The following is part of Real Men, Real Dads ongoing series, called Daddy on a Budget.

Debt is a Last Resort

For the longest time, I have known that the typical way of thinking for lower and middle class families is broken. I am not a financial genius. I am far from it, in fact. Simply put, I knew that rich people got rich for a reason and that those rich individuals had no desire of bringing anyone from the lesser classes into the fold unless it benefitted the rich.

Debt is one thing I challenged early on, even as I was spending like a typical person with a low financial IQ. I challenged the notion that a house, with compounded interest over 30 years, was a good investment. I mean seriously, if you buy a house for $110,000 but pay $240,000 at the end of your 30-year term for it (not including utilities, repairs, etc), how can you consider this a good investment? Your house might be worth the final $240,000, but is that including all of the extra expenses and inflation?

Debt is a method that rich people use to get rich… by preying on the poor. The biggest lie ever told was that a house is an ASSET. The typical middle class family’s biggest liability is their home. Don’t even get me started on credit cards.

What has increasingly worried me over the years as I have become wiser financially is the notion that a person should have credit in order to have good credit! What a load! You mean to tell me that in order for me to get a loan, I must first have debt to begin with? How does that make sense? Debt should be managed intelligently out of necessity, and should be granted based on your LACK of debt compared to income, ability to pay the debt back, and length of employment or income stream.