Slavery represents one of the oldest models of ownership. To be a slave is to be under the dominion of another person or entity. This can take many forms and happen for a number of reasons. While slavery in its most known type has been abolished in countries the world over across the past several centuries, there remains what I call the Modern Day Slave.
The Modern Day Slave is anyone walking around paying the monthly minimums on their credit cards. They are willing to pay outrageous rates of 19% and beyond for the shallow convenience of a consumer-driven lifestyle. The Modern Day Slave finances everything just to fit in with the people around them; their stove, their fridge, their television, their cell phone, their vehicle – quite literally everything they own. Living in this fashion is just as grim a thought as sitting in a room with shackles on.
The Modern Day Slave is held in place by a powerful force we have come to know as “credit”. Credit is easy to obtain and even easier to use. The problem is the behaviour that develops from a lifetime of accessing easy credit.
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Modern Day Slavery and Instant Gratification
The desire for instant gratification is primal. It is present in all animals that lack the ability of foresight. To rise above the trappings of modern day slavery, it is necessary to go from a life of instant gratification to one of deferred gratification. Being able to plan ahead and save accordingly is ultimately what it takes to break free. Recognize that mega-corporations devote billions of dollars to marketing their products to the unwitting consumer.
Avoid the Credit Shackles
Credit controls the uneducated masses, telling them where they can and cannot live and what they can and cannot do. Credit will micromanage and control your life if you abuse it. When I say the “uneducated masses”, I am referring to any and all men and women whom lack financial knowledge. The wondrous thing about credit is that it can make a poor man look rich and a rich man go broke. Without proper planning and control we are all susceptible to the wrath of credit.
On the other hand, credit and the financial system may lift up and reward the people who learn to use them wisely. Mastering this area of finance is something everyone should strive for. Credit cards are great for collecting points or cash back rewards. When properly used, we the consumer can win, but only when we understand the pros and cons to proper credit management.
Consider this riddle of modern consumer finance: You need to have everything in order including pay slips, bank statements, loan statements, and other such documents to secure a loan, whereas financial institutions literally send out preapproved credit card applications in the mail to people who never even asked for them. On one hand rigorous documentation is required for a loan and on the other hand they’re handing out credit like candy.
The financial institutions don’t care how you spend the credit. The only thing they want is their payment on time every month – and rightfully so. Always remember that the only way to really win at this game is to not play.
Lacking Financial Education Causes Modern Day Slavery
Due to the intentional lack of proper financial training in our lower and middle school system:
- Our young adults are easy prey for the money lenders. They are comfortably poised to financially farm the entrances at our colleges and universities.
- Average families run into problems using credit cards to manage their lives and live beyond their means. They routinely max out credit cards. As those young children who learned poor habits and were never taught how to manage credit grow up, they become the cattle for the financial dairy farmers.
If debt was such a controversial issue across North America, you would assume our educational institutions would take a more proactive approach. You would think they would install actual—and independent—financial classes for all children starting from first grade. Financial literacy education should not be glossed over, yet here we are with an education system that virtually ignores it.
Mastering Financial Literacy
The common line in schools is this: “Get a good education so you can get a good job and make good money”. The problem is that the school system doesn’t educate the students as to how to manage that good money once they get it! Even the basics of balancing a budget remain uncovered in the vast majority of public schools. Perhaps their mantra should instead be the age-old, “You’ll owe, you’ll owe, it’s off to work you’ll go.” That seems to be in line with the reality.
Financial literacy is part of the elementary and secondary curriculum in many different subjects such as mathematics, social studies, Canadian and World studies, business studies and many others. In some subjects, students may be learning specific skills such as understanding money, consumer awareness, personal finances, budgeting and money management that will help them develop financial literacy skills. In other subjects, financial literacy connections may be made as students learn about their place in the world, as a responsible and compassionate citizen or when they study different economic systems.
Through the curriculum, students are developing skills in critical thinking, decision-making and problem solving that can be applied to subjects at school and to real life situations. Resources have been developed for teachers to help them connect financial literacy topics across the curriculum to deepen students’ learning and make financial literacy more relevant.
Financial Literacy Should Begin with Youth
Mastering one’s finances and staying in control at all times is nothing short of an art form unto itself. It is a constant state of checks and balances. Financial literacy is one subject in our curriculum that is not getting the attention it so truly deserves. Then again, the system relies on having a ready crop of Modern Day Slaves ready to bear the burden of debt. That’s how the economy continues to expand.
Maybe if people understood the ills of debt and consumerism they would start questioning the “givens” in our society. By questioning, they would recognize student debt, car loans, and the other consumer trappings for what they are.
The world we live in would look a lot different if all children were taught some basics of finance.
Children should know how to:
- Manage a bank account.
- Control their spending.
- Separate wants from needs.
The wheel of modern day slavery is designed to keep them in the dark, however.
Escaping Modern Day Slavery
For sustainable change in the overall financial wellbeing of average people, knowledge is the key. It is comfortable to discuss the failures of the government or school system in teaching proper financial etiquette, but at the end of the day the duty of securing your future falls to no one else but yourself.
I have been speaking as if “credit” was the antagonist of this post, but the only way credit can affect you is if you let it. You are in total control of your actions and spending habits. You are master of your destiny. No one can make you a Modern Day Slave. It is a position that requires only your desire for instant gratification and willingness to sign on the dotted line.
The Path to Changing Your Stars
I realize some people reading this are in debt due to credit cards, student loans, and so on. If that is the case, then controlling your current debt is the most important part of securing your future. To admit you are or were once a part of the financially uneducated masses might be difficult at first. All the same, it is the first step on the road to recovery. Taking the Socratic approach by acknowledging first how little you know is the first step. Then, you are prepared to begin the journey to improving your life and taking charge of your finances.
Financial discipline can only be taught and explained to a point. Living with financial discipline as a core pillar of your daily life takes time and practice. Most people do not wake up one morning and find out they went bankrupt the day before. The road to financial ruin is often marked with many questionable decisions. You need to recognize good financial decisions from bad ones. Take on debt reluctantly. Further, avoid debt altogether where possible.
Use the snowball approach to paying off debt. Focus on your high-interest credit first, then work your way down. As some cards get paid off, apply those funds to the next card.
Find ways to save money and keep moving forward at a sustainable pace towards true financial independence.
Rise out of the ranks of the Modern Day Slave and stake your claim on financial independence. Your future depends on it.
– Rick
Do you ever feel like a Modern Day Slave? What have you done to secure your financial independence?
Featured image courtesy of Pixabay.
Debt slavery is unfavorably prevailing due to our economic instability which affects most of us and have been commonly the very reason why we can’t no longer pay our debts. Its just a matter of a well calculated plan to be able to gain freedom from this modern day slavery that your referring.
Capitalcreditrcvry recently posted…National Credit Recovery Services in Ontario
A well-laid plan is the key to achieving financial stability and independence, absolutely.
Take care,
Ryan
Great read, the educational system should be teaching financial practices. We may look at it as Slaves/Prisoners. In any case, Most learn the hard way or never learn at all. It is up to us to seek guidance for more understanding and to spread the financial word for financial freedom.
Hi Victor,
We happen to believe that simply teaching finances in school right from the time kids arrive would be the easiest way to build a financially fit society/nation years down the road. Why wait until people are adults and have made huge mistakes and fundamentally “don’t get it” before trying to correct the problem? Start kids while they’re young and they can literally grasp any concept.
As you said, the reality is that the “system” fails the citizens as it is and rather than complaining, we each need to take the bull by the horns and simply teach ourselves how to prosper.
– Ryan
Instant gratification and understanding interest rates is huge. I talked about that in relation to an article on Rent A Center’s in this country and the revolving door of people “buying” things there they can’t afford. It’s a huge problem.
Hi Adam,
These issues are certainly front and center for the general masses. Instant gratification has broken the back of many a working-person.
– Rick
I like your quote “The wondrous thing about credit is that it can make a poor man look rich and a rich man go broke.”
I also whole heartily agree with you about the state of “Financial Illiteracy” in our society. If its not coming from home, the schools should have personal finance classes as part of core curriculum.
I am going to share this on my blog.
Good work!
Chip
Thank you for the kind words, Chip.
We feel the lack of financial education in schools is an abomination and is too gross an error to be any sort of oversight. As with the quote you took note of, the reality is that credit is a dangerous weapon in the hands of the wrong person when it is pumped to society as a “given”.
Thank you for sharing this article to your blog and helping spread the word!
– Rick
Thought provoking column as always. I was fortunate to spend every summer with my grandparents who taught me that earning money is smart but using that money wisely is even smarter. To this day I purchase what I need then purchase the investments I want. With this I hope to achieve financial freedom by 50.
Good to hear from you again, Andrew.
Learning wise consumption habits early lays the foundation for a productive life. The consumer world has been designed no different than the interior of a casino. We are to be so distracted by the bells and whistles of what’s happening “now” that we lose our sense of something greater in life beyond what we can buy with money. To truly Get Rich requires self-satisfaction so that once you have “enough”, you’ll actually know it.
Take care,
– Ryan
I had a friend who had a $5000 credit card debt during his years of partying during college. I taught him the quick and simple way of paying off credit card debt…with more credit card debt.
1) Assume 5k of credit card debt from discover
2) Sign up to capital one 1.5% cashback and grace period with 500 dollar limit.
3) Use the capital one to pay the discover (not sure if every credit card allows for this)
4) get the 1.5% from capital one and don’t use it
5) pay back the capital one debt before the end of the month.
6) once you get $100 in 1.5% cashback, use it on your debt
7) continue until you’re done. Do not spend anything else on credit cards.
Eventually he paid it back on time. Not for everybody, extremely depressing, and takes strict diligence but it will eventually pay off
We’re all for interesting ways to free yourself from the rat race. However, rather than trying to balance between credit cards, we would recommend spending/saving discipline. If it comes down to juggling multiple cards and grace periods, that’s a problem.
Thanks for stopping by, Broke Dividend. Hope to hear from you (and your unorthodox strategies) again soon.
– Ryan
Hi Rick,
I totally agree on that. Actually I pushed that concept even further on my blog. Being a salaried worker is being a modern slave. Like you said “To be a slave is to be under the dominion of another person or entity.”
When you accept a full time job, you accept that for most of your awaken time, you won’t live in a democracy anymore but under the dominion of a corporation who will rule your life. All of you life is going to be planned around the job while it should be the opposite.
Nowadays, corporation even want to control what you think, what you say when you’re not at work, how you feel at home (because if you feel good at home you’ll be more productive at work)…
If you get a full time job AND a huge mortgage (or other huge debts) then you’ve built yourself the greatest self-made prison. It’s going to take years and years to dig out a tunnel long enough to free yourself from that cage.
Nobody wants all of us to be financially literate… who would want to use credit cards? Everybody would be saving as much as they could to retire early… the system wouldn’t work anymore. For a human society to work and be powerful it seems that it needs a mass of slave because some humans always tend to turn things that way and most humans let them do that.
Georges Orwell said it better than me : “War is piece. Freedom is slavery. Ignorance is strenght.”
I’m a modern slave and I now have a shovel to slowly dig my way out. It took me a while to figure my way out of the rat race but now that I have a plan I’m doing all I can to clear my mortgage before 2020 and to quit my day job before 2026. I’ll be 45 by then and hopefully I’ll have a lot of great years of total freedom to live. 🙂
Good to hear from you again, Allan.
I checked out your site’s post about the 12 years of slavery concept. Very cool! It’s a pretty sad thing that people spend so much time in their lives looking at the clock and wishing they were elsewhere, eh? The calamity of our times.
Rick and I are both working diligently to get our investments working in our favour so we can finally be financially free. I always like to think of Andy from “Shawshank Redemption” slowly hammering away at the wall – pressure and time being his advantages. You start small and eventually get significant results.
Take care!
– Ryan
The Shawshank redemption! Wow! That one is a classic. I saw it so many times I lost the count. Great comparison.
I really feel like a prisoner waiting for his time to finally be free. But I hope I won’t be institutionnalized by then… people look like zombies after a while…
Yep looking at the clock all day long is sad… but it’s my calamity… I hate “working” no matter what job I do I get bored after 3 weeks… I don’t know why. Maybe it’s because I’m not in the right field or maybe it’s because I’m forced to do the same thing everyday while I’d want to do something else… I was not made to evolve in such a system… but I made choices that got me stucked into it.
It’s not because I’m lazy. I’m actually very productive and even when I’m at home, i build furnitures, I write, I make home-improvements… I just hate doing the same thing over and over again to obtain the same results over and over again. Machines can do that… I can’t. And that’s why I’m assembling a great cash machine with the dividend growth investing strategy. I want something else to do that kind of tasks for me so I can spend my time doing new things,being creative and not always only do things for the matter of making a profit.
I’ll come back here once in a while. You guys write interesting posts. I added you to my blogroll to make sure I won’t forget (so many blogs and things to remember ahah).
Have a great week-end!
Thanks so much for the positive feedback! As writers I believe it’s important to write from the heart for self-expression, though knowing others appreciate what’s written makes it infinitely more enjoyable.
I just checked out your blogroll – great to be listed among those other fantastic bloggers. When we set ours up we’ll be sure to hit you back, my friend.
– Ryan
Your title says it all. It’s unfortunate that most don’t see it as slavery. We often forget about the true cost of acquiring all these material possessions. With regard to instant gratification and buying material items I like to call the period immediately after the “moneymoon” phase. That period of time when you are so excited about that new house, new car smell, new clothes, etc. that eventually wears off after a month or two or six. The moneymoon ends and you are left feeling empty again and wanting something newer. It is much better to spend money on memories and experiences than material items. But that is not what the consumer based economy would have you believe. Thanks for sharing.
Thanks for stopping by, DH!
I love the term, “Moneymoon”. It’s exactly true; the premise that a person can buy their way to happiness simply isn’t valid. Purchasing more consumer goods tends only to serve as an excuse not to self-reflect. The true price is not on the label, it’s actually a person’s freedom.
– Rick