Let me ask you this question. If you had no debt, would you work at the employer you have now? Would you downshift and work less? Would you seek to be creative in something you really enjoy regardless of the pay packet?
I don’t know about you, but I would rather choose 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 may be sadly mistaken.
Until you pay off all of your outstanding debt that you borrow 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 one way or another and are shackled to whomever you owe the debt to.
So, to be truly free, we must become debt free and not owe anything to anyone in the form of loans that bear interest. Therefore, no debt equals freedom, in my mind.
To that end, we have been paying down our personal debt as quickly as possible with a view to being free! At the start of our sustainable living journey, we took out a personal loan to pay for the Solar PV system over the term of 4 years. We paid it off in one and a half years! This saved us about $1500 in interest. How did we do it? Well we used the saving achieved on our electricity bills over the term of the loan to pay down extra off the principle. The beauty is that renewable energy is the only investment I know that pays for itself! So now that this debt is paid out, we basically have free electricity. Same goes for the solar hot water which is free for eight months of the year, as does all the cheap, organic food we grow.
With the surplus funds that we gained after paying off this personal loan, we are then paying down our remaining mortgage quickly. We now have about two and a half years to go and the house is ours. We are putting every spare cent we can into this debt reduction. We do have a credit card, but it is paid off monthly, within the free interest period.
With no other outstanding debt, that will make me a free man! What about other expenses, I hear you say? 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. We plan to ramp up our Little Green Workshops business and spread the work near and far around Greater Melbourne! Yay.
Knowing that our frugal lifestyle and low expenses have gone a very long way to achieving this goal, I am so glad I had my green epiphany when I did.
Little did I realise 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 52’ish when I semi-retire. Not bad for a born again middle aged hippy!
“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 we rely on growth at all costs to continue funding this lifestyle. I have mentioned before, this is not sustainable in the foreseeable future, and we need Degrowth now. 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 Earth.
“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, check out Chris Martenson’s Crash Course which is free and will give you a better understanding of how our economy works and why it relies on growth at all costs. The course will take you a bit of time, but it is well worth it. I refer back to it regularly.
It is partly because of the way our current economic system works, that our world leaders failed to act on climate change at a global level.
This may be 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.
As the current economic reality is that money equals debt and the abundance of cheap oil has kept our economy growing, which is coming to an end, then greenhouse gas reduction is looking like a slim prospect indeed without collapse because we will not be able to afford the actions required. Either that or a collapse just stops us from polluting anyway.
“We’re in a giant car heading towards a brick wall and everyone’s arguing over where they’re going to sit.” ~ David Suzuki, Elder.
Whilst I will be personally very happy not to have any debt, I still worry that our society is still geared as if we are partying like it is 1999!
I believe that the economic issues of the year 2008 was only a small glimpse of what may confront us in the near future as resources deplete (e.g. oil, food, minerals) and growth stops and hits reverse gear.