Historical perspective on money and personal debt

Hey John, ( and anybody else who cares to listen) 🙂

This picture caught my eye the other day and I wanted you to  see it.

I wanted to plant a financial seed in your minds eye if I may. 🙂

It is the home of Dr Lebron Lackey, still standing after a 250 mph hurricane.  Notice his neighbors…


When I was studying early Iowa history one of the things that struck me, (and we never covered in school), was the number of other recessions and depressions that had taken place.

All I had ever learned about was The Great Depression of 1929.  

We never talked about the Panic of 1837, that lasted until 1843 – (6 years).

“The Panic of 1837 was one of the longest and deepest depressions of the 19th century. It was a period of pronounced deflation and massive default on debt.”

Then came the the Panic of 1857  that  didn’t really turn around until after  the Civil War – (7 years).

“…the years immediately preceding the Panic of 1857 were prosperous, many banks, merchants, and farmers had seized the opportunity to take risks with their investments and as soon as market prices began to fall, they quickly began to experience….. financial panic”.

Or The panic of 1873 that lasted until 1879   (6 years).

Since you didn’t bring this topic up, I am kind of reluctant to get too preachy,  but knowing what I know,  it would be just wrong of me to not say something.

Back in  January of 2014, I was  at my wit’s end (financially).  To use a word picture at the time,  I felt like I was flying a 747 and we were about 10 to 15 feet above the ocean.

Yes we were still in the air, and yes we were still moving, but the waves were lapping at the wings, and I was tired.   Being self employed, my income can vary a lot from year to year…as much as a 1/3.   I  sat down, crunched some numbers and realized we had been spending $700 a month more than I was making for a couple of years.  Our budget was based on the incomes of better years. Those extra expenses were going  fun things like heating bills, medical bills and medical insurance.

We’ve never been big on going out to eat, yada, yada….

So there you go, and it was right in the midst of that craziness that I came across the book by Mary Hunt called  Debt Proof Living.

Within a month of reading it, I had hope.  Finally had some practical ideas on how to get some distance between myself and the water.

Our income hasn’t change all that much, but (knock on wood) we’ve been able to pay off all of the credit card debt, our car loan, a line of credit loan, and the loan to build that little extension on my shop.  Over $30,000 worth of debt, on the same income…we switched medical health insurance coverage that saved us $400 a month, and replaced the 20 year old furnace/ shut off the heat to the 2nd floor of our home and whacked another $300 a month off expenses.


So when I see that picture of the house still standing when the neighbors have all been blown away, I see someone making different financial decisions than the rest of the culture.

Pop culture says, debt is just a normal part of life.

I say we are living in a fools paradise.

Historically, things go in cycles.

We are way past due for another financial $@#% storm.

Get out of debt and stay out of debt.

It is possible to raise a family on one blue collar income.

You can take that to the bank.

14 thoughts on “Historical perspective on money and personal debt

  1. Can I just say, Heeeecccck Yes! Good work. Great job. Love these stories of people waking up to the “fool’s paradise” and getting themselves out of it.
    (hey DM!)
    Boy those are words to live by. I have no big story of finding ourselves deep in a hole, or 10 ft from being underwater, but probably only because I watched my mom live it in my middle to late childhood. She also bought my brother and I Dave Ramsey’s Financial Peace course. That taught me a lot of the nuts and bolts of staying out of debt. The furthest we ever have been in debt is a 205k house loan, and a 5k car loan (not at the same time). We made some money selling the house (money is made at the buy, baby!) and rolled that into materials to build my current house. Together with cash flowing materials as we went, I OWN MY HOUSE. I do have a small loan for the land only (house isn’t collateral) which will be paid in a year and a half.
    I am where I am because of hard work, teamwork with my wife, the lessons taught by my mom, and a little luck. I am proud.
    (am I too preachy? Hope not. No intention to offend. I’m excited and not scared of financial discussions.)

    Liked by 1 person

  2. I watch people buying groceries with their credit card and try to convince myself they’re doing it to collect air miles…. Debt. It’s a miserable place to be. I recall when you were in that predicament – much kudos for staying the course and giving yourself some breathing room, most people don’t have that kind of self discipline.

    Liked by 1 person

    • And yet, the “growth” that govt is so big on seems to be predicated on encouraging people to take out mortgages on houses they can’t afford, indebting themselves to the bank and encouraging people to buy things they don’t need with money they don’t have. The restrictions placed on banks precisely to protect against excesses in this regard that caused the financial crisis of 2008, protecting people from themselves, are all being dismantled. Growth, growth, growth … to whose benefit? It’s really debt, debt, debt and profit, profit, profit.

      Liked by 2 people

  3. Hi Doug.
    Good post.
    When Hubby and I met, I was up to my ears in debt and holding down 2 jobs. Not all my fault, broken relationship yada, yada, yada, but at least I had a house to sell (or share to be bought out, which he didn’t) even if it did take my useless solicitor 2 years to get a court order to make him sell.
    Anyway, long story short, Hubby and I have no debt at all, not even a credit card (we have a card but don’t use it, and if we do, it’s paid off in full immediately) and haven’t had for 18 years. We paid off our mortgage with my redundancy pay and cashed in an endowment policy leaving us with just £200 in the bank, but it was the best thing we ever did.
    If we can’t afford it, we wait until we can, or budget accordingly before going shopping.
    I’m sick of people bleating they can’t manage on £125k per annum plus spouse salary and have to only have the three holidays abroad a year. That kind of income would see us OK for about ten years. I was brought up to cut my cloth to suit my purse. We don”t have a lot, but what we have is ours and paid for. We take a pride in that as you know, so fully understood your position in 2014.
    (Hope I haven’t come across as preachy)

    Liked by 2 people

  4. Nope, nothing owed to anyone BUT we’ve just been shafted by our gov.
    The next 3 years (until I reach old age pensioner status) is going to make belt tightening look like a tourniquet.


    • What is “old age pensioner status” in the UK? Here, I can start collecting when I’m 63..not planning to until @ least 67. by then they will probably move the marker down the field until 70.

      Liked by 1 person

      • You’re eligible for the basic State Pension if you were born before:
        6 April 1951 if you’re a man
        6 April 1953 if you’re a woman

        Thereafter things get complicated.

        Born On or before 5 April 1970
        We get ours at 66.

        Between 6 April 1970 and 5 April 1978 Your State Pension age is currently 67.
        It would increase to between 67 years and 1 month, and 68 years, depending on your date of birth

        After 6 April 1978 Your State Pension age remains 68

        How much you get depends on how many years you’ve worked and paid national insurance. You need to have paid the government 35 years worth of national insurance by retirement.

        Both of us started working proper at age 16. A few years ago they wiped off 2 years worth of national insurance by ONLY starting the count from age 18. Thus both of us will be receiving a reduced pension.

        Cheated again. Not that we’re in the slightest way upset by that you understand.


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