Creek without a paddle if they came knocking on your door with demands in hand? Then skip the debt. It’s not worth your peace of mind or your freedom.

The extent of the debt you incur needs to be limited by the extent of your cash reserves.

People talk a lot about financial freedom as if it only implies the freedom to buy whatever you want when you want.

For me, financial freedom, more importantly, means the freedom to live without your earnings being automatically and systematically tapped by someone who has legal claim over them, in full or in part.

So, as I said at the start, congratulate me for retiring all my credit card debt this month.

Now, just for curiosity's sake, here are statistics from reliable sources regarding debt around the world, including the United States. Read the averages and see how you stack up against them.

Also, remember that statistics are tricky. For example, imagine that, together, you and I both have one whole chicken, but, I eat all of it and you eat none; on average, you ate half the chicken. Bon Appetit!

So, keep that in mind as you read below. An average debt of $4000USD per month, that indicates that some people may have $0 debt while others have $8,000 or even more. These statistics also don’t tell you how many credit cards any one person has. Some people may have one card; others may have three or five.

Here is the information from Lexington Law, 21 Jun, 2019:

“In quarter four of 2018, America owed a total of $870 billion in credit card debt alone — a 5 percent increase from 2017. When other sources of revolving consumer credit are factored in, Americans owe a total of $1.057 trillion as of March of 2019. The outstanding revolving consumer credit debt is growing at a staggering rate…”

Also, from Lexington Law:

Chart: Credit Card Debt by Age

18–22: $738

23–27: $1,469

28–32: $2,356

33–37: $3,050

38–42: $3,659

43–47: $4,000

48–52: $3,910

53–57: $3,586

58–62: $3,116

63–67: $2,711

68–72: $2,282

73–77: $1,727

>77: $962

Chart: Credit Card Debt by Generation

Generation Z: $2,047 average credit card debt

Generation Y: $4,315 average credit card debt

Generation X: $7,750 average credit card debt

Baby Boomers: $7,550 average credit card debt

Silent Generation: $4,613 average credit card debt

Chart: Credit Card Debt by my own“home” States

California: $6,481

Texas: $6,902

Washington: $6,592

And finally, from the OECD: Where the world’s biggest savers live:

And a version from Investopedia:

Which lifestyle do you prefer?

Sards referenced twice in this text refers to the local and native population of the inhabitants on the Mediterranean island of Sardenya,also spelled, Sardinia.


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