Remember In Debt, that SABC TV show that tried helping people by exposing their debts into the public sphere? Well, if you followed the show season per season, it also just happen that even people on the 40k plus salary also get trapped in debt, and the ordinary you and I always go – Hebanna!, but how? Kanjani?
The problem is larger than we think. Besides bad spending habits, lavish lifestyles we can’t afford and lack of the savings culture there are other reasons why we end up in debt.
There is another problem. An economy problem if I may.
THE SHRINKING PIE
In the fantasy parables of prosperity that I constantly preach about: it states that we all tend to feed from the same or one source, a pie, yes, and one source is not enough to maintain a growing population, at least according to the prosperity theorists such as myself. As expected, it so happens that, that very same pie is starting to shrink. The pie of course here in refers to and represents the economy, and when the pie shrinks, costs start to soar and the people’s income starts to seems less. People start to struggle, and the hope of prosperity too starts to vanish.
But what about this pie?
What’s truly going on?
The Math:
In a shrinking pie or an economy, it simply means that a few are getting rich while the majority is slowly becoming poor. That rich few, after a while start to complain that the economy is not growing, i.e the pie is shrinking forgetting they are the ones who have all the money stashed in their accounts and not spending. What they are saying is they want that very last penny you have. And since well they have no intentions of losing their money they have to find smarter ways to get that last penny of yours.
An economy worth R50m for instance, with R50m in the economic circulation and exchange, these guys decides that they are going to get richer (The Extremists) , they accumulate all the wealth until the economy has R10m in circulation; R10m worth of a pie. Majority of people then start to become broke, so they spend less, and the very same rich people start complaining saying the people are not spending their money. “What money?” One poor fellow asks.
So now the economy is shrinking, and its bad times, but not for the rich. You on the other side of life are broke, struggling to pay rent, your car let alone monthly grocery.
While you’re at that these rich obsessed extremists still in pursuit of your money, and at the same time they do not want to lose their wealth, so they start to device ways to keep their money somewhere ‘safe’.
They discover you are broke and can’t afford and you are constantly in need of cash, desperately so. They then decide they will lend their money to banks at a 15% fixed interest rate so that the bank can lend you the money. Since the banks dictate where, how and why money goes where it goes, the bank decide they will also need a young profit out of the scheme, so they add their own 6% of handling fees and administration costs making the interest 21%, linked to Prime lending rate.
The bank then comes to you and be like Hey Nelson, Heard you’re looking for a house, or a new car, or hey – are your accounts in arrears? Man we can help you out. We’ve got some loans and guess what; you can pay us back in 20 months. Me being all desperate I’m like well sweet, please help out, talk about perfect timing. Due diligence goes, your tiny little salary is checked out and now they are like since well you can afford we can give you all that much at 21% interest.
You do your math you’re like what the hell I’m broke anyway, I’ll pay for it for the next 3 years and you whip out your phone and hashtag #DebtIsNotABadThing.
“Where do I sign?” You ask.
This pretty much sums up the picture of where the rich people’s money goes. It is stashed into vehicle financing, home loans, bonds and more. All of a sudden boom, African Bank thrives, now there is a mashonisa at every corner pickpocketing you because my man, times are hard.
New businesses too pop out and flourish:
Capfin (at Pep)
Wonga.com
M-Fin (at Shoprite)
Clothing stores realise this too and are like why not give you “an account” aka a credit card, with R5000.00 for all your clothing needs. Those accounts are backed up by these millions.
Soon, Shoprite, Pick ‘n Pay and Spar will start giving you “Grocery Account” because Woolies has long started.
So now after all this time you wonder and ask yourself: how the hell did I get in debt?
How can you not be in debt is the question you’re supposed to ask because at every corner, every shop and every TV ad there is someone trying to get you in debt. Although this is partly your fault. It isn’t. Sure we need a little bit of credit here and there but the extreme at which this is going is not beneficial, at least to our precious future if we’re planning to have one.
The truth of the matter is that the pie/economy is not growing, those who own the wealth are holding on to it and want your last penny while your line manager is refusing to promote or give you a raise. This is all because business is bad, and, well, so is everything else. If you keep on insisting you might even get fired so it’s best you shut up and get in debt to maintain your life.
A story old as time…
#moneymonday
#motivationmonday
[ABTM id=6650]
