Nathan is a personal finance expert and he spreads his knowledge through writing, speaking and coaching finance. He is an advocate for debt-free living which we can tell from this quote.

Let’s think about what a loan is. We get an amount of money that we can spend on something, just like that. We then have to pay back the money over a set period of time with some interest added on. It is very straightforward and simple and it is not a surprise that anyone passionate about personal finances is not a big fan of debts. However, it is not simply because debts are bad, it is because debts are bad on so many levels.

Starting with the obvious, it is expensive. When taking a loan you have to pay interest rate and administration fees, depending on the loan those extra costs can add up quite fast. When borrowing money it is a fact that it is money you will eventually save up in the future, otherwise you wouldn’t be able to pay it back. However, you want this money now and you are willing to pay extra to have the money now. You are in other words paying for your impatience.

The impatience leads us into the second problem with loans. If you are not willing to put in the time and work that it takes to save the money you need, it is an indicator that you don’t want it enough. You are not willing to put in actual effort and quiet frankly, it also means that you don’t deserve it.

Last but not least, as Nathan states, you rob your future self. Borrowing money that you don’t have today means that you are going to disable your future self from spending money you would’ve had if you didn’t have to pay back a loan.

It is very easy to avoid debt through reverse strategy. Don’t disable your future self from using money, disable your current self from buying unnecessary things in order to save for your future self. Build up your savings and you will always be able to “borrow” money from yourself with zero interest rate. I believe that this is one of the keys to achieve financial freedom, but that is something I will talk about another time.

Always remember that there are different types of loans, some can be strategic and necessary like student loans or a mortgage and these are big topics I won’t talk about today. Loans that you never need on the other hand are credit card loans. No matter how cool their bonus points are, stay away from them!