Math has never been my strongest subject, although I should be good at it, considering I hold a Computer Science Degree.  Still this didn’t stop me from learning a valuable lesson in  my 9th grade Algebra class, which had saved me from a lifetime of indentured servitude.  It’s called compound interest, and here is the equation on how to calculate interest,

A = Amount of money accumulated after n years
P = Principal amount (the initial amount borrowed or deposited)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for
n = number of times the interest is compounded per year

So let’s say you took a loan for 400k at an interest rate of 4% for 30 years compounded monthly

You would end up paying $1,325,399.21 on your 400k loan, even with a great interest rate of 4%.  Now if I sold you a computer for $3000, but it actually cost $1000, then I believe you would take a bat to my head.  So if you thought that was crazy, then how could anyone in there right mind take out a loan for a home, a car, or use their credit card.  How did our society become populated with people who like to pay double for everything, I want to know where these people are at because I’d like to sell them a computer.

So ever since that algebra class it always made sense for me to stay away from debt, because I’m not a fan of giving away free money. If anyone gets my money, they better work for it with their blood, sweat, and tears, or it’s curtains for them.  But during most of my adult life everyone has always been hassling me about building my credit.  Did they really believe that credit would do them any good? Instead of feeling the instant gratification of buying what they want now, they could’ve waited  and paid for that baby in cold hard cash.  All credit does is qualify you to take on more debt, because the credit card companies prefers that you to take baby steps into your life time of debt slavery. This is why I believe that financial worth should be gauged by how well a person pays off their utilities, rent, and taxes.  But our society as a whole has fallen into this big scam, and we know this because they put this drivvel into our college textbooks.  Not even the educated was smart enough to predict the debt crisis we currently are in, and that’s because none of them are as smart as me.

Also this might sound like a surprise to people, but theoretically, debt in the end cannot be repaid. let’s say you live on an island, and the currency of the island are rocks. There are only a limited amount of these rocks, you can’t make more of them, basically it’s rare and valuable. All these rocks are initially owned by one man in the tribe called Ben Bernenke, and he loans these rocks out to every person in the tribe with interest. Now if you can’t make any more of the rocks, then where do the tribes people get the interest to pay Ben Bernenke back. They can’t, and they will default from the loan losing everything.  Then Ben Bernenke will hurl his rocks at the family and rock them to death, then he’ll mash them all up into a nice pudding then fly away on his helicopter.

So how to solve this problem? well the only way to solve it is to create more rocks for the island, which inflates it’s values. Soon the rocks will be so worthless, they’ll be using it for a toilet paper substitute. That’s what the Federal Reserve does in America, they print money to make up for the fact that people can’t pay back their debts. But because they don’t want to inflate the currency too much, they borrow from osther countries such as China. So now China has America on a leash, the kinky kind with spike on them. It’s probably more complex than this, but I’m dumbing it down because I’m not an “economist”, and I’m trying to explain this idea of compound interest to all the algebra drop outs.

Every empire in history was built through cheap or free labor, and America is no exception.  It was through the sacrifice of slaves that helped our economy grow, but with slavery being abolished there needed to be a more creative approach. DEBT!!!  Now the wealthy can have their cake, and eat it too, but if it was up to me, I’d shove that cake right up their butt hole.  So open up your looking balls people, because if we continue down this path of infinite debt, we are all going to sink, although it looks like we’ve already sprung a leek.  And even though your job is recession proof, crime isn’t, so I hope you invested in a good security system.

So thinking back to my childhood, I’m glad that I learned about this miracle formula of compound interest.   It’s kept me from never going over my credit limit, and never having to pay a penny over market value.   My love affair with education has been the reason why I’m here today proclaiming a life free of debt.  I wish I could say the same for the rest of you sad sacks riddled with bills you can’t pay back.  If only those economists with their Masters Degrees could’ve warned you of the impending doom, but I feel they’ve been a victim of group think. But then again, if you weren’t smart enough to live a debt free life then you got what’s coming to you. Toodaloo!