You Ain't Rich if You Owe!

You Owe It to Yourself

The premise of being rich implies that you are financially free. Many assume that your wealth or assets are unencumbered. Can you truly be rich if you are indebted/ owe a debtor? There are two common perspectives surrounding this theory. The first perspective is you ARE NOT truly financially free if you are indebted to a creditor. The opposing perspective suggests that you ARE financially free if your net worth exceeds your immediate and long-term expenses.

What is Freedom, Really?

My grandmother always told me, “as long as you have good coffee, fresh flowers, and nice soap, you can live like you’re rich”. I wholeheartedly believed this at the time, because I was a child and assumed everything my grandmother said was law. However, my adult interpretation of the intent of her lesson is that the ability to choose, the blessing of having functional senses, and capability to purchase desired items are underrated luxuries that make one feel empowered (not rich). My grandmother could only give me her elucidation of what it feels like to be rich because she believed that simple living is indicative of wealth fulfillment.

In Time

A simple life for most, is a lifestyle, it is a mind state, it means you do not have to account for your time. For most people, unencumbered time is the ultimate luxury. When you do not have to account for your time, you can spend it any way you desire. Alternatively, if you owe someone money (like say, a bill collector), you have a heavy burden you must satisfy prior to getting some rest. Owing people induces mental exhaustion. Additionally, owing people requires you to get your ass up, get out of your comfort zone, and do whatever it takes to free yourself from that mental exhaustion. If you owe me money and you are nonchalant about repaying me, it’ll be the last dollar I’d ever lend you (credit bureaus refer to this as creditworthiness). Thus, I pose the question: are you truly rich if you have immediate and/ or long-term liabilities that obligate you to allocate a portion of your time to repay your debt?

The movie “In Time” starring Justin Timberlake, depicts what happens to society if time were used as currency. In the movie, people began to buy back their time. Wealthy people had time to spare, time to spend, time to waste, and time to give. Poverty-stricken people were always in a rush to experience life or enjoy liesure time. There was never enough time and folks literally worked to live because they knew once the clock expires, so will they.

If you are in debt, you owe someone your time. The same “time” you will spend working for the money to pay them back. If you pay bills, you are paying with your time. Time is money.

Lease to Own

The word mortgage is comprised of two root words: Mort, which is the latin root word for death. And the Archiaic word gage, meaning to make deposits as a guarantee of good faith. In essense a mortgage requires you to make payments on asset until you die. What part of the game is this? I thought an asset was supposed to produce money, not cost you money.

Many people confuse being rich with having an asset(s). If there is a promissory note (promise to pay) attached to the asset, you are simply the manager with privileges to use said asset. I even had a hard time shifting my paradigm when it came to understanding this concept because I simply didn’t want to accept that true ownership means that you have an unencumbered asset that you can leverage to extract full value. This changed the way I personally evaluate wealth. If income/assets are attached to debt, only the equity of the asset can be considered to be of value. Everything else is neutralized.

But then again, I could be wrong. Open to have the convo. What are your thoughts?