Debt is a burden on humanity. An individual creates debt on a daily basis during their entire lifetime as a result of striving for and pursuing their personal consumption wants, needs, and desires. RLCD is created twenty-four hours per day, every single year of a person’s life. Debt is related to money, finance, income, banking, hourly wages, economics, the consumption problem, consumer credit, capitalism, consumer behavior and much more.
RLCD has affected mankind and modern society since the dawn of time. The magnitude of this global problem and the difficulties each individual faces associated with their efforts to meet their consumption needs is fundamentally due to pure economics. Not in the sense of scarcity, but rather in the sense of not having had a market exchange where the individual consumer can participate as both the buyer and the seller of the consumer debt that they themselves create over their lifetime.
How to overcome Recyclable Lifetime Consumer Debt (RLCD)
When you procure any loan it’s not that you are going to create a wealth instead you are creating debt for yourself. Certain loans will never end as we keep taking new loans or going for top up on the existing loans and typically end up paying for life time. The situation is like consumer debt is keep growing in a recyclable manner at the double rate of income or salary or wages
How to address recyclable lifetime consumer debt?
Today, the level of recyclable lifetime consumer debt is that it has become a global problem indeed problem of every individual. When an individual effort does not meet his consumption need then the possibility of recyclable lifetime debt is more and money is the better solution going forward
Recyclable Lifetime Consumer Debt Association (RLCDA) is an association which addresses all the issues related to recyclable lifetime consumer debts. It has come up with a new agenda where an individual with lifetime consumer debt will be given the opportunity to contribute both as a seller and buyer for the debt he/she created over lifetime.
The calculation is that for every unit of Death Benefit Proceeds (DBP) there will be an equivalent market exchange of RLCD. By making consumer both seller and buyer it is possible to find solution from different perspectives for a single problem. He can relate himself with money and relationship towards it
Limit money spending
If you want to control the money instead of money controlling you and making you a lifetime debt, first what you should do is learn how to limit your spending and have a check on your budget and expenses. For instance if you have taken a loan with more rate of interest then rethink about negotiating for less rate of interest without any processing fee and taxes from same or different financial institutions or banks.
Instead of going for credit always, find ways to use cash or check and get discounts. The interest amount you could save per month typically turn out to be your savings amount. Controlled spending is the best way to nullify your debts at the earliest possible.
Other way of limiting debts is earn more money and spend more. It sounds very easy but may not be possible for all sections of people unless you earn extra income from your part time job or any other source of income. Financial freedom is the real freedom that every individual wants to have in their life.
Huge Costs Associated With Debt
“I’ll gladly pay you Tuesday for a hamburger today”. Those are the famous words of the cartoon character, Wimpy, from the once popular cartoon, Popeye. When you take a closer look at Wimpy’s words, you will realize that his philosophy is curiously similar to the philosophy of many Americans who would gladly create debt today rather than pay for something today using available cash resources.
While debt does provide great convenience and the ability to delay the expenditure of cash, there are huge costs associated with debt. When you and I use a credit card to make a purchase or take out a loan from the bank, we must compensate them for allowing us to use their funds now. That cost usually comes in the form of interest payments and if not controlled, interest charges can make the future cost of an item, much greater than today’s cost.
Let’s look at an example of how debt is created and the cost of debt. Let’s say you see an item of furniture for $800 and you decide to use your credit card to make the purchase. The credit card company would loan you that $800 for a period of about 30 days during which interest is accumulated. If you pay off the $800 on or before the due date, you pay no interest. However, if you carry any balance, you must pay interest for every day that the balance is outstanding. The longer a balance remains outstanding, the more interest you have to pay. In this example, if you only paid the minimum payment of $40, you must pay interest on the outstanding $760 for every day that it is outstanding. Had you paid cash in the first place, your total cost would have been a maximum of $800.
The debt service available to pay for RLCD is based upon wages that a person earns usually working eight to twelve hours per day, most of their lives. In other words, it is mathematically impossible for you to pay off a debt that grows two to three times faster than the rate at which you can earn enough wages to pay off your debt. It doesn’t matter if you live to be seventy-two or one hundred years old, or if you make $5.00 per hour or $500 per hour.
Average lifespan of a person born in the USA = 80 years.
Total number of days in one lifespan = 365 days / year x 80 years = 29,200 days.
Total number of hours in average lifespan = 24 hours / day x 29,200 days = 700,800 hours.
How much RLCDebt do you personally create each day in order to meet and provide for your OWN individual personal consumption needs, wants, and desires? $1, $5, $10, $50, $100, $500 or more per day? If you lived to be eighty or a hundred years old, how much total RLCD will you have created over your entire lifetime? If you could buy all of the consumer debt you currently owe or will create during the next ten, twenty, or seventy years for pennies on the dollar today, would you and how would you do it?
Abraham Maslow’s Hierarchy of Needs Pyramid is well-known in the field of psychology, human behavior, and social sciences. His work is often depicted as a multilevel pyramid-shaped visual representation of factors that motivate and guide human behavior.
Initially, a person strives to meet and to fulfill their most basic physiological needs which are located at the bottom of the pyramid. After those needs have been satisfied, a person then recognises and turns their attention towards other higher levels of need, such as personal safety, love / belonging, and esteem. Finally, by achieving and realizing their fullest and highest level of need, the person is able to satisfy their self-actualization needs.
Consumption refers to the buying, savings, and spending habits of individual consumers as they engage in behaviors and decision-making directed towards their pursuit to meet and satisfy their basic needs, wants, and desires. Unfortunately, Maslow’s pyramid of need fails to show a person WHERE or HOW to get the financial means and the resources they must have in order to either buy or acquire the desired consumption needs they ultimately wish to satisfy.
The magnitude of this problem is obvious when a person realizes that they could easily generate tens, hundreds, thousands, or even millions of dollars in consumer debt over their entire lifetime. Is there a possible solution to this dilemma?
The exchange of one unit of RLCD is equal to one unit of Death Benefit Proceeds. An exchange value of $1.00 = one unit of RLCD is worth $1.00 = one unit of Death Benefit Proceeds.
If somehow the continuous cycle of consumer debt could be broken, then the major problem of multigenerational poverty and debt could perhaps be resolved. In contrast to the typical consumer debt cycle motivated by spending, we disrupt this never-ending cycle by having the consumer buy all of there own past and future debts.
Consumer Debt Cycle: Selling A False Dream
Many people who were born and raised in the USA were taught to believe that if they go to school and graduate, then they can get a job.
If they get a job, then they can one day get married.
If they get married, then one day they can have a family.
If they were willing to work hard all of their life and took care of their family… then one day they will be able to retire.
Many people also believed that if any of the following things were to occur, then this could help them get the resources that they need in order to achieve their life goals, dreams, and ambitions possibly sooner.
Work longer hours
Get a job promotion
Get a higher education => College degree or Masters Degree; MBA, JD, PhD, MD
Their spouse get a job Start their own business
They get a second job
Spouse get a second job
They take an overseas job assignment
They were often driven and motivated by the idea that if they could just get more money, then they could ……
Or, their family could ……then they could …….
But, underlying their motivations and desires there was always this one nagging question that demanded an answer. Each person had to ask themself, “What can I do to get more money and how or where can I get it?”
One person might try to obtain more credit cards, increase their credit limit, or get a bank loan. Another person may have tried to refinance their home or borrowed money from their family and friends. Still others may have tried their hand at investing in the stock market, bonds, commodities, and the futures markets.
Any and all of these these things may have been tried by different individuals depending on their risk aversion or their willingness to take risks and their expected ability to pay back the money they receive. Sometimes their decisions worked out and they were successful. However, for other individuals, the results led to near total complete financial disaster that affected them and their families.
Their belief system can be easily summarized by the following diagram (Figure 1) which is referred to as “The Typical Consumer Debt Cycle”.
The Philosophy Of Recyclable Lifetime Consumer Debt & Impact On Economy
With the mankind becoming more modern day by day, their needs and debts are also shaping up modern and growing at rapid rate. One such modern debt is recyclable lifetime consumer debt. As the name itself suggest it is for life time unless you find a way to get out of it at the earliest possible. Earn more or spend less to stay out of lifetime consumer debt or continuous poverty.
Impact on the economy
Recyclable lifetime consumer debt (RLCD) plays a very huge role in the day to day economy as it’s impossible to live without any debt for any individual. Its impact is such that an economy can go bankruptcy with in no time. It can create multiple effects on the economy. If you are borrowing money, you might spend it in the form of creating new jobs which means again spending is doubled so is debts.
Positive and Negative impact on economy
The impact RLCD creates on economy need not be negative always, it can be positive also. If an individuals’ lifetime consumer debt ratio is less than his earnings ratio then it will not create any negative impression as it turns out to be a neutral and keep the debt in control. With more middle and low level people earning lower than their debts the ultimate result will be negative on the social economy. An individual or a section of people can’t impact the economy on a positive note always.
Borrowing money has a role to play in deciding the interest rate of any financial institution. If your RLCD is more then you are paying variable rate of interest mostly at the higher side. Economy might find it difficult to come up with proper rate so that consumers can have smoother transactions
Gap between goods and services
When the rate of recyclable lifetime consumer debt increases, the purchase capacity of individual using money drastically reduces as he tends to buy with loan always. This results in creating a gap between goods and services especially in credit line. Instead of saving money he/she is spending more using loans which in turn increases individuals’ debt. After all you can’t purchase new home using credit card alone
Individual decision and perception
To get free of recyclable lifetime consumer debt, one needs to take proper decisions and judgments before opting for any new loan/debt. Having too many loans is not a good idea instead go for it only if you can afford or try to manage with the minimal income possible. This way it is always possible to mitigate the impact of RLCD on every individual and economy.
Consumer Debt Enslavement Is Alive And Well In America
The sad truth is that too many Americans have fallen victim to consumer debt enslavement. In fact, an Equifax report showed that US consumer debt stood at some US $12.44 trillion in December 2016, with some $8.96 trillion of that being mortgage debt.
In other words, we have racked up so much consumer debt that our hands and feet are shackled with an ever-increasing inability to pay for anything without creating more debt.
There was once a time when cash was considered king. Nowadays, it seems as if credit is king. Because the reality is that the system is structured in such a way that credit and debt are pushed and promoted while using cash to make payments is looked upon with either suspicion or derision. If you don’t have a credit card, you are either stupid or putting yourself at a clear financial disadvantage.
Think about it for just a moment. In order for a consumer to really “make it”, he/she must first establish a good credit history. This entails the creation of debt through credit card purchases for consumer items such as furniture and appliances, motor vehicles etc, or paying for services such as a university education with borrowed funds. In other words, debt has become a pre-requisite for achieving financial “freedom”. It’s ironic but consumer debt enslavement appears to be the path that many American consumers have chosen to take towards financial success.
It is virtually impossible to get a mortgage loan without having previously created some type of debt. That sets up a cycle of consumer debt enslavement where it’s debt or nothing. Once a consumer proves that they can manage a little debt, several other doors of opportunity fly open, an ongoing invitation to take on more and more debt. It is nothing but a trap and unfortunately, too many consumers fall for it.
The Impact Of Consumer Debt On State Economy
Very few people in this era are little acquainted with the term consumer debt. They are carrying it out but probably don’t know the definition actually. Consumer debt is kind of debt held by the individual like you and I and the thousand out there. Without some debt today it is nearly impossible to lead a normal modern life.
However, this individual issue has some greater effect on the national economy on a nation. In this article we will learn how consumer debt affect the whole national economy. So, let’s start-
Multiplier effect is the first one to hit the economy as an impact of consumer debt. Actually multiplier effect functions like, people brow money and spend which increase business revenue and creates more jobs which ultimately leads to more spending. That way it cause multiplier effect on the economy.
Interest rates always is a great factor to influence lending money which has its effect on the economy ultimately. To make the economy smoother, sometimes the state decide to reduce the interest rates. As a result, people become more prone to borrow money and spend more. Which makes the economy of that state smoother but at the same time it increase the debt of the consumer and has an ultimate effect on the whole economy.
Kind of debt
Depending on types of debts it can sometime have both good and bad effects on economy. Experts thinks that debt like purchasing using a credit card doesn’t have such good effect on economy if a consumer buy a home using the same card. In that case purchasing home has positive effect as it becomes an assets then.
When there a pretty gap between the demand of goods and services purchased by credit the consumer deleveraging occurs. In this case consumer be on to make purchase with loans instead of saving money for make the same purchase in next year. And the results comes to pay the debt all the time rounding up. Which results to ultimate consumer deleveraging.
Household debt ratio is another factor which has its impact on the whole state economy. Household debt ratio and their ability to keep them under control dictate the effect of consumer debt. For example, when a family has a high amount of debt and at the same time it has a high amount of income then it doesn’t have that negative impact on the economy. But on the contrary happens when people have low or average income and are gone to take a high amount of loan. Then the payment is missed, the houses are foreclosed and bankrupts are filed. This has some severe effect on the state economy. To get out of this specific situation, proper judgment before allowing the loans and at the same time individual consciousness not to have too much loans than they can afford and this sense can help.
So, these are the few negotiable impact of consumer debt on state economy. All the impacts can be mitigated. For that loan authority’s proper judgments and individual consciousness for sure can help well.
The Market Exchange And Recyclable Lifetime Consumer Debt
The consumer is the creator, seller and buyer of their own Recyclable Lifetime Consumer Debt (RLCD). The Consumer is named Insured on their own individual term life insurance policy.
The RLCD Association creates and oversees the RLCD exchange market which brings together consumers who want to monetize their term life insurance policy.
The RLCD Association is a named co-beneficiary on the term life insurance policy that the Consumer desires to monetize using the exchange market.
The RLCD Association operates and facilitates exchanging one unit of death benefit proceeds (DBP) for one unit of Recyclable Lifetime Consumer Debt (RLCD).
The RLCD Association establishes a fixed market exchange rate ($1.00 per unit of DBP = $1.00 unit of RLCD) that is beneficial to the Consumer.
The RLCD Association facilitates the creation, issuance, and selling of RLCD bonds for the benefit of the Consumer.
The RLCD Association facilitates the transfer of capital received from the selling of bonds to an account that’s been established by the Consumer.
The RLCD Association manages and oversees the initial funding and monetization (up to 48%) of the account established by the Consumer.
The RLCD Association maintains, audits, and monitors the account created by the Consumer.
The RLCD Association charges the Consumer a management fee and a transaction fee to support its administrative costs, operations, and the market exchange.
Its related concept, called “RLCDebt”, refers to the amount of consumer debt that an individual creates or produces in a single day.
If the average individual lives to be 72 years old before they die, then they will create and produce 26,280 days worth of consumer debt over their lifetime. Likewise, if an individual lives to be 100 years old before they die, then they will create and produce 36,500 days worth of consumer debt before they die.
But, how much RLCDebt does (and would) one individual create each day over their entire lifetime – $1 … $50 … $100 …. $250 … or in excess of $500 per day?
Consumer debt is created any time an individual buys or spends money for something using their debit card, credit card, or some type of financial repayment contract, such as a loan.
Some of the the basic essential consumption needs of the individual shown in Figure 2, are food, water, and shelter, etc – but, these items are by no means all inclusive.
In fact, there are at least 60 additional other important items which could reasonably be purchased by an individual during their lifetime that are not shown on this Figure.
Consumers have an awesome amount of power.
So, now each individual should ask themselves the following three basic questions:
How much consumer debt (RLCDebt) do I create each day and what is its value?
If I lived to be 100 years old, then how much is my total RLCD worth to me?
If I must create consumer debt in order to survive each day, then why would I ever want to enter into any financial contract with an institution like a bank, credit card issuer, or a mortgage finance company and give them the right to charge me both principal and interest for my debt – when I can buy it for myself and from myself for pennies on a dollar (Poa$D)?
These types of questions should cause an individual to stop, pause, and reexamine – for themselves, some those fundamental bedrock principles, beliefs, and values that they have always held to be true.
Because the answers and the response to these questions could fundamentally change our current system of capitalism and the powerful impact that individuals consumers can have on the American culture.