Who owns your new shoes?

Here is the reality: we all use debt at some time in our lives. It is normal. In fact sometimes it is downright smart to do so. Of course, sometimes it isn't used so smartly.

Regardless of whether we are being smart about using debt or not, many people forget a really fundamental principle:

Your debt is somebody else's asset.

If you ever wanted a reason to get rid of debt then that is it. Your debt is someone else's asset ..."they" own "it". "They" expect a return on that asset, and ideally they would like an income stream forever on their asset. The "someone" who owns the asset that you are paying off would probably prefer that you never paid it off. You are worth more to them while you stay in debt.

The thing that you used debt to purchase is only ever fully yours when there is no debt left. Whether that is a house, a business or a pair of shoes bought on a credit card: it is not yours until you have paid off the debt.

Reality check: you don't really own the new shoes bought on the credit card if you still owe money on the credit card. The bank owns the shoes.

I am not saying "don't use credit cards" or even "don't buy shoes". Both are pretty useful things to have.

What I am saying is understand the difference between you managing debt, or it managing you. If you aren't managing debt, then you are somebody else's asset.

Who wants to be someone else's asset?