Personal finance is certainly not one of America’s strong points and as you dig into personal finance it becomes clear that the entire system is devised to keep you in dept. The conspiracy theorist in me starts to believe that it is all a sham and that the system is designed to keep me in debt and working for the man. Lets take a quick look at the different kinds of debt and how we can avoid getting in over our head.
First off CREDIT CARDS – We all know about how monumentally damaging credit card debt can be so I am not going to go too far into depth about credit card debt. My feeling is that if you seriously consider credit cards a reasonable option then entrepreneurship is not for you or you are much more responsible than me.
AUTO LOANS – Stay away….. Auto loans are nearly as destructive to personal finance as credit cards. There is a common myth out there that you have to have a car and that you need the latest and greatest car with all the fancy gadgets and safety features. Car loans are designed to keep you upside down and in a position of paying interest. The terms of the loan are just long enough that you will most likely trade in your vehicle before the payoff date and find yourself that much deeper in debt. Auto loans do nothing more than add another layer of freedom loss and commitment to keeping a stable job.
TAXES!!!! – God I hate them and if there is a good way to avoid them I haven’t figured it out yet but this will be a focus of future scrutiny. What I have learned is that you need to pay them on time and you need to make sure that you are keeping up with your tax burden. Waiting to find out if you need to pay or get a refund until April 15th is a ridiculous way to approach your single biggest expense. Paying a good accountant to keep up with things is well worth the headache and expense.
Entrepreneurs need to have the ability and flexibility to make decisions. Many of the stresses and frustrations of the current masses are directly tied to this lack of flexibility. If you can’t make decisions you don’t have any options and you are most like likely risk averse. As an entrepreneur risk is in your blood and and you need to remove the overhead that will prevent you from taking risks.