As I mentioned in my goals post for 2010, we are attempting to pay down outstanding debt as quickly as possible. The simple reason is that debt = slavery, in another form.
Think of it this way. If you had no debt, would you go to work at the employer you have now? I don’t know about you, but I would rather want to be able to make a choice on what I want to do with my day, rather than someone else telling me what to do. If you think that self-employment is the way to break this bond of slavery, then you are sadly mistaken. Until you pay off all of your outstanding debt that you took out to service your company, you are still chained to working until it is paid off. Debt is a contract that you enter into with a financial institution that you must honour, by law. It is a burden that must be repaid.
So, to be truly free, we must become debt free, and owe nothing to anyone in the form of loans that bare interest. No Debt = Freedom.
To that end, are paying off our personal debt as quickly as possible with a view to being free! By the end of March we will have paid off the personal loan I took out for the Solar PV system, one year ahead of the loan term of 4 years. This will save use about $1000 in interest alone achieved by using the savings in electricity over the term of the loan to pay down extra off of the principle. Renewable energy is the only investment I know that pays for itself! So once this debt is paid out, we basically have free electricity.
With the surplus funds, we are then paying down our remaining mortgage. We have calculated that we can pay off the loan in 5 and a half years. With no other outstanding debt, that will make me a free man! As I have a military pension that will cover off basic expenses, I will only need a part time job, with the choice being mine alone on what I do and how many hours I work. I am very excited by this notion. Knowing that our frugal lifestyle and low expenses have gone a long way to achieving this goal, I am so glad I had my green epiphany when I did. Little did I realise that when I realised that by reducing consumption I was actually lowering my environmental footprint, and in the process, lowering my craving for debt. With all things being equal, I will be 51 when I semi-retire.
Unfortuantely, if everyone in the world paid off their debt, our current economic system would collapse;
“The entire world economy rests on the consumer; if he ever stops spending money he doesn’t have on things he doesn’t need — we’re done for.” – Bill Bonner
Our entire society has a foundation of money = debt, and the we rely on growth at all costs to continue funding this lifestyle. As I have mentioned before, this is not sustainable in the foreseeable future. Growth at all costs means having unlimited resources, which is something our planet is not able to provide us with. We live in a finite world that has boundaries and thresholds, many of which we have already crossed to the detriment of other species who co-exist with us on this big blue/green marble.
“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” – Kenneth Boulding, economist
For a better understanding of how money is created, pop on over to Mia’s blog, “Becoming a Good Human”, and reading this post titled “Economy #1: How Money is Created”, and the follow up post “Economy #4: The Debt Trap (Our Economic System is not Sustainable)
Both posts make for enlightening reading. It is partly because of the way our current economic system works, that our world leaders failed to act on climate change at Copenhagen. This is because they do not have the courage to change the very system that got us into this mess, as they realise that by curbing growth, the system as it stands, would collapse. Growth at all costs would have to be curtailed and the wealthier citizens of the world would have to stop shopping until they dropped to reduce excessive carbon emissions. With the current reality that money = debt, then this is looking like a slim prospect indeed. We only have one home, and we are using it up at an alarming rate.
Whilst I will be personally happy not having any debt, I still worry that our society is still geared as if we are partying like it is 1999! I don’t know the answers, but I do know we are in for a bumpy ride, very quickly.