Review - Book Report/Review Example

I always considered credit card and other debts as important sources of finance however; the have suggested that I may be wrong in assuming that. Authors suggest that paying off our debts can be the best strategy to invest into future and can offer the required level of freedom and choice one desires to have over the finances and other parts of life. Authors suggest that debt was not the part of routine American life just few years back and it was only during 1970s that rules changed and debt started to become a dominating part of normal routine American life.

The surge of the personal debt during last 25 years is what made it relatively difficult for the people to actually have that freedom they desire for. Apart from this, authors suggest that it was a clever marketing by the banks and financial institutions which actually created the need for credit cards and personal debts for the middle class families which earlier were not having credit cards.The feel good persona around credit cards and the clever marketing tricks used by the marketers to sell the credit cards and other debt products make them relatively dangerous for the people who lack self-control.

I remember myself when I signed-up for the credit card and it was just out of the lack of self-control that I signed up and kept on spending against it to find myself in debt at the end. Use of innovative marketing is what makes debt profitable for the banks to sell to the middle class of America.Authors suggest that debt is what you pay for your yesterday’s spending however, it controls your future. For me this is clearly a case as now living with my family, I can see my disposable income shrinking because I have to pay a significant part of my income towards the payment of my credit cards.

Not only debt steels from the future of an individual but the cost of it is relatively too high. Debt is expensive according to authors and in the presence of high interest rates on debts such as credit cards; it becomes enormously expensive for the individuals to actually pay-off their debts once they fail to make full payments. I remember some of my friends paying 36% per annum on the balances they were carrying over from their credit cards indicating the extent to which high cost of credit card borrowing can aggravate the overall debt situation.

Authors outline a plan to tackle with the debt and how to put in place a systematic plan which can help not only reduce the debt but also reduce the cost incurred on such debts. Creating a personal repayment plan as well as channeling the savings are few of the steps suggested by the authors to deal with the debt issues. What is also however, critical to note that the authors suggest not to borrow against the home and to stay away from taking home equity loans.