Living On A Prayer

You’re stuck running on a treadmill – working hard but can never really getting ahead. Your income is barely enough to live on, and you’re in need of some extra money to cover the bills and all manner of expenses. What’s the harm in borrowing a little money to get by? Next thing you know, you’re stuck in a loop of constantly having to borrow from Peter to pay back Paul.

A former workmate of mine made ends meet by living in perpetual debt. He would always request a salary advance within the first week of the month, a little after payday. Despite his reasonably great salary, he’d claim to need the money to cover legitimate expenses such as: school fees, rent, or medical bills. No judgement, life can get tough. However, he’d also borrow from everyone else – and I mean everyone, including the office cleaner. To make matters worse, he had the reputation of being a defaulter. He was a lender’s black hole, if he 'borrowed' any money from you, most assuredly, you were never getting it back.

I can’t tell you what his problem was, I can only speculate. Was he was living beyond his means, trying to maintain a lifestyle he couldn’t afford? Maybe he had amassed such a huge debt that the deductions left him with no breathing room, or maybe he had a gambling problem. Who knows? Whatever the case, borrowing became his way of life.

Desperation, recklessness and/or impulsivity tend to blind people to the consequences that always come with borrowing money. Most people (like my former workmate) tend to be shortsighted about their debts until the deductions start, or the loan sharks come-a-knocking, then reality sets in and true mourning begins. We’ve all heard stories of assets being lost, reputations or lives being destroyed because the borrower didn’t take into account the hidden fees, interest, and the penalties attached to the debt. Before signing-off on any loan agreement, take the time to read and understand all the terms and conditions, and have a clear repayment plan in place.

With that being said, not all debt is bad. As you’ve surmised, bad debt is like an anchor weighing you down, often taken in desperation with no immediate thoughts of repayment, and usually for the purposes of maintaining an unsustainable lifestyle. However, good debt is a bridge – supporting you to achieve meaningful growth and wealth-building, by increasing your earning potential through the purchase of one or more income generating assets. I explore this further in my article, Debt Done Differently – give it a read, to appreciate the nuances of good debt. Regardless, if you were ever to take on any debt, let it be a good one.

There’s a Kiswahili saying that perfectly encapsulates the issue of debt, “Borrowing is like a wedding, repaying is like mourning.”  While receiving money from a loan brings you hope and relief for a time, the repayment aspect is always painful, depressing, drawn-out, and difficult. So, if you must borrow, you’d be better off taking on a good debt, from a licensed lender, having understood the terms, with a clear repayment plan, and only borrowing what you need and can comfortably repay. Let your debt be a bridge, and not an anchor.


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