Why Debt Doesn’t Define You

July 18, 2011 · 10 comments

Got a guest post for you today. Hope you enjoy it :) Girl Ninja will be out with her friends tonight, so I plan to knock out a few articles  for the rest of the week. I miss you guys, in a totally creepy/stalker way.

Whenever I’m looking for a pick-me-up or some inspiration, I like to turn to anarchistic nihilist Tyler Durden.

What? I do!

Never have truer words been spoken than Tyler’s musings on money, prosperity and lifestyle in the novel (and movie) Fight Club.

Tyler says: “You’re not your job. You’re not how much money you have in the bank. You’re not the car you drive. You’re not the contents of your wallet.”

Inspiring stuff, right? No? I’m sorry, please don’t cry, I was only trying to motivate you.

What I’m trying to illustrate, via the work of novelist Chuck Phalanuick, is that money and debt do not define you as a person, and are not a reflection of your worth or potential, and here’s why.

We’ve all either heard of or used the Voice over Internet Phone (VoIP) giant Skype, right? It’s the thing all the cool kids use to chat online – think MSN messenger on steroids.

Well, did you know that Microsoft bought Skype last month for $8.5 billion? You might have read about that online, but did you also read that Microsoft was taking on Skype’s reported $686 million debt in the deal?

We can leave the politics of why MS decided to pay so much for the company up to the social media pundits and economists, but it’s interesting to note that so much potential can be seen in the company that it would be bought for such a huge amount despite its debt.

See where I’m going with this?

Okay, so this is a company, and I’m sure there MS is getting a lot for their money, but the overall point I’m making, if I’m making any point at all, is that debt does not, or should not, define you.

What matters, it seems, is your potential. What you have been is irrelevant, what you could be is key.

Of course Ninja already knows this, and not only refuses to let debt define him but treats debt with abject hostility as he launches a furious Dragon Punch into its sickly face.

As Ninja recently mused, looking at what has happened in the past isn’t necessarily a good way of predicting what might come in the future. Why am I mentioning that post? Well, simply put, just because you have been a debtor in the past, you shouldn’t then define yourself as a debtor for the future.

Anyone who either; has a web connection or has spent any time in an educational institution beyond the age of 16 will likely have heard of the psychological idea of the ‘self-fulfilling prophecy’. Its premise is that the belief of a perceived truth about your behaviour will directly perpetuate that behaviour.

Apologies for the psychology 101 – in a nutshell, if you believe yourself to be a naughty boy, you’ll live up to that persona with bad behaviour.

So, if you consider yourself to be a debtor because you’ve struggled with credit cards loans in the past?

Well, you get the point, right?

{ 9 comments }

1 Diana

Love this article! A+ and so so true!

Thanks for insight!

2 Momninja

Great POST!!!

Anyone that can work Fight Club into a PF blog is a superstar!

3 StackingCash

I feel this gives too many people a weak justification to have debt. I don’t like this rationalization.

4 Tom

Does debt define a person? No.
Would I marry a woman with credit card debt? No.
Why? Because I don’t know what your potential is. All I know is that you have unnecessary debt. Student loans? Sure, if they are reasonable for your profession. Car loan? Same reasonableness test. Mortgage? Same.
But 99% of the time credit card debt is a big red flag! Also, if I marry and find out afterward that debt has been hidden, annulment!

5 First Gen American

I like this guest post…but no mention of who the guest is?

I think the point that is missing from this article is that although debt can be bad, if it’s taken on with an end goal in mind of greater wealth creation, then it is a means to an end.

Yes, I got into debt to get my degree….but it enabled me to get job opportunities and a salary that I would have never been able to achieve without that degree. Yeah, Skype was in debt, but it needed that money to achieve it’s vision. Like going into debt to major in basket tweaving, there are also plenty of other startups who spent money recklessly without achieving anything.

Going into debt is a calculated risk. You shouldn’t do it unless you think you have a good chance of getting a return on your investment or be able to live with the losses. Although debt doesn’t define you, the type of debt you have does. If you charged up your credit cards buying crap, then there’s pretty much a 0% chance you’ll get a return on your investment. To me, that does tell me quite a bit about your character.

6 Julie

I like the part about you are your worth being tied to your potential. Great example too… Microsoft bought skype for its *potential,* which is what ultimately defined skype’s worth–in dollars–to microsoft. In the same way, our worth is is not our *net worth* but our potential worth. Very inspiring post!

7 Rafiki

Nice post. Is the author a blogger themselves?

8 Trip | Where The Cash Flows

I think this is a good post on on realizing that no matter what happens in life, you can always turn things around. While each chance that you blow might make future “success” harder, we are never without hope. Lately I have been reflecting on my life to this point (I’m 30 years old… so not too difficult to remember the whole thing ;) and I have come to realize that I have made some pretty bad decisions (which at the time I was too proud/ naive to recognize). But you know what? At least I have recognized them and more importantly I have learned from them, improving my potential to do better next time. And as the author states, it is my future potential that matters most.

Read more about my 5 Biggest Money Regrets on My Blog about entrepreneurial personal finance @WhereTheCashFlows.com

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