Thursday, September 9, 2010

Author Spotlight: "Renters Win and Home Owners Lose" by Tom Graneau

Today I am pleased to introduce you to Tom Graneau who is the author of "Renters Win and Home Owners Lose". He has been kind enough to write an interesting and very informative article for the readers of Just One More Paragraph. Make sure to stop by tomorrow and see my review of "Renters Win and Home Owners Lose".

Dumping Some of Your Liabilities May Save You From Drowning in Debt

Humans are prone to errors. We make blunders in every segment of life including individual issues, family matters, relationships, and more.

Errors could be averted if each of us had a guardian angel pointing us in the right direction before making decisions. But then again, life would be boring because everyone would be doing everything perfectly. Be that as it may, life continues as we know it. 

Mistakes, however, carry consequences, and some are irreversible. For example, you may have the opportunity to go back to a friend and apologize for a slip-up, but sinking thousands of dollars in a bad business deal is usually unrecoverable.  

If we accept the idea that mistakes are commonly tied to the human condition, we can also assume that people will create financial blunders. 

In fact, personal finance is the most common area for human errors. Many of us have purchased more “stuff” on credit than we care to admit: timeshares, expensive cars, boats, etc. At the time, it was the right decision. However, two or five years later, these items have become financial logs, weighing us down into financial ruin. 

If you’re sinking deeper into debt as a result of “stuff” you’ve purchased on credit, consider another alternative. While you may feel obligated to honour your financial commitment, you may want to mimic the action of vessels on rough seas trying to make it ashore safely. Those onboard become acutely aware of the most important thing—their lives. Then “precious cargo” gets thrown overboard to lighten the weight and ensure safety. 

You can do the same. Place those “image-building” items  in the category of bad financial decisions and dump them! Return them to the rightful owners and free yourself from their noose.

Many of these items are assets of the seller and can be resold for additional revenue. Besides, the interest you’ve paid so far may have already covered their entire cost or value. 

Some people will think that this type of action is irresponsible, but frankly, I see it more like saving yourself. Besides, I see no difference compared to some common habits in our culture. Consider the following points:
  • Repossession: If you’re unable to make payments on the items you purchase on credit, the lender will not hesitate to take them from you and resell them. If the item is your car, you will have to hitchhike to work the following day. If it’s your house, you will suddenly become homeless.
  • Divorce: In terms of importance, nothing ranks higher in our culture than marriage and family. Yet, when people become angry or disappointed with their mates, they discard them with little or no thought of consequences. In most cases, children are caught in the middle.
  • Items returned to stores: Many people return items to stores without a second thought. While some stores grant us the privilege of returning broken or damaged goods, many of us abuse the opportunity. Two years ago, I read about impulsive shoppers that consistently return half of the items they purchased because of buyer’s remorse.
  • Stock investors: Our unstable economy have caused many Wall Street investors to put the breaks on gains for fear of losing their investments. Some have dumped billions of dollars worth of stock as they fled to safety while giving little or no consideration to the impact on companies and the economy.
“But what about my credit report,” you ask, “and how will that be affected when I return these items?”  

Large liabilities like cars, houses, timeshares, etc., which are voluntarily returned or repossessed, do lower your FICO (credit) score. That is the controlling mechanism built into the credit system. 

If you plan to depend on credit for the rest of your life, a lower credit score could be a problem, at least temporarily. But if you choose to liberate yourself from the dependency of credit, once and for all, and develop a personal policy of conducting most of your business with CASH, you will not only spend less but also improve your financial condition. In fact, taking steps to dumping the liabilities that are depriving you from financial freedom is a bold move to a new beginning. 

Sometimes, it’s necessary to do one more unpleasant task to fix a problem, as long as you don’t repeat your mistakes in the future.

Tom Graneau is a personal financial management coach and author of a new book, Renters Win, Home Owners Lose: Revealing the Biggest Scam in America. If you are tired of the bondage of debt and want REAL answers to personal freedom and financial independence, begin by turning things around with a no-nonsense approach to your housing option.

"Renters Win and Home Owners Lose" was supplied through Pump Up You Book for me to honestly review.

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