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It’s Not My Default


It’s Not My Default

By: Steve Sadler, CEO

February 08, 2016

Perhaps you are like many Americans looking at your personal financial situation and seeing an oversized debt obligation and a garage full of products you no longer use. Perhaps you live in a house that’s more elegant than you need, that’s bigger and has more space than you actually use. Or maybe you’re driving a car that impresses no one.

Perhaps you’re driving a car that you paid too much for in an attempt to impress someone you don’t even know. While there is some good news, you are far from alone. There are literally millions of Americans that are looking in the rearview mirror, seeing decisions in a whole different light and wishing they could undo much of what was done in the past five years. Strangely enough, the car gets older but the debt stays around.

I have been thinking for quite some time that the whole game is rigged. It’s much like those carnival games where the ring toss ring is barely big enough to fit over the neck of the bottle, or where the milk bottle you’re supposed to knock down is heavily weighted and the ball you throw lighter than normal.

Do you ever get that feeling? It seems like these “heavily regulated” banks and financial institutions are dealt a better hand than the average American citizen. The regulations are written by lawyers, passed by Congress — mostly full of lawyers — interpreted by lawyers, enforced by judges who are also lawyers and all the rest of us are not lawyers.

Funny how there’s always some wiggle room and some mealy-mouthed language that allows the bank, or the lender, or the brokerage firm, or whomever it is, to get out of their obligations while leaving us holding the bag. This process has been continuing for many years and for a while the bag they left us holding was relatively small, a modest burden that we were able to bear.

Left holding the bag

That is no longer the case. The bag we hold collectively and individually is now a serious burden. These debts — these burdens — threaten our future, threaten our security, threaten our way of life and, of course, assuredly they threaten our children.

Things have been looking up lately though, haven’t they? Until very recently, it seems the news is always talking about the stock market going up, new opportunities on the horizon, a fresh start just ahead.

But is that really true when you dig a little deeper? If you look at the underlying numbers, the ones that matter most to everyday guys, what you find is unemployment remains high, wage stagnation has created not just a lost decade but a lost generation and future prosperity is very much in question.

And so now might be the right time to consider taking radical action. If the economy is not growing, if your future is not bright, if your income is likely to remain stagnant, or heaven forbid even go down, then what? What should you do in this situation? What should you do if your future is not bright?

Don’t get suckered

The answer is now is the time to act. The game is a scam and you are the sucker! Everybody wins and you pay the freight. Your taxes go up, your debt burden goes up and all around you people, or more accurately corporations, are being relieved of their debt burdens.

General Motors gets $70 billion and AIG gets $100 billion. There’s no need for those organizations to stand and honor their obligations, but do you get the same treatment? I don’t think so. See what happens when you fail to pay that $1.3 trillion in student loans.

We are in for another decade, or perhaps two, of a generation or two of economic trials and tribulations. We are in an era where our growth is not assured, where our prosperity is not guaranteed. In such an era, it is essential that each of us create a plan and prepare for a darker future than we might have hoped.

My suggestion is that you think the unthinkable. Get out of the box they built for you and put you in. You need to create a plan to reset your life on your own terms and that may mean walking away for certain obligations. I would argue that many people were fraudulently induced in the first place. Any attorney can tell you that fraud in the inducement means you are not really obligated after all. And guess what, your very own government agrees…that is why they are forgiving hundreds of millions in student loans as we speak.

Two sets of rules

Lie upon lie has built a false image of how America works. The false image begins with a few old adages like go to college and you get a good job because college graduates earn more. Maybe you bought into that lie and took on a huge debt burden only to find out that these jobs were not at all plentiful and not what they were cracked up to be.

Maybe you believed that if you worked hard and played by the rules you could carve out security, prosperity and opportunity, yet you discover now that that’s not the case. You discover that there are at least two sets of rules. There’s a rule for those guys who are the ones with political clout, or with influence and the one with friends in the right places, and then there are the rules for the rest of us.

There are the rules for GM, or Citibank, or Goldman Sachs, or Fannie Mae, which allow them to default on their obligations, take billions of dollars from the Federal Reserve or the Treasury Department, shift the blame, restructure themselves, stiff their vendors, shaft their bondholders, who are mostly pension funds — that means your retirement fund — and then there are the rules for guys like us.

Pay your debts, honor your obligations, go to work, take two jobs to care for your children, educate them in a public school, do this, do that, go here, go there, be the dutiful one. It’s time to re-examine the precepts and preconceived notions that we have been led to believe.

Now is the time to default

If the next decade or two is going to be tough with declining incomes and diminished resources, I suggest to you that now may be the time to default. Direct all of your cash flow into a place where you can control it, whether that’s starting a new business or hoarding gold and silver. You need to have more control.

Are you well protected now? Do you have six months of cash in reserve? If not, you might want to think about how to make that happen in the next 12 months.

If the outlook is a little bit gloomy, that’s because I predict the next ten years will not be all roses and sunshine. There will be some tough times ahead and you need to get busy.

Are you to blame? Darn right you are. You’re no innocent victim, you bought in even though you suspected it was too good to be true. Even though you knew that everything does not always go up. Now that you know its a lie, you have no excuse not to fix the problem. You must fix the problem, you must find a way to address the issues in your own life and you must take responsibility. You must find a way to rebuild a solid financial and moral foundation for yourself and your family.

It is time to restructure Joe Sixpack Inc. and to do that we’ll follow the model that has been used by the United States government in the restructuring of AIG or General Motors.

The good news is that restructuring Joe Sixpack Inc. will not cost you billions of dollars, but it will mean that you change your lifestyle. No more debt, no more borrowing, no more consumption to ease your pain.

Don’t do as they say….do as they do!

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