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5 Ridiculous Myths About Debt

When people want something, they can think of incredibly stupid reasons to justify their actions. I’ve seen my friend get brainwashed into almost all of these myths about debt time and time again. In fact, here’s some examples that I can think of just off the top of my head:

  • he bought a $13,000 car (that barely fits a car-seat) for his wife and child “because of its safety ratings”…
  • he bought a wireless thermostat so he can control his house temp while he’s at work (…did I mention his wife stays home all day?)
  • he bought a projector for $200 because usually they’re $600. Did he need a new “TV”? Nope… he just couldn’t pass up the deal

5 Ridiculous Myths About Debt

I often wondered what goes on in my friend’s head, but to be fair he’s not the only one that’s buying stupid stuff. 99% of America is right there with him! And the things that drives me nuts? The majority of these stupid decisions are putting people in debt!

Throughout my 31 years of life on this earth, these are the top myths about debt that I shake my head at every day:

myths about debt1) Debt is a Tool for Wealth

This is something that every Finance undergrad learns:

“Taking on debt can improve your financial standing in business. In fact, sometimes it’s necessary to keep up with demand.”

Somehow this business logic has become common practice for individual consumers as well. When they hear, “debt is a tool for wealth”, they somehow figure that their car payment and student loans are smart. This absolutely NOT the case and is one of the biggest myths about debt out there.

Warren Buffett is worth over $65 billion today. He basically started with nothing and is now the third richest person in the world. IN. THE. WORLD. People that don’t know Buffett always expect him to say something brilliant about stocks, bonds, and investing in general. In reality though, his message for the public is always super simple.

“Get out of debt, live below your means, and invest heavily.”

Debt is NOT necessary to become wealthy. Stop using this statement as a crutch to buy stupid stuff on credit. If your purchase isn’t driving money to your mailbox each month, then don’t buy it. It really is that simple.

2) Everyone Has Debt

Yes, more and more people get into debt every year (as a matter of fact, 8 in 10 people currently have debt in America), but that’s still a far cry from “everyone”. And, even if 80% do have debt, does that make it smart? Ummm, not even close.

Tell me this, which situation would you rather be in?

  1. You have a BMW, a 3,000 square foot house on 10 acres, you have no retirement fund, and you can’t pay all your bills at the end of the month.
  2. You drive a 2009 Ford Fusion, you own a 1,500 square foot house, your retirement account has $500,000 in it, and you have $1,000 of extra cash each month.

If you want option one….just stop reading now. I don’t think even I can help you.

If you would rather live out scenario #2, then why would you follow the crowds and get into serious debt? Stop listening to these myths about debt. Be different and decide to actually have money.

myths about debt3) I Can’t Survive Without Debt

This one blew me away. Nearly 70% of Americans believe that they wouldn’t be able to survive without debt! And we’re not even talking about mortgages at this point; 70% of the population thinks that they can’t possibly survive without student loans, car loans, and credit cards. WHAT??!! REALLY??

Here’s how I dispel each one of these types of debt:

Student Loan Debt – Work hard when you’re in high school. Apply for hundreds of scholarships. Save up as much money as you can. Go to a local university (they’re cheaper). If you don’t have the money to pay for school, then you shouldn’t go.

Car Loan Debt – Live near where you work. Drive a mediocre car until you can buy a better one with cash. If you can’t afford a car, ride a bike, walk, or take the bus.

Credit Card Debt – If you don’t have the money, don’t buy it. If you can’t handle this, cut up your cards.

There, simple. That’s how you survive without debt, people.

4) I’ll Always Be In Debt

Old people should not be in debt. I mean, why would anyone want to get old and decrepit, still paying a mortgage payment and a car payment every month? Who signed us up for this?

But, that’s the mindset that society is leading us into. For the economy to be thriving, we should all be spending money, even money that we haven’t yet earned. Even financial experts are telling us it’s a good idea to hold onto our “cheap” mortgage… even into retirement.

This is exactly why 21% of 75 year-olds have debt today vs. just 8% a decade ago. They’re old, unable to work, and they’re empty inside because they know they’ll never leave they kids an inheritance. Just debt.

In reality, almost anyone can get themselves out of debt. My wife and I are 31 years old and we don’t have a single ounce of debt – not even mortgage debt. And no, we’re not powerhouse lawyers and doctors, just regular people with regular jobs that decided to tackle their debt with a vengeance.

Almost anyone can rid themselves of debt at any age. All they have to do is decide to renounce these myths about debt, and then kick butt.

myths about debt5) I’d Be Miserable Without Debt

And then there’s the people that have a deep connection with their stuff – their house, their car, even their watches. These people are materialistic. Plain and simple.

They believe that their stuff is what makes them happy, and without it they would be absolutely miserable. It’s a pretty sad way to live to be honest with you.

If you couldn’t bear the thought of doing without your car or your clothing, I personally think you should give it a shot and find out. I did this about three years ago and I learned things about myself in a few short weeks that I probably wouldn’t have discovered for years otherwise.

I left my car in the garage. I sold my couch, my dining room table, my video game consoles – anything that I felt I was tied to – and I just did without them for weeks. For some items, months.

You know what I discovered? I was happier without them.

I discovered the joy of exercise, the outdoors, and the simplicity of companionship without the expensive restaurant. What mattered was people, experiences, and my faith – not my stuff.

The quicker you dispel the myth that stuff makes you happy, the faster you’ll actually start loving life and living it for real.

Are you ready to ditch these myths about debt?

Battle of the Mind Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I needed this article today. Every time I start on my debt snowball, everyone around me laughs and says it’s completely impossible and has all these myths as their excuses! So glad to read this today. I’m printing this and putting it on my refrigerator! Thanks!

    • Don’t be discouraged Dawn! Sounds like you just need some new friends! I mean seriously, what kind of people would discourage you from getting out of debt and being happy? Keep reading my articles Dawn and ignore the nay-sayers. I started with debt, worked my butt off and got out, and it’s the best thing I ever did!

  2. I’m surprised to hear 80% of people have debt…but not surprised at all.

    I was reading an article about how the average household has under $1,000 in a bank account. There were actually many comments saying how you don’t need to have any money saved because you can finance any emergency repairs or surprises that may pop up.

    I swear this mindset is a disease.

    • That stat is pretty sad isn’t it? People are starting to think they’re smart for not saving money. What they don’t realize is that they’re not net is not nearly what it could be! I agree with you, the mindset is definitely a disease.

  3. Great post, Derek!

    Lots of my friends with student loan debt often get discouraged with their repayment. I do think this is typical, though. What truly matters is how they respond! Some work extra jobs, freelance, and do other things to attack the issue head on. Other friends, unfortunately, feel bad for themselves and do nothing about it, leading to missed payments and an even worse problem!

    • It’s pretty sad. Many of them pay very little attention to their debt while they’re in school because they just assume they need student loans to get by. Unfortunately, they never stop and think that maybe a lower loan total would be better than a larger loan total! Then, they mope around after graduation because their job can barely cover the monthly payments.

  4. Removing things you feel too tied to is a great practice. Controlling your life by your values matters so much.

    • For sure! For those that buy expensive cars and park them way in the back of the parking lot to avoid door dings…you probably shouldn’t own that ride…

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