Debt Consolidation and Tattoo Coverups

A friend of mine had a tattoo on her forearm that after a while she grew to dislike, so she decided to see a tattoo artist and have that artist (evidently a renowned artist) see what could be done with the tattoo. It was decided to cover up the first tattoo with another tattoo that might be more aesthetically appealing.

Bad Gibberish Tattoo

This tattoo says, taken advantage of (according to Hanzismatter), I guess they were

The artist did his magic, and now a simply line drawing of an amphibian, has morphed in an elaborate colorful collage with an interesting phrase. The replacement is about 300% larger than the original tattoo in terms of surface area. I hope my friend enjoys the “cover up” tattoo, but it got me thinking that this seems much like the constant refinancing, and blending of debt (into other debt vehicles) that many folks seem to be doing these days.

Covering up debt is not making debt go away, and while consolidation loans can make it convenient to have all (or most) of your debt in one (hopefully lower interest) debt vehicle, if you continue to live the lifestyle that got you into debt in the first place, you really are only making the debt bigger (much like the tattoo).

If you are using a Debt Consolidation loan to get control of your debts, make sure you have a solid plan in place to pay down the debt, and make sure that you are not growing the debt further. Debt Consolidation loans are simply a tool, they are not a cure, and as with all tools if you are not using them correctly, you can make one hell of a mess.

Mrs. C8j has pointed out that more than a few advertisements for Consolidation Loans imply that once you get the loan, you are “Out of Debt”, but your debt has not changed it is just all in one place. You are out of debt when it is paid off.

Another good point with the tattoo metaphor, at least my friend went to a professional to get the “touch up” tattoo (and didn’t rely on a friend of a friend who did these for fun). If you are thinking of a consolidation loan, see a professional credit councilor (or a similar financial service).

 

 

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Optimize Your Budget for Any Debt Level

You’re not going to believe the trick I use while budgeting to pay down my debt load.

Optimized Budget

Your Budget Will Be Optimized

This may solve your debt problems simply and if you want to know how it works, click below.

👀 Click here if you want to find out this amazing trick 👀

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Debts are Like Weeds

A short one for today

Dandelion

Bloody Weeds

Debts are so much like Weeds, removing them (one by one) seems like an insurmountable task, yet, if you go at it a little bit at a time, in a shorter period than you thought, they are all gone, but you have to stay diligent or they will continue to dominate everything.

There is your lawn and finance tip for the day, if you want a fitness tip read Debt is Like Fat .

 

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Let’s make life simple for my return from vacation, and get back to basics, so let’s kind of head towards Jeopardy’s model, and here is the answer that you need to ask a question for: Get out of Debt

get out of debt

Working Through Debt Problems

How hard could that be, let’s see how many interesting questions that could have that simple response:

  1. My wife feels that while our relationship is good, she wants us to be much closer, what should I do?
    Get out of debt, that way you don’t argue about money any more, and you can concentrate on the important things in life.
  2. I feel worried all the time, and I have a hard time sleeping these days, how could I fix that?
    Get out of debt, you will then have 1 less thing to worry about. This is the simplest thing in your life to start fixing, so get at it
  3. I never have any money in my wallet, and I am living from pay cheque to pay cheque, which has caused me to be impotent, what should I do?
    Get out of debt, seriously if your money worries are giving you issues with your love life, you really should get the hell out of debt.
  4. I am staying at my in-laws and they are driving me insane because they keep asking me when we are going to move out and have our own place, is there anything I can do?
    Get out of debt, you are living with your in-laws, ’nuff said! Oh and definitely move out if your in-laws live in Debt, Ontario.

Just had to get that one off my chest. Were there any questions that I might have missed?

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Who Cares About Debt I Only Pay 2% on my Mortgage

That was the gist of a comment left on my post Let’s Define Debt Free (which you might have seen yesterday on my Twitter Feed).

Interesting point of view that I don’t agree with for a lot of reasons, but mostly because rates are not going to stay this low for that much longer, but even with that aside, I have never been a big fan of borrowing money to make money.

I lived through the dog days of the 90’s in the High Tech World, where our CEO attempted to rationalize how for every dollar that Nortel borrowed they made $3 back, it never really made a lot of sense to me at the time, and at the end of it, maybe I was correct in my assumption that this didn’t make any sense. I realize that most businesses do have to borrow to get on their feet, but to continuously borrow without paying off debt has always seemed rather fool-hardy to me.

Yes, I could have made a crass comment about how one "poke" from debt could deflate this balloon

Yes, I could have made a crass comment about how one “poke” from debt could deflate this balloon

Getting back to the statement of why should I pay off debt when I can make more money investing, depending on what you are investing in, how long do you think the gravy train will last? If you have a Mortgage at 4% that you are simply paying down as needed, but you are investing that extra money in the Market currently, you most likely are ahead of the game (i.e. making more than 4% back on investments), but are you sure that is going to last, and are you taking your profits?

This is my other concern, I had many colleagues and friends who were “on paper” millionaires, but never took their profits (and jumped to the wrong conclusions). Many folks did one of the following:

  • Never took out their profits, and they kept thinking that the bubble would keep growing (it didn’t).
  • Borrowed against perceived profits, using their stock as collateral for loans to either buy oversized houses or extravagant vacations, those loans were called when those stocks went bust.
  • Fiddled while Rome burned (i.e. didn’t get out because they kept thinking things would get better) (yes I was very guilty of that too).
  • Sold, took their profits, but then invested in even riskier stocks (remember Pets Inc., or Groceries to the Door?). Some of those risky stocks burned through cash and then just shuttered the windows.

These are some of the reasons I am paranoid about Debt (yes I said paranoid) and feel it is a much better “investment” to pay it down, than invest in anything else.

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