You, whether you like it or not, are a business.
As a capitalist in a capitalist society, you must accept this one simple truth.
Because the fundamental block of our society is that whether you know it or not, you are a business and are treated as such.
You are taxed like a business. Your profits are taxed (Income Tax) as well as your actions (Sales Tax).
You have costs (Rent, Food, and Clothing) and revenue (Income, Dividends, and other ROIs) like a business.
You are invested in just like a business. (Parents and government put money into you for education.)
You have liabilities like a business. (Taking a Consumer Loan is the exact same as any Business Liability.)
You make business decisions every day like a business. (Should I do this or this to increase my net worth or value as labor?)
Because you are a business, you need to be run like one.
You need to know the nuances of business as they are how the world operates. No matter what creed, ideology, or background, everything about being human is essentially run like a business. Even the most basic of our societies always evolve into monetary systems. How else are we supposed to function if we can’t trade any goods?
Because of this truth, I am starting the How to Build Your Life as Business Series to teach the nuances of how the practices in the real world and business world meet on not just a fundamental level, but a primitive level. Primitive in that it is engrained in the very nature of man.
Welcome to Your Life as a Business.
How to Build Your Life as a Business Series:
Episode 1 - Shark Loans – Why you’re keeping yourself poor by giving away your future wealth.
Today is the day you come to find the reasons why many people stay poor. As a part of Building Your Life as a Business, you have to understand a fundamental truth. That no matter what you do with your money, there is and will always be someone who is more than willing to liberate you of the burden of weight keeping it in your wallet.
Because of this truth, you need to be just as wary of the opposite. Which is anyone who is willing to lend you money. As borrowing money is one of the easiest ways for you to keep yourself poor as you continuously give away your future wealth for something nice now.
This profession of giving money to people to buy things they don’t need or can’t afford has been around for ages and still exists today. These Lenders are called sharks and the loans they give are shark loans. They are given such a name because of their predatory nature. Because the loans have too high of interest rates and other bad terms that take advantage of you and your ability to pay.
Let’s go over two bad examples of people who give shark loans:
Shark Loan One: (Based off a true story.)
You need a car.
You need one as soon as possible.
You walk onto a Used Car Lot.
You walk away with a $12,000 loan and a Used Car.
You have a 4 year loan at $400 dollars a month.
Which means you will pay $4,800 dollars per year for 4 years.
Coming out to $19,200 for a car that is only worth $12,000.
Even worse, you drive it off the lot and it immediately loses $3,000 dollars in value. (As most cars do.)
So if you ran into money trouble and couldn’t make your car payment, you couldn’t even sell the car to cover the original loan amount.
You pay your car off for 2 years, and then something expensive breaks in the car. You have to pay it off because if you don’t you can’t go to work so you can keep making payments.
The extra expense ultimately affects your ability to pay your car payments, and you miss a few.
Your car is then repossessed and they demand all your past car payments plus current ones to get it back.
But you don’t have the money and even worse you need the car to get to work.
Because you can’t get to work, you lose your job, and the loan company sells your car to someone else. However the amount they sell it for isn’t enough to cover the loan and they still demand that you pay the rest of the loan. Even though you will no longer have a car and have no job. You are still legally liable to pay the loan back.
Shark Loan Two: (Based off a true story.)
You go to college for an education.
You take out $100,000 for a degree that isn’t in high demand.
You get out of college and can’t find work.
You end up taking a job offering low pay and is far below your education level.
You still can’t make the extremely high payments of a $100,000 shark loan and get a second low paying job.
You work 80 hours a week and still can barely make ends meet.
Because you have conventional loans, the bank won’t let you consolidate your loans or lower your payments without charging high interest and fees.
Even worse, your parents co-signed on the loan. Because you have been missing payments, you have ruined their credit. They cannot get refinanced when they hit hard times and need to lower their monthly payments. This causes them to not be able to make their payments a few months down the road and they end up losing the house.
The house becomes the exact same situation as the car loan. And they are still liable for any leftover loan.
In both these situations, you have loans that were given without concern of whether what you were buying would actually help you pay back the loans. No consideration was given to see if this decision would benefit you in the future. It was simply made to take your future wealth from your current income with no thought about the risk of you losing your job, having money trouble because a big expense came up, or another one of life’s little reminders that she hates you.
What does this mean to you?
It means don’t go to college unless you know it is a valuable investment that will increase your income potential by 10x. That means researching to see that the job you want is in high demand and pays very, very well. The idea here is not that you go for your passion. The idea is to get work that pays, and once you’re financially sound, you pursue your passion.
DON’T PURSUE YOUR PASSION USING SHARK LOANS UNLESS YOU KNOW THE MONEY IS THERE.
It means don’t buy nicer things now if you can’t afford it. Don’t buy a $20,000 car and make $500 payments a month when you only make $1000 a month. You’re creating a situation where your finances can be easily stressed if you have even one bump in the road.
DON’T SACRIFICE YOUR FUTURE FOR A SHORT-TERM PLEASURE SUCH AS A NICE CAR, HOUSE, OR ANYTHING THAT SHARKS WILL LEND YOU MONEY FOR.
In the end, ensure that any money you’re borrowing is an investment that will pay for itself.
Buy a $150,000, 4 bedroom house with a mortgage payment of $850.
Live in one of the rooms and rent out the other 3 for $400 each.
Pay off the mortgage with the $1200 and enjoy your extra $350 a month.
Knowing that not only are you saving thousands a year by not paying rent, your making money as well as paying into a house you can resell for much, much more.
Building Your Life as a Business is the Series that if you are interested in any way in being successful, you need to follow. Unlike other series that tell you the type of person you have to be to be successful, this series tells you how the world works and the techniques and tools you need in your tool belt to face and/or avoid its pitfalls.
As always, Welcome to Building Your Life as a Business.