Waging Generational Warfare Against Yourself

I just read a wonderful book called How They Succeeded.  I was struck by how many of the highly accomplished individuals interviewed mentioned staying out of debt as a key to success.  It’s obvious that being debt free has practical benefits like the ability to accumulate capital, the maintenance of good credit and a good reputation.  But these seemed rather simple and obvious and not enough to warrant the repeated advice.  None of them mentioned personal hygiene or other obvious practical disciplines, so why debt?

I think there are reasons beyond the practical and material for minimizing debt.  There is a psychological loss of freedom that can take place with the knowledge of debt hanging over ones head.  This can subtly subvert free-thinking and creativity and narrow the lens through which one sees the world.

This is probably not the case for everyone in every circumstance.  If you’re involved in lots of business endeavors where you need to operate on credit you may be very comfortable with and adept at handling debt.  I know people who do not seem to have any trouble with a constantly fluctuating personal balance sheet.  It’s not that way for me.  I definitely feel the steady pressure of debt like white noise in the background of all I do.

On the one hand, it seems odd that debt would be problematic.  Borrowing money from the probable excess of the future to subsidize consumption of the tighter present can make financial sense and result in an overall increase in enjoyment of life.  Indeed, if we never changed or grew and our preferences were the same through time, debt would make perfect sense as a way to smooth the ups and downs of material pleasures.  But that’s just it, we change.

This excellent blog post about doing what you love mentions being stuck with the career choices made by your teenage self.  If you are determined to be a lawyer or a doctor at a young age and persist down that path at some point you may realize you no longer enjoy it, but your options have narrowed with your skill set.  You are a captive to the choices of your earlier self.  It’s no different with consumption decisions than educational or career decisions.  Going in to debt is a way for your present self to borrow from your future self.  Think about the level of presumption.  Are you really confident your future self will be the type of person who would think it a good idea?  Might they have other uses to put the debt payments to?

When you go into debt, you are binding another person – your future self – to subsidize the desires of your present self.  It may be a good idea in some cases, but it warrants very careful consideration.  It’s not merely a question of whether your future self will have the resources to subsidize your present preferences; it’s also a question of whether you’ll be happy about doing it.  I don’t want to be bitter at my former self for the financial obligations I have.  I’d rather the self of the past, present and future work together towards the fulfillment of our individual and shared life goals.

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