Let's Play Make Believe
By Keith Bunn Jr.
January 13, 2013
I know most of the American people believe that the wealthiest Americans should pay and give more than the rest, making things more equal.
So let's make believe that that day was today! We all magically had the same dollar amount in our bank accounts, right down to the last penny. Wow, that would be great! We are not broke anymore. We are 100% equal! No more lower, middle, or upper classes! We are now ONE CLASS!!
Now let's go a step further. Let's now make believe that all our debts are now forgiven. No more car loans, tax debts, mortgages, credit card debts, student loans. Heck, even that big monster flat screen TV you just bought on that in-store credit card, That's all gone! We all owe nothing and we get to keep everything! That's just too cool!!! We are ALL DEBT FREE AND ONE CLASS!!!
WE ARE ALL, NO DOUBT ABOUT IT, COMPLETELY, 100% EQUAL!!!
Now that we're all on the same page and have a clean slate to start our day, month, and year with. How long do you think it will remain that way? What I mean is, how long do you think it will take before the classes start to divide again?
Because they WILL divide into the three classes again and if you don't think that would happen, you're fooling yourself. On top of that, people will start building up masses amounts of debt again. If for anything, just to keep up or build up their credit scores.
Why the Three Classes would Reappear
This is why I think it will happen. Study, after study, after study have proven that those who are not use to having large sums of money, don't know how to handle it and waste it. In fact, it has ruined people's lives to the point that they were better off before they received the money. Just looking at some of the people who won the mega lotteries and have lost everything within a matter of years after winning the money.
And why do I think debt amounts will go up again? Well, when all our debts were wiped clean, that severely damaged all of our credit scores. 35% of our credit score is based on our debt payment history. When a debt is not fully paid off because it was forgiven, it leaves a ding on your score. 30% of our credit score is based on our debt levels. When any one of us starts to become debt free and we pay off our debts, our debt levels start to go down, which starts to make our credit scores disappear. So by all of us becoming debt free, that put a huge ding on our scores. 10% of our credit score is based on the different types of debt we have. Again, because all our debts were forgiven, we don't have any debts. So again, we will all take another, pretty big hit on our credit score. If you've been counting, that's about a 75% smack to our scores.
Just by that example alone, people will start going back into debt. Because there are those of you out there that believe we can not live without a credit score. So those people will start using their credit cards like crazy, buying cars with loans, getting new mortgages, etc, etc, etc...
Now don't get me wrong. Not everyone would do this. There are those out there that would see and treat this as a huge blessing. They would save and invest their new found funds and NEVER go back into debt again. We would be one of them!!!
And thus, the 3 classes will appear again! Some of the people will shift around to new classes and stay there, but in my opinion, most will stay right where they were at the beginning. The lower class will be broke again because they won't know how to handle their new found wealth. The middle class will fall back into debt, worrying about their credit scores. And the upper class will become wealthy again because they know how to handle money, and they won't go into debt because they are not worried about their credit scores. They know that a high credit score is not what makes them wealthy, having money does!
So my question to you is...
1) What would you do if your slate was wiped clean and you were 100% equal with everyone else?
2) How long do you think it will take before the 3 classes will reappear? 6 months, 1 year, 2 years, or not at all?
3) If the classes did reappear, what class do you think you'll fall into?
I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!