DIY Debt Crisis

Debt is a claim against your future in exchange for money in the present. When you take on debt your future is diminished by the interest paid. Sadly, once in debt there are only three avenues of escape from this dreary fate:

  1. Invest the loan proceeds in something that will return more than the interest you have to pay (no different from buying stocks on margin).
  2. Save income and pay off the debt as soon as possible
  3. Default

It’s important to note that most people (and all governments) fail at #1 and #2, and #2 doesn’t prevent a diminished future, merely minimizes it.

That doesn’t leave many options.

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