In Focus Risk


Debt or no debt? A resolution to a matter of heated debate


Discussing the morality of credit and the cash-less society in practical terms


Arthur Kaufman Independent writer and speaker arthur35art@hotmail.co.uk


Payer: I cannot see why you allow yourself to get into so much debt? It must be very worrying. Debtor: You are the one who should be worrying. Think of how much money you are losing.


Payer: How can I possibly lose any when I have not borrowed even a penny? Makes no sense. Debtor: Look at this credit card of mine. It saves me a fortune. You should have one.


Payer: You must be joking, since you will never stop owing that company money. I hate to think how much, with interest creaking up by the hour. Debtor: Look, if I pay what I owe at the end each month, I do not get charged interest. And, if I want to buy some expensive furniture at half price during a January sale, I can use the card and save a bomb when I do not have enough cash on hand. That is what I call thrift!


Payer: What happens in the meantime if you lose your job? Debtor: I am insured for that.


Payer: Does it cover more than household expenses? What if you become disabled or your firm goes bust? And, I see you have got a nice new car on a three-year lease, are you covered for that as well? Debtor: If everyone who borrowed money or bought things on credit had your attitude, then nearly all of commerce would grind to a halt. Most people would even be afraid to cross the road in case of being knocked down


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At least I am not living in the past. If every business and government did not borrow money sensibly, there would then be a serious lack of investment in the future. Of course, there is always an element of risk involved, it is like crossing the road. But. without taking some risk, you will never get to the other side!


and unable to work. Life is full of risks you know.


Payer: There is a big difference between taking sensible risks and going overboard in buying whatever you want just when you want it, even if it is on sale, especially when it is something that is not really essential. We do not buy our kids everything they insist on having. Besides, they should learn to save up for what their spending money does not cover. Even more important, as adults we should set a good example. By choice, I do not even want an overdraft facility on my bank debit card. Debtor: Look, if you had any children, or three kids as I have, you would soon find out what peer pressure is all about. Do you have any idea what smartphones and computer games, or how much the latest in ‘must have’ sneakers, cost? These days,


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credit and having more than one credit card is a necessary fact of life. And, by switching cards, you can take advantage of the best rate of interest. What could be more enterprising?


Payer: Are you trying to tell me that you save money by spending more than you actually earn, and that you always have a large amount of total debt while constantly having to waste time by keeping track of who is offering the best deal? Do you keep changing supermarkets because of slightly lower prices on bread and baked beans? If time is money, you are not making the best of either. You are also always fretting about having to pay too much interest. What a way to live? Debtor: At least I am not living in the past. If every business and government did not borrow money sensibly, there would then be a serious lack of investment in the future. Of course, there is always an element of risk involved, it is like crossing the road. But. without taking some risk, you will never get to the other side!


Payer:What you are talking about is taking a short-cut instead of crossing the road at a proper place. You are ignoring what happened in 2008 when the big boys and multi-millions of little guys threw all caution to the wind, and crossed the point of no return, which even more millions are still trying to recover from. Debtor: Everybody makes bad decisions once in a while. But look at how much the world and how so many individual lives have improved between the 1930s and


October 2018


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