How My Debt Makes Me a Slave in the Modern World

PROBLEM #25: I Feel Like My Debt Makes Me a Slave to My Bank.

What’s the first thing that comes to mind when someone mentions slavery? Do you think of a racially charged movie? Maybe you think of the historical prejudice of owning a human being just because of their skin color or where they came from? Do you think of rich folks treating others like property? Or do you think of someone, anyone in bondage?

I think that slavery is still alive and well. You are most likely enslaved. Maybe you don’t feel it – perhaps you do sense it. But if you have debt – you are a slave. This is most definitely a PROBLEM.

Normal Everyday Slavery

Debt. That four letter word that is so controversial and divisive. There are those who advocate some debt as good, and other types of debt as bad. When describing “good” debt, they mention mortgages, student loans (maybe), or business loans (“You have to spend money to make money – right?”).

But is this debt really “good”? Is there such a thing as “good” debt? – or is it all “bad”? Let’s unpack this question, but first . . .

You are in bondage to the lender or bank. Click To Tweet

Let me just throw this out there? When you take on a debt – any debt, are you free to do with your money what you want? Of course not. You have to start to pay back your debt – with interest. In my opinion, that makes you a slave.

prison bars

Think about that, You are in bondage to the lender or bank. Say it with me, “My debt makes me a slave.” It’s sobering when you think about it.

There is one difference, unlike the slavery we’re more familiar with, you can be free at any time. You just have to pay your debt back first. Do you enjoy being in bondage? Then why not pay in full upfront? Too much money? . . . Then maybe you can’t afford it?

“Good” Debt vs “Bad” Debt

So, is there any “good” debt? NO. Any and all of my debt makes me a slave, until the debt is paid in full. Do you want to be a slave to a bank?

I believe that ALL debt is bad. Then why is it so prevalent? I’m sure that all of us have or had debt at one time. We justify it as a way to buy things we can’t afford – Now. The United States is an instant-gratification society – we want things now. We don’t want to wait until we can save the money to buy the things we think we deserve. We don’t even want to wait a few weeks for our tax refund. You can get a loan – now – to be paid back with interest when your refund comes in. Really? Perhaps this is why we can never get ahead.

We know that credit card debt is ALWAYS BAD. Car loans are always BAD too – you pay more in the end for a depreciating item. Student loans are bankrupting millennials, and destroying their future. And finally, with a mortgage, you end paying double the initial purchase price – if you take the mortgage to full term.

And yes, I currently have a mortgage. I have previously had student loans and car loans. Was I slave? – Yes. And my current debt makes me a slave? Did I hate it? – not at first. Once I realized that I was in bondage, and that so much of my money was tied up in debt payments, I always hated it. I’m now working to get rid of the debt that I have left (mortgage). Did you catch it? Just like my mindset was – most people don’t think they are in slavery. They see it as a way of life.

Counter Argument – Necessary Expenses

You might counter with, “Well I have to buy food and pay my electric bills. I’m a slave to those things too.” No – you’re not – for two reasons.

First – Yes, you have to buy food. But you can buy it anywhere. You’re free to choose where you eat. No one forces you to only eat at McDonald’s, and only buy groceries from Aldi’s. The distinction is – You’re free to choose. If your lender sells your debt – you still have to pay to the new lender. You don’t get to choose.

Second – Your total payment equals the value of the item. When you pay your bills, you receive a service worth the money you pay. But when you buy items with debt, you also pay interest. . . which you know upfront. We know what interest it, but let me illustrate it anyway. What if I buy the same couch as you do at the same time, but I pay in cash while you purchase it on a loan. The initial purchase price is the same, but in the end you will have spent more money because – interest. What is the couch actually worth? When we bought it, it was worth the initial purchase price. But you over-paid. You got less value for your money.

Counter Argument – Mortgages

People also argue – “But isn’t mortgage debt ok?” This is the most common debt often called “good” debt. Taking on a mortgage debt enables us to buy a house far sooner than if we were required to pay with cash upfront. But is this the best way? For example:

If you take out a conventional 30 year, $150,000 mortgage loan at 4% interest, your payment (not including taxes or insurance) is $716.00 a month. Not too bad – right? This kind of month-to-month thinking is what causes the problem in the first place. Over the entire term of the loan you will pay $257,804.

That’s $127,804 just in interest!!! For the convenience of having a house sooner. If you are dead-set on buying as house with a mortgage (as I was), at least save up a proper down payment. (Check out this post on buying your first house for more info) Certainly, if you can pay your mortgage off sooner, you can save boatloads of money in interest. Which, incidentally, is my plan.

Also, don’t keep your mortgage just for the tax deduction. See this post for more info.


My debt makes me a slave to the lender. Resist the “I want it now” mentality that pervades our culture. Until you get angry at the amount of excess money you give the bank – you’ll never be free. Debt doesn’t have to be a way of life. You can choose. Decide that you will never borrow money again. If you haven’t acquired any debt yet – Please Don’t.

Obviously we all make our own decisions, but at least now you can be prepared before you sign on the dotted line.

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  1. Re-entering civil discussion mode (and enjoying our back and forth):

    100% agree that credit cards, payday loans, car loans, and the like are terrible and should be avoided at all costs.

    I’m lukewarm on mortgages, but leaning toward “good debt” (I know you don’t think that exists… but I respectfully disagree)

    Student loans should be refinanced at the earliest opportunity (reducing rates to a paltry 5.7-ish %) and although the rates are still more than 0, thus bad, you’re investing in yourself. The statistics show you are also improving your earning potential and ultimately, your ability to pay down this debt and build more wealth that you would’ve otherwise been able to do.

    Finally – a loan for starting a business. I’m biased here, but the right business in the right area and industry can drastically improve your financial situation. It can also bankrupt you (stay tuned to my site to see how 1 guy’s story will turn out).

    With risk comes the opportunity for reward. I think it’s more about making smart, calculated decisions about which risks you’re willing to take in the short-term to benefit you and your family in the long-term.

    I’m really enjoying your site, Chris. Keep ’em coming.

    • Thanks for the feedback Mike. I appreciate you taking the time to comment. I don’t necessarily disagree with your points. I’ve accumulated a fair amount of debt myself. I wish there was a way ordinary folks could afford college without debt. I was able to obtain my degree from a small private school for the cost of one year at most othe schools. But even then I had some debt. I realize we don’t live in an ideal world, and debt is available. I just want people to realize that there are other options, and you end up paying more long term for the convenience of that thing now – house, degree, or business. It doesn’t have to be a way of life.
      The other thing I think people often forget is risk. More to come on that one . . .

      • Chris,
        Good call on the overall message and kudos to you for reducing your debt burden before taking out the student loans. Not too many of us consider that strategy.

        Looking forward to your thoughts on risk. Thanks!

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