Comments on: Why I Will Never Borrow Money Again, Period.

By: stanleysamuel

stanleysamuel — Sat, 16 Jan 2010 00:03:50 +0000

I believe the root cause of the issue is that people do not have the discipline to manage money. Borrowing or not borrowing is not the issue.

By: Ryan Carver

Ryan Carver — Fri, 15 Jan 2010 07:54:34 +0000

Completely agree! I am a financial adviser and am going to try and instruct my clients this is the way to go.

By: Anonymous

Anonymous — Sat, 21 Apr 2007 05:33:00 +0000

Right on!!!! I am simply amazed when I look across the street and see the boats, SUV’s, travel trailers, motorhomes and ATV’s. At first I thought “those people must be dealing drugs to afford all those toys”. No they are not drug dealers, they are in debt up to their ears! If one of them loses their job it will be foreclosure and repo big time! We on the other had have been debt free with the exception of mortgages since 1970. We made our last mortgage payment in 1994 and bought 3 homes since that time for cash. How did we do it?? We didn’t make a lot of money but budgeted, saved and invested. No we did not starve to death. In fact we lived rather well and even took an occasional vacations.

By: Anonymous

Anonymous — Wed, 21 Feb 2007 17:26:00 +0000

Your example about paying $12,000 for a $10,000 car is deeply flawed. The reason is that you seem to ignore the time value of money. Simply put, $10,000 now is worth much more than $10,000 several years in the future, because of both inflation and opportunity costs. This works perfectly well *for* you too, as you can easily see when you save money in an interest bearing account so that you can buy the car outright in a few years. So by waiting a few years ’til you have more money saved, you still end up paying more than $10,000. And meanwhile, you won’t have use of a car. Same goes for buying a house, on a larger scale. There’s no real reason to make yourself suffer for years and years just to “avoid debt” (unless you have some religious objection to owing any money to anyone).

By: John

John — Wed, 21 Feb 2007 01:21:00 +0000

i earn $10/day performing arbitrage. not desirable enough for you? suit yourself.

By: MoneyMinx

MoneyMinx — Tue, 20 Feb 2007 17:49:00 +0000

I have found that my debit card is just as convenient as a credit card would be. Why open yourself up to all that risk when the credit card isn’t any more convenient? I agree with Matthew, there is NO benefit that credit cards offer that could induce me to getting one again. luv your site, btw.

By: harm

harm — Mon, 19 Feb 2007 21:07:00 +0000

I would think you could consider
carrying a credit card for
convenience, if you pay it off
every month. I don't really consider
one month worth of credit card
debt to be "borrowing money" though
of course it is, technically.

By: Matthew Paulson

Matthew Paulson — Mon, 19 Feb 2007 21:06:00 +0000

You're welcome. In the event that I was in a situation that you listed. Let's say, My car broke down and the cost to get it running again was $3,000.

I would probably just call up my back, have them transfer the money from my savings to my checking and use my debit card to pay for it. Most of the time they'll work with you if you tell them what the deal is.

My car personally is worth less than $3,000, in fact, it KBB's for about $1000. I'm in college, I don't need anything special. In the case that my car was totalled, I'd probably ride the bus home, fly home, or have my fiance come get me, and then go buy a new one once I get home.

By: James G.

James G. — Mon, 19 Feb 2007 21:01:00 +0000

Thanks for your response. I am genuinely curious though as to how you would deal with my hypothetical situation, since I beleive that it is a strong example of when emergency borrowing is needed.

You state that your bank could transfer funds to your checking account, but my original post stated that given ATM limits of < $1000 (which is the highest I've ever seen an institution allow) per day, you still couldn't access enough money to pay for your costs unless you waited several days. I doubt that many repair shops would accept a personal check for such a sum due to them being out of a lot of money if the check bounces.

In other words, I'm wondering what options you would exercise in this hypothetical situation if you are adamantly against using a credit card. Would you wait out the days? Rent a car somehow to drive to your closest bank?

By: Matthew Paulson

Matthew Paulson — Mon, 19 Feb 2007 20:20:00 +0000

That's fine that you disagree, you can handle your money how you chose, and I'll handle mine as I please.

The situation of being in some sort of mess while in vacation does happen on occasion, but there are always options. The banks I deal with have 24 hour customer service, and I could easily transfer money from my rainy-day savings account to my checking account with a simple phone call. It doesn't make sense to carry huge sums of cash with you, but it does make sense to keep your money available to you.

I just really haven't seen a situation where a person absolutely needs to borrow money.