Part 2: Financial freedom
The rich rules over the poor, and the borrower is servant to the lender. (Proverbs 22:7 NKJV)
Poverty and indebtedness robs a person of true freedom. You can be free legislatively, you can even be free spiritually, but if you are poor and in debt you still won't have total freedom. You will still be subject to the creditor, you will still be a servant or slave to the lender. Even though slavery has been long abolished, if you are in debt you are still in bondage.Therefore, you have to undertake a journey towards freedom, financial freedom. You have to break the bondage that poverty bring upon you.
Financial freedom is owing no man nothing; that is where it starts. It is achieved by having more than enough resources, to an extent that work becomes a pleasure not a necessity. The goal is to redeem your time, and do that as soon as possible.
The idea is not only to trade your skills and time to obtain money. You have to build up sufficient resources to redeem your time. Therefore your resources should be sufficient enough to cover your expenses for as long as possible. Some people achieve this when they are sixty, some people achieve this much earlier. In either situation, this can only be achieved when you are debt free. Therefore the key is to build on a life of no debt. It becomes important therefore to achieve a surplus in your budget in order to start building up sufficient resources to free your time.
Psalm 37 v 21 says, “The wicked borrows and does not repay, But the righteous shows mercy and gives.” The wicked is obviously in lack or living beyond his capacity to cover the deficit with borrowings. But the standard we should strive for and attain is that of the righteous who gives. Is is difficult to give when you don't have anything. But if you have a surplus, giving becomes a joy not a struggle.
Reverse the roles
I think it is time to have reversal of roles. Let the poor achieve riches, and let the borrower be the lender. This will require a change in attitude and habits. The poor must unlearn his ways and replace them with the ways of the rich. Instead of being a consumer only, he has to be a producer also. Instead of being a borrower paying interest, he can be an investor earning dividends. The choice is yours. The poor can change his ways by being a bank instead of being bankrupt. By putting money in worthwhile companies, instead of always borrowing.
The main cause of being in debt is because of leaving beyond our means. For example, a person earns R 10 000 but have expenses that totals R12 000. The difference of R2000 has to be financed through debt. The antidote, is then to leave below our means, creating a surplus for saving and investing. In this regard, the goal for investing would be to build capital to earn big enough dividends and/or interest to cover your expenses. Or to invest in ventures that will achieve that. This kind of income is called passive income. It is income from investments, not from your direct job or business. It is an important income to achieve because it frees your time.
Financial freedom is achieved when you reach a stage when you don't have to work for money, reaching a stage when your passive income has equalled or surpassed your active income.
Consequences of poverty and indebtedness
The yoke and bondage of poverty will rob you of absolute control over their time and destiny. You will be challenged and limited by a lack of resources to take full advantage of opportunities that avail themselves.The poor is not free because he can not finance his ambitions, no matter how noble they are.
The borrower on the other hand, is actually working for his creditors, and not for his employer. More especially if the borrowing is to fund consumption and not means of production. When borrowing is to fund luxury and entertainment, then the borrower is actually working for his lender. He is trading his skills to pay his creditors. When you are in debt you are actually working for others, when you invest, you are working for yourself.
The rich rule over the poor because they offer and provide capital. There is a saying which goes like this, " he who pays the piper chooses the tune". The rich thus rule through their ability to pay. The poor can only offer time and skills. The rich use capital to control and bargain, while the poor can only offer their service. The poor earns a salary, while the rich earns dividends. The poor work for a company, while the rich owns companies. Therefore strive to own a company, not to work for one. The end goal of working is to stop working and to own companies. Do not celebrate the fact that you have a job, celebrate the fact that you own substantial shares in companies.
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