Page 73 - Benjamin Franklin\'s The Way to Wealth: A 52 brilliant ideas interpretation - PDFDrive.com
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32 DON’T GET BOGGED DOWN IN THE BAD
TIMES
Everyone knows the saying ‘fail to plan and you are planning to fail’ but when times
get tough it can be easy to forget to plan for better periods to come. Or, as Franklin
put it, ‘remember Job suffered, and was afterwards prosperous’.
DEFINING IDEA…
Debt is the slavery of the free.
~ PUBLILIUS SYRUS, ROMAN AUTHOR—JUST AS TRUE TODAY AS IN THE FIRST
CENTURY B.C.
You don’t actually have to endure a plague of boils to feel like the blues
have got you and there’s no way out. The realisation that you’re in debt,
that it’s rising and you have no visible way of paying it off will usually do
the trick. The good news is that there is always help on hand and there are
ways out. The bad news is that some short-term solutions can actually turn
out to be long-term nightmares that will seriously damage your future
success. In particular, beware of Individual Voluntary Arrangements (IVAs)
if you’re in the UK.
You’ve probably seen adverts for IVAs on the TV. They tend heavily
towards imagery of those drowning in debt or being locked in until
miraculously they are freed of all their constraints and their debts just go
away. In reality an IVA is a formal agreement between debtors and creditors
where debts are frozen. Instead the debtor pays off a fixed sum every
month for a fixed period (often five years). If the debtor honours that
commitment, the rest of the debt is written off after that point. Sounds
great, and IVAs were originally introduced as an alternative to the stigma of
bankruptcy. Anyone who owes at least £15,000 to three or more creditors
can arrange an IVA—but what is often forgotten is that an IVA is also a
financial product being offered by agencies who take a healthy profit and
thus have a vested interest in selling you that option.
IVAs are very attractive to those who feel swamped by debt because it
means instant protection from creditors who no longer contact you, it
