Part I of this discussion ended by stating the mantra of the failed Debt Paradigm that so many Americans have been duped into subscribing to; “You can have everything you need and anything you want as long as you have enough credit.” This installment deals with the alternative to the Debt Paradigm we call the Money for Life Model.
The Debt Paradigm tells you that earning and borrowing have equal value in the wealth equation. This thinking, however, creates a money siphon that mortgages your future income and ultimately leads to severe financial stress or even bankruptcy. If I were more adept at blogging there would be a diagram here to illustrate this concept but let me at least try to elucidate with words.
Picture a bucket into which water is flowing - that’s your income going into your checking account. As time goes by, you dip water out of the bucket to take care of your needs and wants just as you take money out of a checking account to pay your bills. Eventually (in the Debt Paradigm) the money flowing into the bucket is less than the money flowing out. The bucket becomes empty. What happens next – and it usually happens before the bucket is empty – is the use of a new money source – credit – to pick up the shortfall of money flowing into the bucket. Aaah! Relief.
But is it really relief? It seems to be so because the new money source is large and friendly (at this point) and you are able to get the things you need and want. But, while this new money source is pouring money into your bucket, it is also installing a siphon with a variable valve attached to take money out. If you follow this paradigm to its logical conclusion, the siphon will eventually take most of the money out before you can spend it and the money source will stop pouring new money in and you will be left with a bucket that has an open siphon that takes your money before you can use it – bankruptcy.
The Money for Life Model changes this verbal picture only slightly. The Money for Life Model installs the siphon when you start pouring money into your bucket and siphons some of the money that comes into income your bucket into your “bank”. When the money coming in is less than the money going out you dip into your “bank” to make up the difference and open the siphon into your “bank” a bit more to replace wht you’ve taken out. This approach recycles your money instead of allowing debt dollars to flow in from credit grantors.
This approach to wealth building is much more than the outmoded “pay yourself first” axiom suggests. It is based on this idea but goes way beyond. If you would like to learn more about your debt siphon, visit www.TheMoneyForLifeBook.com and request your FREE copy of the exclusive white paper Why Budgets Don’t Work. (Of course you will also learn about the groundbreaking book Money for Life…in good times and bad. If your time is short, you can scrroll to the bottem of the page to order the report.)
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March 3, 2008 at 8:25 pm |
[...] poron wrote an interesting post today onHere’s a quick excerptPart I of this discussion ended by stating the mantra of the failed Debt Paradigm that so many Americans have been duped into subscribing to; “You can have everything you need and anything you want as long as you have enough credit.” This installment deals with the alternative to the Debt Paradigm we call the Money for Life Model. The Debt Paradigm tells you that earning and borrowing have equal value in the wealth equation. This thinking, however, creates a money siphon that mortgages your future income and ultimately leads to severe financial stress or even bankruptcy. If I were more adept at blogging there would be a diagram here to illustrate this concept but let me at least try to elucidate with words. Picture a bucket into which water is flowing - that’s your income going into your checking account. As time goes by, you dip water out of the bucket to take […] [...]