Financial Panic Destroys Wealth: Myth vs Reality

Introduction: Don’t Believe Everything You Think

Steve Rhode: I want to share some truths about financial fear and anxiety in this episode. But first, I want to share this saying which applies to dealing with money problems: Don’t believe everything you think.

That’s an exceptional concept to remember regarding money, credit, and debt issues. Dealing with money worries amplifies your emotional brain and leads you to make poorly thought out decisions based on what you believe rather than what you need to know.

Ron’s Story: How Fear Cost Him a Million Dollars

Ron woke in the middle of the night for the last week. His money worries infected his dreams and would not let him rest. Like most people, Ron sought the first best-sounding solution to his problems based on what he believed he should do from what television personal finance celebrities said.

But what if what Ron believed was not accurate or factual information? Because of what he believed to be accurate, he fell in with a debt relief company that told him conventional beliefs, half-truths, and omitted key facts. That resulted in years of financial struggle causing Ron to lose out on more than a million dollars in retirement savings he could have had.

The Three Fears That Grip Us

Fear #1: What will other people think?

If you live your life based on the fear of what other people think, you allow them to run your life. Would you rather be afraid of what Janet or Jim will think about you if you don’t eat beans and rice for years? Or are you ready to learn, take action, and retire rich while their beliefs lead them to retire poor?

Fear #2: Fear of change

We run towards doing something that makes us feel less anxious as fast as possible rather than taking action that resolves the problem most effectively. This fear draws us into false promises given by some who claim there are magical solutions. But change is necessary to grow, overcome challenges, feel pride, and move forward to a better life.

Fear #3: Fear of the unknown

Because we seek shelter in what we believe others think and what we can apply the fastest, we don’t take the time to contemplate our reality, be reflective about what is best, or seek guidance from those that can inform and educate.

The Antidote to Fear

Knowledge, guidance, acceptance, and purposeful execution are the better enemies of fear and anxiety. I don’t want you to follow what I or anyone else says as gospel. Instead, please think for yourself. I encourage you to begin your research and fact gathering to make the most rational and logical choices.

“It’s better to trust and verify any advice you get than set your life down a path based on a lie or a sales pitch from someone that just wants to sell you some magical debt relief solution that makes them richer and you poorer.”

I-Series Savings Bonds: A Real Opportunity

The United States Treasury Department offers I-Series savings bonds paying a guaranteed 9.62% rate of return as of this podcast. Over the years, people have received as much as 13.18%.

Here’s the math: You save $10,000 a year in I-Series bonds. If they continue to pay around 10%, after 30 years, you would have invested $300,000 and it would be worth about $1.7 million.

For more information, go to treasurydirect.gov and search for I-Series savings bonds.

Two Men, Two Very Different Reactions

One man contacted me owing over a million dollars in unsecured debt. He was pretty cavalier about the whole situation – he viewed his predicament as a math problem and sought professional assistance.

Another person owed $3,000. Before we could sit down, this big burly man collapsed in my arms and started to sob. He said through his tears, “I’m so ashamed about my debt situation.”

The amount of debt is never important. That is just a number. How it affects your life, your mental health, your self-esteem, and relationships is essential.

A Tragic Warning

The worst debt situation I’ve ever seen was a man afraid of what his family would say. He was defiant that bankruptcy was not an option. He didn’t want to be thought of as a loser.

A month later he tried to gamble his way out of debt. He lost. The man returned home so ashamed that he shot his wife and daughters. He then killed himself to avoid the shame of his debt.

He could have been out of debt in about 90 days for less than $1,500 in legal fees but decided that murder and suicide was a better way to deal with his debt. What a tragedy. What a shame. What a loss.

Final Message

Debt problems combine simple math and complicated emotions. There is professional help out here. You do not need to feel alone, ashamed or afraid.