30 minutes of reflection. The perception of debt.

I was talking to my mum on the phone last weekend as we usually do on a Sunday night and at one point I spoke the words ‘debt perception’ in a valiant attempt to explain what I felt was a generational difference of opinion between baby boomers and generation x about the concept of occupying negative equity. Essentially, that part of the conversation was purely how I had a point of view on managing my own cash flow that she didn’t share due to the era she grew up in. Don’t get me wrong, it wasn’t a telling off. She’s fully onboard about the cut and thrust of a life lived working within the advertising industry.

Over the last week that conversation has had me thinking of the wider philosophies at play within a family trying to survive the shifting economic climates of capitalism over the last sixty years. A generation of Yorkshire women (and men) have clearly been influenced by a certain generalisation (or post war propaganda), through the media or by word of mouth which gave my mum the opinion that it was ‘right’ to live within your means and ‘wrong’ to live a life on the never-never. Outside of West Yorkshire, that’s a slang term for ‘borrowing other people’s money to live’. Growing up it was proud, northern language and a stance against recklessness that might ruin a post war UK economy but it ran much deeper than that. It was anti-risk at it’s heart, encouraging people to settle for what they had. And for an island nation, park the empire for a second, it helped propagate another aspect of the capitalist banking system, that an englishman’s mortgage is his castle. Don’t get me wrong, it is good common sense advice in any era or lifetime, especially now living through a 21st century austerity campaign.

My mum verbalised her shock and awe at the price of my house when I was getting a first time buyer mortgage in the south east of england in 2007. Mainly because in the early sixties when she married my dad they got a three bedroom house for around £2000. She gets the fact the UK economy had to do what it’s done to increase house prices today, she just cannot fathom the size of the debt that I have had to take on both mine and my wife’s shoulders. She says, ‘It would feel awful owing that much money and the thought of how on earth are we going to pay it all back.’

I was part of the first generation to be offered student loans, I saw first hand the dot com bubble then burst and of course the banking crisis. However, I’ve seen things on the internet that I would never have seen in a censored british broadcasting paradigm had I been born in the 1940's like both my dad and my mum. Of course I’ve watched my fair share of conspiracy theories on YouTube but I’ve also been exposed to other interesting stuff about the formation of both the Federal Reserve and the European Central Bank monetary systems and the manufacturing of money. Debt is not the same as deficit.

I was once told that some of the worst crimes are committed in the name of a mortgage. I suspect these crimes are somewhat related to debt perception. Some people have a quite different, almost cavalier approach, “It’s better to die in debt than it is to die in credit — you can’t take it with you.” Funny, yeah but if you don’t have any kids it sounds like a really selfish thing to do to the ‘state’ or whomever leant you the money in the first place. That has been a key theme of the recent election in Britain. That the previous Labour government had that cavalier attitude and now that ‘wrong’ behaviour is being put ‘right’ again by the Conservatives. Morally driven finance.

Entrepreneurs have a roller coaster existence creating start-ups but they are also running a money manufacturing exercise based upon a bright spark of inspiration which, if nurtured and kept alive long enough will build up into a big payoff for those involved much sooner than 25 years. To me, in that context, as long as you pay your rent on time it sounds a lot more fun than getting a mortgage, a job and in 25 years those bricks are yours, as long as the whole housing market doesn’t collapse during your lifetime. Then when you die, your wife and kids get the unlocked wealth that was created through a successful state of endurance and debt perception management. That’s of course if in the meantime, your chosen career doesn’t get disrupted by the internet and your job disappears before you reach the 25 year finish line. To me that prospect is more frightening than living on the never-never.

Stuart Wilson 30 minutes of reflection 21/6/15

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