Being Debt Averse is a Good Thing

If we've consulted together, or if you read my blogs, you can see that I am pretty darn debt averse...probably to the extreme.  Yes, this is a bit of a quirk, but if you can constructively use your quirks, they can pay off greatly.

A confession:  My no-debt philosophy does not come from strength.  It comes from my personal weakness.  I am simply not comfortable having debt.  It makes me nervous.  Ridiculously nervous.  Our company borrowed money one time.  In 1993, we borrowed $7000 from Wells Fargo to buy a cutter-plotter.  It was an 18-month loan that cost us about $400 per month.  Not a big deal, but it drove me absolutely nuts.  When we finally paid it off, you would have thought I just avoided being executed. 

I realize that's extreme, but I just can't seem to help it.  

Another confession:  Intellectually, I see that debt is sometimes a necessary tool for business.  I can theoretically analyze the benefits and drawbacks of a certain debt load.  I'm not going to try to convert everyone to a debt-phobic extremist like myself.

However... I would like to encourage you to lean toward the debt-averse side of life. Just a little.  It doesn't have to be extreme.  It is a lot more peaceful over here.

If you want to lean toward the debt-averse side, here are a couple of analogies to stick into your brain.  When you think about debt, think of these:

1.  Debt is like wearing an itchy sweater.  No matter what you do, you’re never going to quite be comfortable wearing it.  Yes, it might be cold outside and you may need to wear that sweater, but it still itches and is uncomfortable.  Wear it as long as you must, but take that sucker off as soon as you can.

2.  Living in debt is like swimming in the lake with your nose barely above the water line.  You get along fine when the lake is calm and all is well.  But when the waters get rough (like a recession), or the swimmer makes a mistake (like an unexpected customer loss), suddenly you are facing desperation.  If you have savings and no debt, your nose is way above the water line.  You can withstand the mistakes and bad news that are bound to happen occasionally.

By the way, this philosophy about debt works equally well in personal living. 

I've seen far too many businesses with debt loads that demanded a lot of attention from the business owner.  Worrying about making payments and what to do with the existing cash stole creativity and problem-solving from other parts of the business.  That stealing of time and creativity is an invisible but very real cost.  I don't want that to happen to any of you.  Your brain is needed for greater success.