Debt and Doubt

I have being paying very close attention to the money markets this last week. I jumped up for joy when Gold surged up a $100.00, and was very happy when Oil tumbled $10.00. I was also somewhat happy when our Dollar started climbing up again against the U.S. Dollar, and somewhat dismayed and angered when both Oil prices and Charted Bank Rates stayed stable throughout this time of volatility for the consumer. But the one redeeming quality that I have going for me is I do not owe anyone of the non-governmental parasites anything in terms of borrowed money. My vow not to take on debt since 2002 has more than paid off in losses and untold charges. By my estimates, based on a calculation I did in one of my economics classes back in 2006, my saving since 2002 have being roughly $94,000.00 +/- 8%. But that is not the complete story of why I am so very grateful that I took that vow of money borrowing celibacy, to use a human inaction to coin my statement with.

To put things into perspective for you, a little back story is needed.  I weaned myself off the Banks in 2004, starting in 2002 from taking a Sociology experiment in one of my first year classes at the then Kwantlen University College. The deal was simple, the challenge was like this: we were to find out if it were possible to remove ourselves from having any attachment with the Banks, including all financial institutions, and see if it was possible to continue living a normal life, or continuing on with our current life style in Canadian society. This experiment meant taking on some very powerful myths about our society today. There was a leap, if you could call it that, of removing, as we called it, the unnecessary costs from within our personal financial sphere. The challenges were huge at the beginning, but with the some thorough research, the path was very quickly obtainable, and life went on without any bumps. There was also many books and papers published that we could use as model in our experiment, so the idea was not new.

My two biggest challenges was first, how to get paid, and secondly, how to buy really big ticket items like my university education. Both were accomplished with some personal sacrifices. In university, I could easily pay as I go, paying for each semester before hand. That worked out very well. Plus, I paid cash for everything. Just think of 16 small cash payments equalling up to $21,000.00 and another series of “point to point” purchases for text books equalling up to $8,000.00, over that same period of time-I have no troubles whatsoever working that kind of a system. The benefit, graduating with “ZERO” debt. Now the first point, cashing pay cheques, became a bit of a problem because you are tied to a financial institution with them.  In British Columbia, the Employment Standards Act says that an employer must pay in one of two ways, cash or Bank issued cheque. So, in a hurtful way, the law is not on your side if trying to limit contact with money lenders. And it seems the Banks love this, and they do their best to tie (reel) you in, and keep you there. And, from their point of view this makes sense as you, your service charges, account for over $40% of their revenue(CBCnews, 2006), so why would they want to make it easy for you to leave. But I am fair, and I understand that most employers are living on borrowed money to begin with, and it does cost money for banks to operated, so the compromise was to use the employer’s bank that he issued the cheque from, and cash the cheque and pay, in some cases up to $5.00 per cheque. Also, not all banks charge for this, as Banks like the Scotia Bank charge nothing, while Banks like the HSBC, RBC, CIBC, TD and Credit Unions charge up to $5.00 per cheque.

The outcome of the experiment is the concept of only paying for what you can afford. It is one thing to circumvent the Banks, and any other midpoint services, but another to start borrowing on items, or on property that you do not have at your ready. So saving and spending become key points. Saving is tricky because if you do not wish to use the banking industry, then this would leave a gaping hole, as to where, to put your hard, cold cash somewhere. The answer is as old as money itself, as I will later talk about that later on. Also Spending becomes an issue becuase of crime, and accidents. Who would want to carry huge amounts of money in their persons while walking down the streets going to a store?

The one thing that I did that was very controversial back in the day, 2004, was I started buying gold. Not jewellery, or paper stocks, but actual Gold coins that have been minted by the Canadian mint, called Canadian Maple-leaf Coins. In my opinion, buying jewellery and Gold stocks is the equivalent of throwing your money away becuase the value is handled through so many hands, who all exist by skimming a fee from your transactions of each item. Gold coins have the same problem, but becuase they are minted, and guaranteed of their purity, the dealer’s fees are way better than jewellery or paper. The most important fact about owning Gold is its value through turbulent times like this decade will drive it upwards. When the fear of inflation exists, the need to own Gold occurs. So investors dump their U.S. money in favour of commodities like Gold. My first lot of coins were bought at $250.00 a piece, but now their value is, today, $1740.00 per piece. I am getting at least two to three calls a week from fiends asking if I want to sell, as the Gold fever has gotten so hot. Expectations are that Gold will see a $2000.00 per once level by this fall. That is how much faith is in the markets right now.

I think I will stop here. I have talked about where the best place to store one’s wealth based on my experiences, and how to buy with cash, elsewhere on my blog. Just search around, those posts should be easy to find.

The markets are volatile and this volatility does not seem likely to be over soon. It is terrible that people are benefiting from so many who are suffering because of the market meltdown. But this is our culture, as we all believe in it, and capitalism, and free-enterprise, but we must also take it on the nose too.

One Thought on “Debt and Doubt

  1. Good Post. I remember that period in your life.

    When is a good time to give you a phone call tomorrow?

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