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In debt? You're a time traveler

If you're spending irresponsibly with credit cards, you're basically taking money from your future self.

By MSN Money Partner Jan 14, 2013 11:51AM

This post comes from Len Penzo at partner blog Len Penzo dot Com.


Len Penzo dot Com logoI have a voracious appetite for time-travel stories. I absolutely love them.


Image: Worried Man (© Corbis)One of my all-time favorite television shows, "The Twilight Zone," devoted at least five fantastic episodes to the subject. I wish Rod Serling had written more of them.


Recently the Honeybee and I rented "Looper," a recently released time-travel flick starring Bruce Willis and Joseph Gordon-Levitt. It was a really terrific movie -- and if you don't believe me, check out Rotten Tomatoes, where "Looper" has a stellar 94% approval rating on the Tomatometer


In the movie, time travel was possible, but it was illegal and available only on the black market. The mob discovered that it could use time travel to eliminate rivals without a trace by sending them 30 years into the past, where they would immediately be terminated by a hired hit man -- known as a "looper" -- who was paid in silver bars for his effort. But here's the catch: As part of the bargain, those handsomely paid hit men eventually had to "close the loop" by terminating their future selves.


I know. The premise makes my head hurt, too, but it's an undeniably delicious story line.


I bet many of you are walking around right now unwittingly living the life of a modern-day financial looper, enjoying the high life today off earnings from your future self -- and in the process setting yourself up for some very unsavory consequences down the road.


After all, every time you borrow money, you're hijacking your future earnings for something you want today.


True, debt isn't always a four-letter word. There are times when a case can be made for borrowing money, especially when you use a loan to buy something that has the potential to increase in value. For example, going into debt often makes perfect sense when you're looking to buy a home, or trying to start a business or expand an existing one. It can also make sense if you want to go to college -- assuming you're planning on earning a degree that's in high demand.

Unfortunately, most people who find themselves up to their eyeballs in a sea of red ink got there through the irresponsible use of credit cards, buying baubles and other disposable goods destined to become obsolete or consumed before they're paid off.


And therein lies the rub.


Taking on excessive debt -- and continually spending more than you earn -- greatly reduces the wealth you can accumulate down the road. As a result, your options in the future become greatly diminished because you're essentially spending tomorrow's wages today.


In short, accruing excessive debt severely limits your choices in life as you get older, making you an indentured servant to your lenders.


On the other hand, those who stay away from excessive debt not only maintain more control over their lives as they get older, they also avoid the chains that can prevent them from ever attaining financial freedom.


Face it, folks. You wouldn't steal from your neighbor. And you'd certainly never think of holding up a local merchant. So why would you ever capriciously rob the wealth from your future self?


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