Thursday, 4 February 2010

Is debt ok if it leads to self-improvement?

Earlier this week, I read an article in the London Evening Standard, entitled, 'Debt Hurts but it still pushes up the ladder'.  The article discussed a book by John Lanchester about the financial crisis, 'Whoops, Why Everyone Owes Everyone and No One Can Pay'.
The reviewer, Sarah Sands, suggested that, contrary to Lanchester's view, debt is not necessarily a bad thing.
She argues that she would still argue school-leavers to go to university, despite the debts that might involve.  I agree with her on that score, I suppose partly because I think that an education is an irreplaceable experience, but also because the debts involved, at least in the UK, would usually be fairly light.
However, Ms Sands also cites the example of  the writer Robert Harris, who bought an expensive car, impliedly on credit, to spur on his efforts at writing his next book, as well as of a young married couple whose career ambitions are fuelled by the debt they have recently taken on to buy their own home.  These examples do worry me; whilst I am all in favour of home-ownership as an aim, a mortgage should be proportional to one's means, and a large mortgage sounds to me not like a motivational tool but a potentially weighty burden.

Although there may be an adrenaline-based, fear-driven motivation to be gained from a fierce necessity to earn more money, I would argue that that is generally unsustainable, and that motivation that comes from within, from an interest and pride in what you are doing, is likely to be more genuine and more sustainable over the long-term. 

Quite apart from the fact that heavy debts of any kind minimise, if they do not remove, one's freedom of action, often preventing a voluntary change of job or relocation, what about involuntary changes?  Suppose that an ambitious, debt-laden person loses their job, or becomes ill; what is to happen to them then?  
My suggestion would be that greater satisfaction would be had from minimising debts, and building a financial cushion, so that work can be enjoyed for more than its money-earning possibilities.   Stability, whether financial or otherwise, leads to choices and freedom, and the prospect of a more peaceful and enjoyable life, if possibly a less exciting one.

No comments:

Post a Comment