- "Let us avoid debt as we would avoid a plague; where we are now in debt let us get out of debt; if not today, then tomorrow." -President J. Reuben Clark Jr. (link)
- "With the exception of buying a home, paying for education, or making other vital investments, avoid debt and the resulting finance charges. Buy consumer durables and vacations with cash." -Elder Marvin J. Ashton (link)
- "Investment debt should be fully secured so as not to encumber a family’s security. Don’t invest in speculative ventures. The spirit of speculation can become intoxicating. Many fortunes have been wiped out by the uncontrolled appetite to accumulate more and more. Let us learn from the sorrows of the past and avoid enslaving our time, energy, and general health to a gluttonous appetite to acquire increased material goods." -N. Eldon Tanner (link)
- "Since the early days of the Church, the Lord's prophets have repeatedly warned against the bondage of debt. One of the great dangers of debt is the interest that accompanies it. When it is necessary to incur debt, such as a reasonable amount to purchase a modest home or to complete one's education, the debt should be repaid as quickly as possible." -From an LDS.org article entitled "Debt" (link)
But what does Rick Koerber say about this counsel?
From his radio show on 11/23/2007:
He says that avoiding debt means "to avoid having liabilities that exceed the value of your assets" (listen below)
What does he say it means to save? He says it means to "be active in investing, by managing risk to near zero" and to "put it in a liquid, insured vehicle" (listen below)
Later he declares that if you have any equity in your house, you owe no debt on that house (listen below)
TRANSCRIPT:
“If you have a $400,000 house and a $200,000 mortgage, you have no debt! If that was your only financial situation…you have no debt! You have $200,000 of equity. You have no debt! You are not in debt! You’re not in debt! You’re not in debt! I’m gonna say it ninety times! If you have a $400,000 house and $200,000 mortgage you have no debt to pay off...You have a liability to the mortgage company“ -Rick Koerber ("The Free Capitalist")
Major Misunderstandings
Rick Koerber has two major misunderstandings regarding the counsel to save for a rainy day and to avoid debt.
- The purpose of savings is to have funds that can be used to cover expenses or other financial obligations when no other means are readily available. This doesn't mean to have assets that can be readily liquified and that are insured. This doesn't mean to have investments that you can quickly convert to cash. This means having cash! Yes, you should put it in a tin can, or a bank. You should not count other investments or assets to be "savings." Savings are not "future consumption" (as he says "consumers" think of it), but it is "saved payments for expenses or debt payments." How many stories are there of people who think their assets are liquid or "insured" only to discover they are not. You cannot "save" investments. You save cash, not assets.
- Debt is obligation. Having assets does not remove the obligation. If I have $10,000 on my credit card, having a $15,000 car does to not remove my obligation of $10,000 on the credit card. Rick Koerber tries to define "debt" as having assets greater than liablities, but that's having positive net worth, which is not the same as being debt-free. The counsel is to not have debts, which are liabilities. You are not "safe" or "avoiding debt" by adding assets. If you were to sell (liquify) some assets to pay off the debts, then you would have eliminated your debt and would be following counsel. With Koerber's interpretation, if you had $1 million of debt, as long as you had at least $1 million dollars in assets, you were avoiding debt. The counsel teaches to not be encumbered by financial obligation. What happens when asset values come down (like with home values)? Your obligations (debts) don't change, because they are fixed in the contract, but your asset values do. The asset values depend on market supply and demand, whereas your debts are due to a contract you signed and which doesn't change unless the contract says so, regardless of what else is going on in the market. What do you do when your income goes down, or your assets drop in value to such a degree that you can't make the payments on your debts (liabilities)? Eventually, your assets get seized and force-liquidated. However, if you have no debts, you wouldn't lose any of the assets. Rather, the prices would just go down. But you still have them, and there is no interest you have to pay on them. That's the counsel from the church.
"Pay the debt thou hast contracted with the printer. Release thyself from bondage." (D&C 19:35)
You have "a debt" or "debts." You are "in debt" when you have any debt, not when the payments of that debt are more than you can handle. The counsel is to avoid any debt, except for a few things, like a modest house. The counsel is not to "Equity Mill" properties and assets and take out loans and use the money for other investment opportunities. The counsel is not to acquire high levels of debt and many assets to balance out the debts. It's to avoid getting debt in the first place!
Twisting Teachings for Financial Gain
If a person takes true doctrine or correct teachings from the church and twists their meanings so that he leads people astray from the correct doctrine and makes money doing so, what is that called? What is it called when someone takes people's money that goes against counsel but tells them that they are not going against counsel? That's your homework for today. Turn your brain on and figure that out. Let's hope this is not happening in the Free Capitalist movement.
22 comments:
re: "Rick Koerber has two major misunderstandings regarding the counsel to save for a rainy day and to avoid debt."
I missed the part where the church leaders counseled us to stuff cash into our mattresses for a rainy day.
Brigham Young had a very different idea of what saving for a rainy day was in his talk given called "Use and Abuse of Blessings" Found in the Free Capitalist Primer. If you are going to critique the Free Capitalist movement I would recomend reading the book that describes in detail the principles. You can get it for free at primer.freecapitalist.com.
I missed the part where church leaders said that saving means investing and that avoiding debt means positive net worth.
And I've read the primer. It doesn't change what Rick says in his show. It only gives me more errors to write posts on.
So we have established that the church leaders dont discuss techniques when talking about personal finances, so you shouldnt attribute your techniques to the church leadership without anything to back you up.
Also Rick posted a response on freecapitalist.com, if you havent seen it yet.
"So we have established that the church leaders dont discuss techniques"
You take me for a fool. No they don' t "discuss techniques." The question isn't about "techniques" it's about redefining the words "saving" and "debt" to mean something entirely different. Once you have the wrong understanding of the concepts, the "techniques" don't really matter.
Look, you're not going to get me to fall for your silly games of changing words, arguing side issues, don't bother.
"it's about redefining the words "saving" and "debt" to mean something entirely different."
Rick is always up front and open when he talks about saving and debt. There is never any confusion about what he means when he uses those terms. Even in the quote that you give in your blog, it is Rich defining what he means by the term debt. There is no one in the movement who is confused about what he is talking about.
Just because you disagree with the way that Rick defines debt or saving doesnt make it untrue. Rick is completely clear in the terms that he uses and makes sure everyone listening is clear as well. You cant say that he is trying to decieve people by the words that he uses because of his propensity to define everything he talks about.
The Free Capitalist movement is a group of like minded individuals that have come to a general consensus on what words mean what, and what principles we will follow. Just because you come in and say a word doesnt mean what we say it means doesnt invalidate what we are doing, it just makes it difficult for you and us to have a coherent conversation.
"There is never any confusion about what he means when he uses those terms."
I know, and I posted what he said and analyzed it. I think some things he said are wrong and pointed out what, and why.
"Just because you disagree with the way that Rick defines debt or saving doesnt make it untrue."
That may be, but that's what the discussion on the blog is about. It's about the claims themselves, not whether claims can be true when one person disagrees.
"The Free Capitalist movement is a group of like minded individuals that have come to a general consensus on what words mean what, and what principles we will follow. Just because you come in and say a word doesnt mean what we say it means doesnt invalidate what we are doing, it just makes it difficult for you and us to have a coherent conversation."
Look, you keep trying to argue about how people can know or argue about what is true. I'm not arguing that I may be wrong or wrong, or that you all might all agree. I am trying to get to the nitty-gritty. Let's discuss the points and the ideas an we will each decide.
Stop dropping notions that "well, just because you don't think it's true, doesn't mean that it can't be" (of course, so what. That says nothing about what is being argued)
or "well, we all agree and have come to the decision it's true" (great, I figured that. That doesn't mean other people have, or that you still can't discuss the issues).
Here’s the problem with arguing with FreeCapitalists: they won’t address your specific arguments. They like to twist words and quote dead prophets (or is it profits?). Basically you’re wrong because you don’t see the world the same way they do or define the words the same way they do. It’s like an exclusive club or a religion. To join you have to agree with them. Everyone else is a heretic and should be cast out.
I think Utahn makes several valid points in his posts which Jason refuses to address. Instead Jason talks about how Brigham Young or someone else would define things differently than the current LDS leadership. It should be noted that detractors from the LDS church (such as polygamists) use the words of dead prophets to back up their practices too.
Personally I find Rick’s teachings in audio clips to be against the financial tenents of the LDS church. As far as I can tell the church as always taught to pay off your debts as fast as reasonable possible. I don’t see how mortgaging your house to the hilt is good stewardship. Investments don’t always pay off no matter how much you hedge against risk. Tough times come and if you don’t have the money to pay off your obligations, you’re going to find yourself in a world of hurt.
It should also be noted that when the chruch builds a new building like a temple, they don't mortage it to the hilt. They make sure they have the money to build it BEFORE doing so. All of their churches and temples are debt-free.
In the end what Brigham Young said or the current church leadership says about debt or finances is really not worth arguing over. Jason can have his way of defining the best use of money, while Utahn is free to approach it differently. It’s called agency.
I personally believe in the motto “By their fruits you shall know them.” Last time I looked Rick’s empire, based on his 13 Principles, has crumbled to the ground.
I wonder what Brigham Young would say about that.
Utahn: You talk about saving money in the bank, but at the same time say that liabilities are bad and that they should be paid off as quickly as possible and that you should never take on liabilities except for a house or an education, etc. Do you see the major contradiction in this? If it's wrong to take on liabities except for certain items, then shouldn't it be wrong for the bank to do the same thing? Rick teaches principles that banks use to increase wealth: Arbitrage, Velocity of Money, etc. He has always advocated building up a savings (which banks do), living within your means, and always having an exit strategy for every investment. I do not see where this violates church doctrine, and if it did, then wouldn't we be guilty of that same violation if we give our money to the bank? Think about it.
Anonymous: So you're belief is that the counsel of dead prophets should be discounted and ignored? What do we need scripture for then? I get this attitude all the time from people when I discuss President Benson's and President J. Reuben Clark's statement about socialism and the need to stand up against it. They say something like, "well, the leaders of the church today aren't saying anything about it, so it's not important now." Maybe the reason they don't mention it much now is because the members have ignored their counsel up to now, so they feel that they should counsel on more basic principles. Does this mean that the principles taught by earlier prophets are invalid? I don't think so. In fact, I believe it to be an indictment on the membership today that we rarely hear the same counsel. When the Lord's people are not prepared to live by certain laws, the Lord tends to offer them an easier law to live by until they are more prepared to live by the higher law. Much like the early Israelites were given the Law of Moses because they could not abide the higher law. People today are major consumers. We have been 'trained, taught, and educated' to be this way. These type of people are not prepared to be investors. Investing, for people in the consumer condition, is extremely dangerous. Which is why Rick always counsels people to get educated first, before they start investing. Using a scalpel to save someone's life is a good thing, but only for someone who is educated and prepared in it's use. Handing that same instrument to a child could cause a lot of damage, not only to the child, but to anyone else who happened to get close enough. Please, think about it.
re: "I think Utahn makes several valid points in his posts which Jason refuses to address. Instead Jason talks about how Brigham Young or someone else would define things differently than the current LDS leadership."
I never said that, and please show me where there is a contradiction between what Brigham Young said and current leadership teaches.
re: "Personally I find Rick’s teachings in audio clips to be against the financial tenents of the LDS church. "
Where? No examples?
re: "I don’t see how mortgaging your house to the hilt is good stewardship."
Rick doesnt teach this.
re: "I personally believe in the motto “By their fruits you shall know them.” Last time I looked Rick’s empire, based on his 13 Principles, has crumbled to the ground."
Opinion, with out proof or examples, is not an argument, and does not strengthen your position. And neither does making anonymous postings with no context to who you are.
Re: Opinion, with out proof or examples, is not an argument, and does not strengthen your position.
Some proof that Rick's empire has crumbled.
Daily Herald Article Feb 29, 2008
A Franklin Squires press release Feb 12, 2008
Another Franklin Squires press release April 11, 2008
A Salt Lake City Weekly Article March 6, 2008
The AFU building and the building Rick's company was leasing at East Bay are now empty.
Apparently Rick's supporters have a different definition of prosperity than the rest of us.
"Some proof that Rick's empire has crumbled."
To be fair, you'd have to prove that the crumbled was due to not following church counsel or having incorrect teachings, etc. Because it could be that outside forces or forces outside their control brought it about.
But the options to me seem to be:
1. Someone violated principle
2. The principles were not real principles
3. Someone prevented someone else from acting according to principle
4. Someone wasn't acting according to principle in the first place
possibly a combination of some of these
It does make it a little easier to show people problems after the thing fails, then before, that's for sure.
1. The purpose of savings is to have funds that can be used to cover expenses or other financial obligations when no other means are readily available. This doesn't mean to have assets that can be readily liquified and that are insured.
I guess that rules out a Savings Account held at a Federally Insured Bank or Credit Union then.
This doesn't mean to have investments that you can quickly convert to cash.
And that rules out a Certificate of Deposit.
This means having cash! Yes, you should put it in a tin can, or a bank.
And by putting it in a bank, you mean a piggy bank, right? Or maybe you mean putting it in a safety-deposit box? That's the only place I know of where you can safely put your cash in a bank without it becomeing an investment of some kind.
You should not count other investments or assets to be "savings."
Got it. Only Cash in a box or can is savings. If it's been exchanged for an I.O.U. from the bank in the form of a Checking or Savings account, Certificate of Deosit, or any other highly liquid, low-yield investment, it's not cash and cannot be considered savings.
Savings are not "future consumption" (as he says "consumers" think of it), but it is "saved payments for expenses or debt payments."
Okay, so savings may not be used for anyhting but paying expenses or debts. One can't use savings to earn money.
How many stories are there of people who think their assets are liquid or "insured" only to discover they are not.
Far too many. Just ask the people who had money in the Savings & Loans in the 80's and early 90's.
You cannot "save" investments. You save cash, not assets.
I will keep that in mind next time I want to put some gold coins in a safety deposit box.
2. Debt is obligation.
That's one definition. It's certainly not the only one.
Having assets does not remove the obligation.
No, but the equity in an asset can offset the debt if one is able to liquidate the asset.
If I have $10,000 on my credit card, having a $15,000 car does to not remove my obligation of $10,000 on the credit card.
That is certainly true. Nevertheless, if one needed to pay off the $10K balance on the credit card and the liquid value of the car was actually $15K, then selling the car would enable one to pay off the $10K balance. It's all a question of liquidity.
Rick Koerber tries to define "debt" as having assets greater than liablities, but that's having positive net worth, which is not the same as being debt-free.
No he doesn't. Rick defines debt as having less equity in assets than the liability one has for those assets. But I'm sure that's what you actually meant, right?
The counsel is to not have debts, which are liabilities.
Actually, the counsel is to avoid unnecessary debt, especially costly consumer debt. The counsel, if heeded as narrow-mindedly and literally as you would have us believe it should be would prevent anyone taking out any business loans.
You are not "safe" or "avoiding debt" by adding assets.
What do you mean by "safe"?
If you were to sell (liquify) some assets to pay off the debts, then you would have eliminated your debt and would be following counsel.
You would also be limiting your earning capabilties significantly.
With Koerber's interpretation, if you had $1 million of debt, as long as you had at least $1 million dollars in assets, you were avoiding debt.
Assuming the assets are sufficiently liquid that you could actually get 1 Million Dollars by selling them, you wouldn't upside down or carrying a greater debt load than your assets and income can nutralize, so you could be out of debt.
The counsel teaches to not be encumbered by financial obligation. What happens when asset values come down (like with home values)?
That is always a danger, especially with the dollars you think are safe in a tin can or piggy bank.
Your obligations (debts) don't change, because they are fixed in the contract, but your asset values do.
Obviously your debts don't increase through compound interest with variable interest rates the way many others' debts do. How fortunate for you.
The asset values depend on market supply and demand, whereas your debts are due to a contract you signed and which doesn't change unless the contract says so, regardless of what else is going on in the market.
Ah, you included the key phrase "unless the contract says so" this time.
What do you do when your income goes down, or your assets drop in value to such a degree that you can't make the payments on your debts (liabilities)?
That's the all important question isn't it. That's just the sort of thing a wise investor considers before getting into a potentially dangerous situation isn't it?
What do you do when your bank closes, or the value of the dollar drops in half but the interest rates on your obligations double, or triple?
Eventually, your assets get seized and force-liquidated.
Only if you haven't already sold them at a higher price than they will get liquidated at.
However, if you have no debts, you wouldn't lose any of the assets. Rather, the prices would just go down. But you still have them, and there is no interest you have to pay on them.
Certainly true.
That's the counsel from the church.
The Church isn't teaching you how to run a business, it's teaching you to keep a roof over your head and a car to drive. Do you suppose the strategy for running a business might be different?
Oh, John. You keep trying to turn money in a savings or checking account into a low interest bearing account or a low risk investment. So that you can then fit other type of investments and finan
cial vehicles into the same description, therefore making those other vehicles and instruments suitable for "savings." Money in a savings and checking accounts are considered cash. Money market, probably not for the purpose of "savings." Nothing else I can think of.
"Got it. Only Cash in a box or can is savings."
No, like above, savings and checking accounts are considered cash.
Me: "If you were to sell (liquify) some assets to pay off the debts, then you would have eliminated your debt and would be following counsel."
You: "You would also be limiting your earning capabilties significantly."
The point is not to maximize your earnings when trying to avoid debt! This is where you guys are making a huge mistake. When you avoid debt, you may not be getting very good earnings, but that's not the goal anyway. It's to reduce obligation.
Me: "How many stories are there of people who think their assets are liquid or "insured" only to discover they are not."
You: "Far too many. Just ask the people who had money in the Savings & Loans in the 80's and early 90's."
You are actually making the point that even having money in a Savings and Loans carries enough risk that you should think of whether this should be considered "savings." If it's not savings, then anything else more risky would not be considered savings either I suppose.
Me: "You cannot "save" investments. You save cash, not assets."
You: "I will keep that in mind next time I want to put some gold coins in a safety deposit box."
Well, you show me a financial obligation you have where you have to pay in gold. I'll bet you don't have any. Therefore you'd have to convert that gold into cash if you wanted to use the gold to pay off a loan. So gold is an asset, not cash. It must be converted. And you "own" the gold. To say you are "saving" it is like saying you are "saving" IBM stock or "saving" and investment property. It's another confusion of terms. Man you guys do that a lot.
Me:"Debt is obligation."
You: "That's one definition. It's certainly not the only one."
Look it up! It means "something owed" or "an obligation." That's it. That's how the church uses it and that's how it's used in the scriptures. Stop trying to change the meaning of words!
At least have the decency of using the same meanings when trying to argue what is means to be following the counsel to stay out of debt.
Me: "Having assets does not remove the obligation."
You: "No, but the equity in an asset can offset the debt if one is able to liquidate the asset."
Well, yes, ONLY IF YOUR WERE TO LIQUIDATE, when the debt is removed. Until then, you got debt.
"if one needed to pay off the $10K balance on the credit card and the liquid value of the car was actually $15K, then selling the car would enable one to pay off the $10K balance. It's all a question of liquidity."
Well, it terms of following the counsel to stay out of debt, it's not a question of liquidity. It's a question of whether you actually did it. It would be like me having my tithing in the form of real estate which I plan to sell sometime. Then...oops, market collapses. Tithing gone.
"Assuming the assets are sufficiently liquid that you could actually get 1 Million Dollars by selling them, you wouldn't upside down or carrying a greater debt load than your assets and income can nutralize, so you could be out of debt."
BUT YOU'RE NOT OUT OF DEBT! On paper, you "could" if you sold sometime get out of debt sometime in the future, but you haven't done it. "Your Honor, on paper I had liquid asset to pay for that debt. Therefore, I argue that I was 'out of debt.'" No, I don't think so. Seriously, this is the problem with you guys.
Me: "Rick Koerber tries to define "debt" as having assets greater than liablities, but that's having positive net worth, which is not the same as being debt-free."
You: "No he doesn't. Rick defines debt as having less equity in assets than the liability one has for those assets. But I'm sure that's what you actually meant, right?"
Is that a joke? What do you think the definition of "positive net worth" is? I just googled it and found this: "Your net worth is the difference between all the things of value that you own, and all the debts you owe. In financial terms, your net worth is your assets minus your liabilities." If the value of your assets is greater than your liabilities (debts), then you are positive. If they are less, they are negative. If you have ANY money owed, that IS debt by definition.
Me: "Eventually, your assets get seized and force-liquidated."
You: "Only if you haven't already sold them at a higher price than they will get liquidated at."
If if if if. Why do keep doing this? You keep implying that if you are safe on paper, and that if you "could" do something then the risk is the same as if you did do it. Like if I said, "Well, on paper, I have X amount of dollars, so I'm ok." Not the same as having those X amount of dollar in cash. Bad assumption to make.
"The Church isn't teaching you how to run a business, it's teaching you to keep a roof over your head and a car to drive. Do you suppose the strategy for running a business might be different?"
No the church is teaching anyone how to run a business and yes the strategies would be different. That's beside the point. Doesn't correct what you and Rick say about what it means to follow church counsel.
Seriously, read a book on finances or something. Don't take existing words and redefine them to fit whatever you want so you can try to "prove" whatever you want.
Re: To be fair, you'd have to prove that the crumbled was due to not following church counsel or having incorrect teachings, etc.
I've never believed that the current problems with Rick's companies have anything to do with whether or not they've followed church council. Last time I checked, the GA's in Salt Lake City never told people how to run business. Instead, I think it has to do with a combination of the four reasons you gave AND the fact that most of the Rick's leadership team could quote principles but had little or no experience with running a real world, profitable business.
If you believe that a savings or checking account in a bank or credit union are the same thing as cash, you're deceived. You're used to thinking of them as such for the simple reason that they are an extremely liquid investment with almost no risk.
Now if you wish to argue that investments which are as equally liquid and virtually risk-free as the aforementioned accounts are not good places to store your wealth, then make that argument; but don't expect me to buy into your erroneous notion that savings and checking accounts are the same thing as cash, because they're not; and don't expect me to buy into your erroneous assertion that the only acceptable savings is in the form of U.S. dollars, because that, to me, is likewise a narrow-minded and short-sighted notion which fails to take into account the obvious devaluation of the dollar that is occurring at what appears to be an ever increasing rate.
When the value of your savings is half what it was when you put it in the bank in the first place, I suspect you'll be singing a different tune about savings.
Reducing obligation is certainly prudent, especially when such an obligation exceeds one's present ability to immediately discharge. And it is certainly prudent to make certain that one does not put one's dwelling or ability to provide for the necessities of life (food, fuel, etc.) in jeopardy simply to improve one's net-worth. Nevertheless if one has the ability to meet all those needs and any other financial obligations for six months or longer in a timely and reasonable manner, then the manner in which that value is stored should be immaterial.
Saving in the form of gold is different from saving in the form of a promissory agreement from your bank. Gold seems to be far better at maintaining and even increasing its value than the promissory agreement between you and your bank or the dollars stuffed into a can or under your mattress. In fact, even though the market value of real estate has dropped recently in many areas, over the long term, it too tends do better at holding and retaining its value than your dollars do. If instead of saving money you were saving water, which would be a better way of storing it... in a glasses on your counter top where it's the most liquid and readily available, yet will evaporate over time, or in a slightly less convenient, yet reasonably secure location where not only can you get back all the water you are saving, but some extra water for allowing others to use it while you don't need it?
As to the use of the term debt, I understand that the Church uses the term debt in the most common and traditional way, whereas Rick uses the term differently. Nevertheless, I don't believe Rick would disagree with the general counsel that the Church gives to minimize and eliminate any personal debts one might owe, to spend less than one earns, not to borrow for unneccessary expenses including vacations, and to set aside money for both expected and unexpected expenses in the event that one is temporarily unable to earn an income.
It would be like me having my tithing in the form of real estate which I plan to sell sometime. Then...oops, market collapses. Tithing gone.
If you calculate or pay your tithing on a yearly basis as you seem to be suggesting, and you realize a net loss in terms of income for the year, you're still going to pay tithing? On what, your losses? You have a curious notion of what it means to pay tithing on your increase.
Me: "Rick Koerber tries to define "debt" as having assets greater than liablities, but that's having positive net worth, which is not the same as being debt-free."
You: "No he doesn't. Rick defines debt as having less equity in assets than the liability one has for those assets. But I'm sure that's what you actually meant, right?"
Is that a joke? What do you think the definition of "positive net worth" is?
I was merely commenting on the fact that you misstated how Rick was defining debt. Go back and re-read what you typed.
Me: "Eventually, your assets get seized and force-liquidated."
Why do you keep doing this? You keep assumming the worst in order to justify your position that the only "true form of savings is cash in a can or a bank", and that investors and business owners should follow the same financial strategies in managing their financial affairs as wage earners and the self-employed.
As for reading books on finances, I have. I suggest you and everyone else do the same. I especially encourage you to read about the concepts of liquidity, security, inflation, devaluation, and relative value.
Also, do try to remember that advice suitable for one who is mature is not always suitable for one who is immature, and vice versa. How's that old saying go... milk before meat?
Namaste,
John
"If you believe that a savings or checking account in a bank or credit union are the same thing as cash, you're deceived"
Ha ha. "Deceived." You guys like to use that word to describe people that don't agree with you.
"You're used to thinking of them as such for the simple reason that they are an extremely liquid investment with almost no risk."
Good one there.
"don't expect me to buy into your erroneous assertion that the only acceptable savings is in the form of U.S. dollars, because that, to me, is likewise a narrow-minded and short-sighted notion which fails to take into account the obvious devaluation of the dollar that is occurring at what appears to be an ever increasing rate."
Ha ha. Like I said any such thing. Nice try to inject devaluation of the dollar into all this. Try to stay on point.
Ok this is out of control. You guys and your little quips and side issue are irrevelant. I am trying to write some more posts and you guys keep posting side issues and trying to get me to debate those side issues, like whether and money in a checking account is considered the same thing as cash. You are arguing to argue.
Look. Koerber and you guys have twisted church counsel such that you argue that people are following the counsel to avoid debt as long as their assets exceed their liabilities. It is plain on its face. No denying it. And it's wrong.
James 5:9
"Grudge not one against another, brethren, lest ye be condemned: behold, the judge standeth before the door."
Moroni 7:16,18
"For behold, the Spirit of Christ is given to every man, that he may know good from evil; wherefore, I show unto you the way to judge; for every thing which inviteth to do good, and to persuade to believe in Christ, is sent forth by the power and gift of Christ; wherefore ye may know with a perfect knowledge it is of God.
And now, my brethren, seeing that ye know the light by which ye may judge, which light is the light of Christ, see that ye do not judge wrongfully; for with that same judgment which ye judge ye shall also be judged."
Luke 6:37 "Judge not, and ye shall not be judged: condemn not, and ye shall not be condemned: forgive, and ye shall be forgiven"
Luke 6:39-42
And he spake a parable unto them, Can the blind lead the blind? shall they not both fall into the ditch?
40 The disciple is not above his master: but every one that is perfect shall be as his master.
41 And why beholdest thou the mote that is in thy brother’s eye, but perceivest not the beam that is in thine own eye?
42 Either how canst thou say to thy brother, Brother, let me pull out the mote that is in thine eye, when thou thyself beholdest not the beam that is in thine own eye? Thou hypocrite, cast out first the beam out of thine own eye, and then shalt thou see clearly to pull out the mote that is in thy brother’s eye."
Them: "Ha ha. "Deceived." You guys like to use that word to describe people that don't agree with you. "
This is a classic cult technique used by the "elite" members to ostrasize "others" that are not part of the "saved" group. Changing meanings of words is another. "Worshiping" a central leader *cough*RickKoerber*cough*is another. You can easily study cult techniques and other similarities (there's numerous articles and examples on the internet, found in libraries, and studied at universities) that Franklin Squires / Free Capitalist use to (brainwash) keep members inside for the overall benefit and/or gain of the higher up leaders. Do some objective research and you'll easily be able to find other cult-like techniques used. I would imagine that most free capitalist cultis.... ummm.... devotees won't think objectively about it.
Am I saying that Free Capitalist, et. al. is a cult? Maybe... :P What I'm probably really saying, though, is that Free Capitalist has similarities to cult practises and techniques. Buyer beware.
Here is a good article from the church on debt. It's probably too hard to read in the comments here, so I suggest going to lds.org Ensign » 1987 » June and reading it there. But here it is in entirety anyway:
First Presidency Message
Pay Thy Debt, and Live
Ezra Taft Benson, “Pay Thy Debt, and Live,” Ensign, Jun 1987, 3
In the book of Kings we read about a woman who came weeping to Elisha, the prophet. Her husband had died, and she owed a debt that she could not pay. The creditor was on his way to take her two sons and sell them as slaves.
By a miracle Elisha enabled her to acquire a goodly supply of oil. Then he said to her: “Go, sell the oil, and pay thy debt, and live thou and thy children of the rest.” (See 2 Kgs. 4:1–7.)
“Pay thy debt, and live.” How fruitful these words have ever been! What wise counsel they are for us today!
In the words of wise men down through the ages, we find over and over again this great insistence upon the wisdom of being debt free. Shakespeare put on the lips of one of his characters in Hamlet these words: “Neither a borrower nor a lender be: for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.” (Act 1, scene 3, lines 75–77.)
Others have written:
“Do not accustom yourself to consider debt only as an inconvenience; you will find it a calamity.” (Samuel Johnson.)
“The debt-habit is the twin brother of poverty.” (Theodore Thornton Munger.)
“Poverty is hard, but debt is horrible.” (Charles Haddon Spurgeon.)
“I have discovered the philosopher’s stone, that turns everything into gold: it is, ‘Pay as you go.’ ” (John Randolph.)
“Think what you do when you run in debt; you give to another power over your liberty.” (Benjamin Franklin.)
True, times have changed since Franklin’s day, but the principles of truth and wisdom never change. Our inspired leaders have always urged us to get out of debt, live within our means, and pay as we go.
Our own pioneer forefathers have left us a heritage of thrift, of saving, of freedom from debt. Surely they would counsel us today: “Pay thy debt, and live.”
Many people do not believe that serious recession will ever come again. Feeling secure in their expectations of continuing employment and a steady flow of wages and salaries, they obligate their future income without thought of what they would do if they should lose their jobs or if their incomes were stopped for some other reason. But the best authorities have repeatedly said that we are not yet smart enough to control our economy without downward adjustments. Sooner or later these adjustments will come.
Another reason for increase in debt is even deeper and causes greater concern. This is the rise of materialism, as contrasted with commitment to spiritual values. Many a family, in order to make a “proper showing,” will commit itself for a larger and more expensive house than is needed, in an expensive neighborhood. Almost everyone would, it seems, like to keep up with the Joneses. With the rising standard of living, that temptation increases with each new gadget that comes on the market. The subtle, carefully planned techniques of modern advertising are aimed at the weakest points of consumer resistance. As a result, there is a growing feeling, unfortunately, that material things should be had now, without waiting, without saving, without self-denial.
Worse still, a large proportion of families with personal debt have no liquid assets whatsoever to fall back upon. What troubles they invite if their income should be suddenly cut off or seriously reduced! We all know of families who have obligated themselves for more than they could pay. There is a world of heartache behind such cases.
Yes, there is a tendency for all of us to want to keep up with our neighbors, even if our income is low. Sadly, in this respect, we have plenty of company.
In the long run, it is easier to live within our income and resist borrowing from future reserves except in cases of necessity—never for luxuries. It is not fair to ourselves or our communities to be so improvident in our spending that the day our income stops we must turn to relief agencies or the Church for financial aid.
Do not, I solemnly urge you, tie yourselves to payment of carrying charges that are often exorbitant. Save now and buy later, and you will be much further ahead. You will spare yourselves high interest and other payments, and the money you save may provide opportunity for you to buy later at substantial cash discounts.
If you must incur debt to meet the reasonable necessities of life—such as buying an automobile, a house, or furniture—then I implore you, as you value your solvency and happiness, buy within your means and use credit wisely. Resist the temptation to plunge into property far more pretentious or spacious than you really need.
How much better off you will be, especially young families just starting out, if first you buy a small house which you can expect to pay for in a relatively short time. Such a house in a neighborhood where values are increasing will usually provide the basis for a very large down payment on a bigger home when you are ready for it.
True, you can sometimes buy with little or no down payment, and on long terms. But these terms mean that a very large part of your total payments will go to pay interest charges, not to retire the principal of the debt. Remember, interest never sleeps or takes a holiday. Such payments of interest can easily become a tremendous burden, especially when you add to them taxes and repair costs.
Do not leave yourself or your family unprotected against financial storms. Forgo luxuries, for the time being at least, to build up savings. How wise it is to provide for the future education of your children and for your old age.
The smaller the family income, the more important it is that every dollar be used wisely. Efficient spending and saving will give the family more security, more opportunities, more education, and a higher standard of living.
As I look back on the establishment of my own home, I am grateful for a companion who, although accustomed to many of the luxuries of life, was willing to start humbly.
Vividly I recall her doing the washing by hand until we could buy a second-hand washer. There was no overstuffed furniture; there was no carpeting on the floors. As a graduate student on a $70-a-month scholarship, I recall entertaining at dinner the head of the department at the college. He sat down at a card table (which was not used for cards) because there was no dining table. We gathered vegetables from the college experimental plots to cut down on the grocery bill and help us live within our means. Many have had similar experiences in a determination to make ends meet.
Now, when personal incomes are generally high, is the time to pay off obligations. I doubt that there will soon be again a more favorable time for Latter-day Saints to get out of debt than now. Let us use the opportunity we have to speed up repayment of mortgages and to set aside provisions for education, possible periods of decreased earning power, and emergencies the future may hold.
Truly a man does not live by bread alone. A good name is still to be preferred over great riches. Especially is it to be preferred to the appearance of riches, acquired with nothing down and nothing to pay for two months.
Stewardship, not conspicuous consumption, is the proper relationship of man to material wealth.
There may never be a more favorable time than now for most people to get their financial house in order so far as debt is concerned. Yes, let us live within our income. Let us pay as we go. Let us “pay thy debt, and live!”
Cry unto the Lord for strength to heed the counsel of the oracles of God. The prophet Amulek said: “Cry unto him over the crops of your fields, that ye may prosper in them. Cry over the flocks of your fields, that they may increase.” (Alma 34:24–25.)
May I add this to Amulek’s counsel: Pray to the Lord over your debts that they may be paid. Pray to him for faith to get out of debt, to live within your means, and to pay as you go. Yes, “Pay thy debt, and live!”
My brothers and sisters, let us heed the counsel of the leadership of the Church. Get out of debt! Let us pay first our obligations to our Heavenly Father. Then we will more easily pay our debts to our fellowmen. Let us heed the counsel of President Brigham Young, who said: “Pay your debts, … do not run into debt any more. … Be prompt in everything, and especially to pay your debts.” (Discourses of Brigham Young, comp. John A. Widtsoe, Salt Lake City: Deseret Book Co., 1954, p. 303.)
President Joseph F. Smith added: “In the time of prosperity … get out of debt. … If you desire to prosper, and to be … a free people, first meet your obligations to God, and then … to your fellowmen.” (Gospel Doctrine, 5th ed., Salt Lake City: Deseret Book Co., 1939, pp. 259–60.)
President Heber J. Grant counseled: “Tithing is a law of God. … Be honest with the Lord and I promise [the Latter-day Saints] that peace, prosperity, and financial success will attend.”
“Let me warn the Latter-day Saints to buy automobiles and to buy the ordinary necessities of life when they have the money to buy them, and not to mortgage their future.” (Gospel Standards, comp. G. Homer Durham, Salt Lake City: Improvement Era, 1941, pp. 60–61, 111.)
Brothers and sisters, peace and contentment come into our hearts when we live within our means. God grant us the wisdom and the faith to heed the inspired counsel of the priesthood to get out of debt, to live within our means, and to pay as we go—in short, to “pay thy debt, and live.”
Ideas for Home Teachers
Some Points of Emphasis. You may wish to make these points in your home teaching discussion:
1. As Latter-day Saints, we have always been urged to get out of debt, live within our means, and pay as we go.
2. If we must incur debt to meet the reasonable necessities of life, let us buy within our means, use credit wisely, and never tie ourselves to exorbitant carrying charges.
3. Let us not leave ourselves or our family unprotected against financial storms.
4. If possible, we should pay off debts now.
5. Let us pray that our debts may be paid, that we may live within our means, and that we may pay as we go.
Discussion Helps
1. Relate your personal feelings about the soundness of the counsel “Pay Thy Debt, and Live.”
2. Are there some scriptures or quotations in this article that the family might read aloud and discuss?
3. Would this discussion be better after a pre-visit chat with the head of the house? Is there a message from the bishop or quorum leader?
I was sent an email a little bit ago from the FreeCapitalist project about supporting Chris Cannon. What I am about to write here doesn't have anything to do with the discussion of "debt," but it does have something to do with the definition of terms.
On Jun 23rd an email was sent out from the free Capitalist Project urging support for Chris Cannon. what I found amusing was that the first of the "four key points for Utahan’s to consider" was "Emigration."
A few excerpts below (the only thing I changed was make the word "emigration" bold):
"1. Emigration
Many Republicans rightly consider emigration a hot-button issue. Chaffetz criticizes Cannon for his supposed failures - but what are they actually? I had the opportunity to visit personally with Mr. Chaffetz, and when pressed, his argument boiled down to an example where Congressman Cannon missed one of perhaps twenty emigration related votes. This supposedly demonstrates, according to Chaffetz, that Cannon doesn’t really want to solve the emigration problem."
...
"Now, to get even more to the point. Even if Utahan’s were to consider Cannon’s performance on emigration poor- as Chaffetz suggests-the real question is, does unseating one of the most Conservative voting Congressmen in a Democratically controlled Congress increase or decrease the likelihood of real emigration reform happening in the near future? The answer is obvious."
[end quote]
Do we have an emigration problem in the U.S.? or an immigration problem? Ha ha. People are fleeing the state of Utah, I guess, and we need strong leadership to fix that problem. ah, it still make me laugh as I write this.
Now, I realize that this was just the wrong word used, but the wrong word was used repeatedly, and this from a group of people who accuse others of having their "brains off." No wonder Cannon lost.
This article has been corrected (almost, but not quite-haha) on the blog, but the original email has the wrong words just like I quoted above. But if you do a word search on the "corrected" blog article, there is still an error http://fcd.freecapitalist.com/2008/06/23/cannon/ ("he has also been supported by pro-free enterprise organizations including those with a pro-emigration reform interest").
too funny
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