Do you believe ?
- When a friend or relative asks me to cosign a loan, it is right for me to help them.
- If a friend or relative asks me for a loan, I am helping them out when I loan them the money.
- When a low-income person cannot get a loan from a bank, it’s great that they can go to a cash advance store, or a car title loan company to get money.
- When you cannot afford to buy an item, rent-to-own stores are a great place to get the item you need.
- Gambling or playing the lottery will make me rich.
- I will always have a car payment.
- If I want a new car every two years, I should lease it.
- A new car is a great deal.
- A 30-year-mortgage is great because it has lower payments and I can always pay extra to pay it off early.
- Credit cards are a great way to earn points to get perks.
- My teen needs a credit card to learn how to handle money.
- My home equity loan is a good place to consolidate my debt or as my emergency fund.
- When I consolidate my debt, I only have one payment and I’ll save interest.
- I can become prosperous when I use debt as a tool to build wealth.
If you do, then you are not alone. However, these are lies. Let’s address each one.
When a friend or relative asks me to cosign a loan, it is right for me to help them.
When you cosign on a loan, you are more likely to end-up paying the debt. The financial institution has looked at this person’s credit history and financial irresponsibility and determined they are very likely to default on the loan. This is why they are asking for a cosigner. The bankers are not stupid. They want someone who will repay the loan to be “on-the-hook” when the person defaults. God warns us against cosigning.
Proverbs 17:18 – It’s stupid to guarantee someone else’s loan. (CEV)
Proverbs 22:26-27 – “Don’t guarantee to pay someone else’s debt. If you don’t have the money, you might lose your bed.
If a friend or relative asks me for a loan, I am helping them out when I loan them the money.
Do you remember Proverbs 22:7?
“The rich rules over the poor, and the borrower is the slave of the lender.”
When you loan money to a friend or relative, you are changing the dynamics of your relationship with them. They no longer think of you as their friend or relative. Now, they think of you as their master. They owe you. They feel responsible to you. If they are unable to pay you back, they start to avoid you. You too feel the change in the relationship. You now think of them as the deadbeat who won’t pay you back. Do you want to lose your friend or relative? If you don’t, then don’t loan them any money. If you can afford to, give them the money instead.
Another thing you can do for someone who can’t make ends meet and wants to borrow money is to have them come to this site. Or get them to do a Money Blueprint and to track their money on the Money Blueprint Binder. It’ll be an eye-opener for them to see how much outflow and inflow they have every month.
When a low-income person cannot get a loan from a bank, it’s great that they can go to a cash advance store, or a car title loan company to get money.
No, this is not a good thing. These places are a rip-off. They charge horrendous interest rates. These rates can go from 300% to 750%. These companies are predators. They prey on the poor. Car title loan companies loan on an average loan about $950 for 10 months. This means that the borrower pays back $2,140! Are you kidding me! This is highway robbery. Unfortunately, it is completely legal. The best thing is to avoid these places like the plagues that they are.
When you cannot afford to buy an item rent-to-own stores are a great place to get the item you need.
Don’t fall for this scam. When you rent-to-own, you are paying more for the item than if you were to save the money and pay for it all at once. Even though rent-to-own contracts are not loans and do not involve payment of interest rates, when factored-in, the equivalent interest rate may be 60 to 100 percent or higher than if you bought it outright. There might also be fees for items that are returned damaged. If you choose a higher number of payments, the total cost might sometimes double or triple the item’s original price.
Gambling or playing the lottery will make me rich.
What a crock of manure! Look at what the Wall Street Journal has to saying about gambling and winning:
“On any given day, the chances of emerging a winner aren’t too bad—the gamblers won money on 30% of the days they wagered. But continuing to gamble is a bad bet. Just 11% of players ended up in the black over the full period, and most of those pocketed less than $150.
The skew was even more pronounced when it came to heavy gamblers. Of the top 10% of bettors—those placing the largest number of total wagers over the two years—about 95% ended up losing money, some dropping tens of thousands of dollars. Big losers of more than $5,000 among these heavy gamblers outnumbered big winners by a staggering 128 to 1.
The analysis comes from a database containing anonymous records of 4,222 Internet gamblers who wagered on at least four days on casino-style games of chance such as blackjack, roulette and slots. They played between 2005 and 2007 on websites run by a major European online gambling concern, Bwin.Party Digital Entertainment PLC.”
No, gambling does not make you rich. It makes you poor.