Chip Wilson's Blog

In 1880, P.T. Barnum published his book “The Art of Money Getting.” In it he states that “the road to wealth is as plain as the road to the mill. It consists simply in expending less than we earn.” A profound statement that still rings true today. We are all aware that accumulating debt is not the way to wealth and freedom. So, why do we continue to live above of our income? Barnum answers this as well “The real comforts of life cost but a small portion of what most of us can earn, it is the eyes of others and not our own eyes which ruin us.” It seems that in our society, it is more important to be seen to have money than it is to actually have it.

According to the Federal Reserve, the credit card debt of American consumers reached the $1 trillion mark in October 2008. That’s a 25% increase over a five year span. Add in $10.54 trillion in mortgages as well as auto loans and we’re looking at some serious debt issues. It’s difficult to accumulate any kind of wealth when we’re working just to meet our monthly obligations.

The Secret: Debt Is Not The Problem, But A Symptom

Many financial professionals will advise you to reduce your debt by paying down your high interest credit cards first and then move down the list. This is good advice and I highly recommend it. The problem, however, is not so much the debt as it is your money beliefs. Without identifying and resolving your beliefs about wealth and money you’re likely to end up in the same position down the road.

To give you an example, an acquaintance of mine, an accountant, managed the finances of small and large corporations. He was diligent in balancing the books, advising on financial strategy and the companies did well. His personal finances, however, told a different story. He was in debt, had few investments, and never balanced his checkbook. He knew what to do but his limiting beliefs about personal wealth and money held him back.

Behavioral experts tell us that our beliefs about money are predominately established around the ages of 7 to 10 years old. If you pick up a negative belief system about money during childhood, you’re likely to carry them into adulthood unless they are examined and corrected. My accountant friend discovered that his childhood beliefs about wealth sprang from an anti-business, pro-union background that saw all rich people as thieves and crooks. Not really the belief system of someone who desires to become wealthy.

As Barnum states “You cannot accumulate a fortune by taking the road that leads to poverty. Debt robs a man of his self-respect, and makes him almost despise himself. Grunting and groaning and working for what he has eaten up or worn out, and now when he is called upon to pay up, he has nothing to show for his money.”

Life is about choices. Do you want to be seen to have wealth or would you rather have it?  No matter where you are starting, choose today to live debt free.

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