According to Oxford dictionary, the word ‘debt’ refers to payment which must be made, but has not yet been paid to somebody. You get into debt if you buy things on credit; take a long-term loan (e.g. car loan, computer loan) or a short-term loan (e.g. bank overdraft or unpaid credit card bills). When you owe money, you have the obligation to return. The bank or financial institution that loan you the money has the legal right to obtain court order to enforce any contractual obligation which you have agreed.
In my opinion, generally there are two kinds of debts: ‘good’ debt and ‘bad’ debt. ‘Good’ debt is loan which you obtained to purchase investment products where it is likely to appreciate in value over time in the long-term, for example: property, gold, antique and other collectible items.
‘Bad’ debt is loan which you take to purchase consumer products that do not appreciate in value, instead depreciate over time, for example: the computer, laptop, iPad, hand-phone and furniture. Borrow money to speculate in stocks and buy things to satisfy your addictions are obviously the most outrageous kind of debts.
Before you take out your credit card to buy anything, ask yourself: “Can I afford to settle my credit card bill when the bank statement arrives the following month?” If your answer is ‘no’, I suggest you don’t buy on credit. Even if you can afford to pay your monthly bill, convince yourself that it is really a need before you commit. Whether you need the product or just because you want to own it, you should ask yourself further questions: “How often am I going to use it? How many people are going to benefit from my purchase?” These questions are especially crucial if you are buying big ticket items such as an expensive luxury car, boat, holidays for a family, etc. Some people have the habit of buying things on credit and with loan without checking their financial status.
How we incurred mountain of ‘bad’ debts? Through speculation of stock, my husband lost enormous amount of money. The root cause of stock speculation is the anxiety to become rich in the shortest possible time. I was kept in the dark until it was revealed to me during the Asia Financial Crisis.
Do not be deceived and say that speculation in stock is a form of investment if you treat it like an online ‘casino’ when you buy and sell stocks within a few days or weeks. He timed the market, traded heavily in stocks with borrowed money. He borrowed way beyond his capability by pledging his profitable stocks as collateral with a few security firms. When stock prices spiral downward, margin call was activated; and he has to top-up the difference he lost. The problem began when majority of his stocks dropped during the Asian Financial Crisis. I was kept in the dark as he aggressively speculates stock for many years. After his lost, he revealed how he concealed his trail as he traded heavily.
All these years, I have difficulty discussing financial matter with him and I dislike arguing with him. However, the only thing that I insisted on was to get him to buy life insurance for himself and me. If due to any reason that I am not around or lose the ability to take care of my young children; he needs the insurance compensation to pay for a full-time care-giver to look after them. He was willing to buy term-life insurance plans as it was inexpensive. I was thankful that he bought them as I was a full-time home-maker prior to his financial crisis.
The money he lost via speculative stock trading is enormous and beyond comprehension. In total, he lost close to a million dollars. My son was eight month old, my eldest was six and my mum had just passed away about a month earlier when he broke the devastating news to me. I was dumbfounded and in despaired as I didn’t know what to do. Fear arose and my heart aches over his irrational and irresponsible act. I agree with Proverbs 15:27 “He who is greedy for gain troubles his own house,…
For the first time after more than a decade, I got to see the balance in our joint-saving book. It was disappointing as the available balance is insufficient to pay for our monthly family expenses.
THE NEGATIVES EFFECTS OF ‘BAD’ DEBTS
1. Personal health and relationship suffered. Our daily conversation was revolved around money and debts. When our relationship deteriorated, our children’s emotional and psychological developments are affected. My husband went into depression and became very reserved. He refused to seek treatment and our relationship suffered. I felt guilty for not being able to give my children a decent childhood with happy memories. Instead they remembered the ugly side of a broken relationship.
2. No time for life. I was physically and mentally exhausted by demand from both at home and at work. During a period of time, I was holding on to two part-time jobs and study part-time for a diploma certificate. In addition, I have to attend to my young children’s needs and the unending household chores. I felt terrible and have insomnia. I have no personal time. My mind was constantly preoccupied with worries and fear. My body was over-worked and I fall sick constantly. Life was meaningless as we are trying to make ends meet.
3. Living in constant fear and agony. There were constant arguments during the initial few years. I discovered accidentally that he secretly speculates in stocks in the midst of his financial woe. I was upset that he incurred additional debts although his intention was to reduce his lost. We had many arguments subsequently and my eldest was fearful that we might end up in divorce. I have decided to forgive my husband and start afresh, but it was not going well for him as he became reserved and kept to himself.
4. Peace, love and happiness are robbed. Both of us have countless sleepless night and talks over our financial woe. We were extremely stressful. As for my husband, he resent himself for causing misery to the whole family. He was stressful with debts and worries a lot. He suffered from guilt and lives in agony for many years. Debts had robbed us of our peace, love and happiness.
4. Enormous ‘Bad’ debt is likely to cause stress and may lead to premature death. Stress is detrimental to health. Dr Terea Aubele, in the book, ’Train Your Brain to Get Happy’, which she co-authored wrote: “Chronic stress kills…… literally. It’s been widely shown to have disastrous physical effects, but did you know that chronic stress also diverts energy from your brain (fogs up your mind), shrinks your hippocampus (slows memory and learning), compromises neurotransmitter (limiting joy and plasticity), and even emits toxins that attack your brain? Forget zombies; stress eats your brain! Doing things that are physically and mentally stimulating and energizing is fine, but they also have to be relaxing –with an emphasis on fun!”
I believe this truth resonate with what the bible said in Proverbs 17:22 (NKJV) “A merry heart does good like medicine, but a broken spirit dries the bones.”
We took ten years to clear all of the debts. It was unfortunate that about six months after the debts were cleared; my husband was diagnosed with brain cancer (anaplastic astrocytoma & oligoglioma grade 3/4). He suffered for more than three years before he went home to be with the Lord. I still feel sad that he died before his time and suffer pain till the last day of his life. It is sad that he has to die at the age of 45 when most men his age are at the prime of their career and enjoy the fruits of their labour.
According to the doctor, the cause of brain cancer is unknown. From my own research, I found out that brain tumour took as long as ten years before it becomes cancerous. I believe that chronic stress was one of the main causes of my husband’s brain cancer since there is no history of cancer death in his family. I believe there is some truth in Proverbs 1:19(NKJV) “…..the ways of everyone who is greedy for gain; It takes away the life of its owners.”
IMPORTANT LESSONS LEARN
1.BE WISE AND AVOID MAKING FOOLISH CHOICES
The reason why my husband had gone into financial crisis is because he was unwise and ignored constant warning on the danger of speculative stock trading. He was anxious to gain wealth so that he could leave his job and do the things he loves.
The bible said in Proverbs 3:21-24 ‘……….. Keep sound wisdom and discretion; So they will be life to your soul And grace to your neck. Then you will walk safely in your way, And your foot will not stumble.’ (NKJV)
Like I have shared in my earlier blog, stock/Forex and commodity trading is not for anyone. You need to have the knowledge, training, spare cash, discipline, stable emotion and the wisdom to execute right financial decision, otherwise it can be perilous. No one with wisdom would use borrowed fund to speculate in stock/Forex/commodities trading or indulge in any kind of addiction/obsession.
2. NEVER INVEST UNWISELY WITH BORROWED MONEY
It is not just about how much you can save and invest that matter, it is more important that you make wise financial decision so as not to cause your health to suffer or hurt your family members with its potential risk. Never invest unwisely with borrowed fund. Invest with money that you can afford to finance without putting a strain on your monthly income. And INVEST ONLY WITH SPARE CASH.
3. DON’T ALLOW GREED AND ANXIETY TO GET RICH RULE YOUR HEART
There is no ‘get-rich-quick’ and ‘easy-to-riches’ formula. You need to be prudent and avoid pitfall. Do not allow your greed or your anxiety to get rich within a certain time frame cause you to make wrong decision. Be considerate for your own health, your parents, spouse and children. Before you decide to make major decisions, think through the consequences and imagine how your actions would affect your life and the lives of those whom you care.
4. TRIALS AND TRIBULATIONS ARE PART OF LIFE JOURNEY
Life is a journey and it is inevitable that we have trials and tribulations along the way. The crucial thing is to recognize our mistake, repent and seek forgiveness from our love ones who suffered as a result of our bad choices. Love is about true repentance and forgiveness. If you choose to forgive and continue to love whoever that hurt you, there is hope in any relationship; provided there is true repentance and forgiveness.
5. FORGIVE YOURSELF AND OTHERS TO SET YOUR SELF FREE
Do not allow you and your family to be deprived of the peace and joy of living because of ‘bad’ debt. Even if you have made the wrong choices, you don’t have to ‘beat’ yourself up. Forgive yourself and move forward. Take it as a life lesson and move on. Don’t harbor over your lose and blame others or yourself for making foolish mistake. Self-blame can be very stressful and it is detrimental to your health in the long-run. If you cannot forgive yourself, it is unlikely that you will forgive others who wrong you. Set yourself free from the bondage of guilt and resentment; forgive yourself and others.
6. NEVER IGNORE GOOD ADVICE, ESPECIALLY THOSE OF YOUR SPOUSE AND PARENTS
Your parents and spouses are the most important people in your life. They love and care for your well-being. They wish for the best in whatever you do. They won’t want to see you get hurt. Think over what they said and if there is any wisdom in it; take heed and avoid costly mistake. In your pursuit for success, do not allow your thirst for wealth to make you turn blind eyes to the potential pitfall ahead of you.
Never underestimate the effectiveness of a loving wife or a mother’s advice for they have what I called ‘woman’s wisdom’ or some call it ‘woman’s instinct’
I hope that you have learned something that is of value to you after reading my experiences. Whatever situation you may be in right now, do not be despair. Do not fear but face the ‘giant’ with faith. If you have Christ in you, you need not fear. For it said in Isaiah 54:17 (NKJV) “No weapon form against you shall prosper. And every tongue which rises against you in judgement You shall condemn. This is the heritage of the servants of the LORD,, And their righteousness is from Me. Says the Lord.”