Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows neither victory nor defeat.

Theodore Roosevelt, The Strenuous Life

By , on April 23, 2010

Managing Debt

I received some criticism for my prior post. What a redneck comment, eh? Well, the point was that we should carefully analyze the range of outcomes possible during the loan payback period, the likely probabilities of those outcomes, and decide what is best before signing promissory notes. Again, talk to people who have been through bankruptcy. You will find that loan indebtedness, based on signing mortgages, trust deeds, credit card slips, student loans, and other contracts are frequent precursors to the debt problems that make bankruptcy the best option. Caution, conservatism, and appreciation of likely benefits and risks are simply prudent. Risk can be lowered by incurring less debt (a less fancy car), by incurring debt less frequently through postponement, by assuring terms and conditions of the contract are reasonable (low interest), and by saving for some or all of your next big purchase before making it.

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