Why Earning More Money Won't Help You Get Out of Debt

By: RaymondAaron

Surprised at the title of this article? Just reading to see what kind of a madman would even say such a thing? Believe it or not, there is a very sound framework behind the statement that earning a larger income won't help you to get out of debt. What exactly is it all about?

Let's start with how people get into debt in the first place. People rarely go into debt over lack of money. That's important enough to say twice. People rarely go into debt over lack of money. This sounds counter intuitive at first, but it's true.

So what's the real reason 90+% of families and individuals go into debt. Easy: it's because they spend more than they actually have!

"Thanks for pointing out the obvious," you say. But what's not so obvious is that most people who are in over their heads didn't have to get in over their heads in the first place.

I've known a single mom who raised three kids on a teacher's salary, without any debt at all. I've also known several six-figure-a-year executives who were up to their eyeballs in debt. Clearly, the issue here wasn't who had "enough" money.

What was the issue here?

The real issue here is simply bad spending habits. All too many people spend more than they have via credit cards and loans--and then have trouble paying off those credit cards and loans (you may have noticed the effect this has had on the world financial situation).

The ultimate tragedy here is that 90+% of people and families who want to get out of debt, never had to get there in the first place. Certainly some people have had their financial situations adversely affected by sudden illness or accident. But almost everyone else who's in financial straits really didn't have to get there in the first place.

If you want to own your own home instead of rent, it's pretty much a guarantee that you're going to acquire some mortgage debt. The same is almost as true for owning a car.
Barring those two expenses, there is rarely any legitimate reason for anyone to spend in a way that puts them in debt.

In fact, if more people had fewer small debts, they could work at paying off the principle on their larger ones and end up saving a lot of money over time. Unfortunately, that rarely happens, and most families end up paying at least twice what their house cost, when all the interest fees are added up.

As you can see, one good reason to get out of debt is that all of your debts add up to be greater than the sum of their parts!

You can view this as a depressing fact that you'll just have to deal with--or you can use it as a wakeup call to start getting out of debt ASAP. The choice is up to you.

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Raymond Aaron is an internationally-famous dynamic professional speaker on the topic of DOUBLE YOUR INCOME DOING WHAT YOU LOVE.

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