The law of attraction and what the bank didn’t say about wealth creation “Spend, borrow; borrow, spend,” demanded the bankers. “No loans, slow loans, bad loans, no problem. If you own your own home, we have a loan for you. No equity required.”
We see it every day, a new way to borrow money, expand your credit card limits, or leverage the equity in your home, and the great things you can buy with that newfound wealth. Building wealth without working for it on an unprecedented scale. Where the impact of this additional credit and its repayment was hardly considered. Since greed is good, have now, pay later, we have been programmed by the media at all levels. Private debt has now become a major problem and any economic downturn and associated drop in employment will have a direct impact, let alone a round of rate hikes.
No wonder the number of bankruptcies has risen to a level ten times higher than a few decades ago. In a crisis that has never happened before in the financial world. Computer modeling, which said there was little risk, has holes wide enough for trucks to drive through. It’s spreading out of America and engulfing areas of the financial world that have never been affected before. With foreclosure disasters unfolding every day, the lenders with loose pockets are now reaping what they sow. The indebtedness of some banks leads to runs on their capital, forcing the government to intervene with public money to contain cash flows.
Gary Eldred PhD, a professor of real estate at Trump University, put it that way.
Weakness of will and financial discipline
- When they adopted the sales approach, bankers knew that millions of people would seize the opportunity to spend and borrow, and then later ponder the destructive consequences.
- Because let’s face facts. Home equity loans will subdue your ability to build wealth. If you use it, only use it for productive investments that offer low risk for good returns. (As the old advice goes, “Never stop seeding.”) The home equity data overwhelmingly shows that borrowers most often put the money they borrowed into consumer spending, including imprudent home renovations or extensive trips abroad.
- What about consolidating your bills or paying high interest rate credit card balances? Again, caution says no. Instead of paying less interest, this approach often results in even more debt. Why? Because borrowers who pack their credit card balances and other bills into home equity loans (or refinances) temporarily minimize debt pain. But with a longer term and lower payment, debt causes higher costs in the long term. Worse still, many borrowers immediately roll their credit card balances back to where they were before.
“Thank God the house went up $10,000 in value last year,” they think. But in the meantime, the wealth destruction continues.
Don’t get caught in this situation, use the powers of the Universal Laws and the Law of Attraction to build your own wealth so you don’t have to borrow beyond your ability to repay. Build your own goals, don’t let others build your goals for you by including you in their goals where what they have in store for you is little and more likely “but living in debt”. .