In his column “When rational is revolutionary”, Gil Smart concludes:
“It’s tough to live completely debt-free; we do have a mortgage. And paying off debt means sacrificing consumption now. On the other hand — ever paid cash for a vehicle? No monthly payments, no finance charges. That’s freedom. And if that’s not possible now, you might try and engineer a future where it is.”
WATCHDOG: Agreed that borrowing for sheer consumption in most cases is unwise. But, as Smart implies, conservative borrowing to acquire long term assets such as a house or for a business is both prudent and essential for the individual and for the successful operation of the free enterprise system.
Also, for those just starting out, borrowing is sometimes unavoidable. The Watchdog well remembers the suits who bought ’off the cuff’ without a shred of credit history (Thank you Brooks Bros.) and the used Mercedes sedan which he financed over four years…all essential for his career in commercial real estate sales. But under the circumstance, they were investments.