Editor's ChoiceCategories Credit Type Issuers Blog

Debt is Slavery


Debt Is Slavery” by Michael Mihalik is a short little read that is packed full of thought provoking concepts.

I wish that I could say I enjoyed reading it, but I didn’t. I really expected to like it. Especially since both Get Rich Slowly and The Simple Dollar gave it high marks. Unfortunately, I got aggravated halfway through and was barely able to finish it (it’s only 122 pages!).

So let’s give a quick rundown of what’s good, and what I believe went horribly, horribly wrong.

The good:

Debt is slavery. It’s an excellent concept. I love it in fact. If we could all think about this a little more before carrying a balance on a credit card, or signing a loan on a car we can’t afford, well, maybe it would help us.

Time is Not Money, But Money Is Time – I loved this concept too. Mihalik spends the better part of a chapter encouraging us to think of our purchases in relation to how many hours we will have to work to pay for them. (Or how much of our life we will have to give up to have that item.) For example, If I make $10 an hour, then I will have to work 8 hours, a full work-day, for an $80 item. And that is not even factoring in taxes.

Understanding that I am trading in a portion of my life just to have a designer purse, well, it makes that purse look a little less attractive to me. I’m at least going to try to get it on sale 🙂

The GMM is out to take your money – the GMM being the Giant Marketing Machine. You know the GMM I’ll bet. Anyone with access to a TV, computer, or radio does.

It’s the overall noise that is the background for our lives. Commercials that are constantly telling us to ” this” “Obey our thirst/emotions/impulses” The ones that are continually and constantly drowning out our powers of reason. Ads like this one are definitely the GMM at work:

Mihalik does a credible job of trying to snap us to our senses by pointing out that we don’t really need all that stuff, and that we are probably better off putting it back into circulation or just giving it away.

Ok, so that’s the good part. Let’s take a look at the not-so-good parts.

The Bad:

In my opinion, there are a few sprinkles of VBFA here and there. VBFA would be Very Bad Financial Advice.

Here are a couple of examples:

Mihalik believes in “good” debt and “bad” debt. For someone who openly professes all debt to be slavery, I have to wonder, is there good slavery and bad slavery?

He believes that going into debt to finance your college education is “good debt” yet he encourages people with mortgages to sell their house and rent instead.

I’m telling you, parts of this book just didn’t add up to me. Personally, I don’t believe in good or bad debt. It might be better to phrase it as necessary and unnecessary debt. Mihalik would probably agree on that point, it was just phrased poorly several times throughout the book.

One other bit of VBFA was this little paragraph:

So what about stocks? Are they a good asset to own?
The can be. The right stocks can appreciate significantly and make you wealthy, but most stocks do not pay dividends and thus, do not qualify as income producing assets.

Huh? Well, I can honestly say that the stocks I own that do not pay dividends have still been real assets. I have my dividend paying stocks in a tax deferred retirement account at present, and they haven’t really produce all that much income anyway. Either he’s wrong or I am, but I definitely consider my stocks assets. Might be just a difference of opinion, but I respectfully disagree with his assessment, and his definition of an asset.

The Ugly:

The first half of this book I thought was really good. But as the book wore on, the tone began to grate on me. It just….reminded me of a young man who thought he had “everything all figured out” and was looking down on those that didn’t. You are all SLAVES…SLAVES I TELL YOU.

I’m not in debt personally, and it still got on my nerves.

I give Mihalik full credit for digging himself out of his own debt in a single year, and I know that he must have worked very hard to do it. However, he flippantly suggests that you sell your home and rent somewhere just to get out of your mortgage without batting an eye.

Now, let me tell you, I have rented all of my adult life and it’s no joy. Especially when you have a family. Sometimes people have to make tough decisions, and sometimes that means selling their homes.

It’s just that Mihalik suggests selling your home in the same tone you would use if you were to suggest going for ice cream. Just because you say something in a cheerful way does not make it less painful, or easier to take. Depending on your situation, it’s not necessarily good advice either.

I will be positive and say that I truly hope Mihalik will write another book in about ten years that delves even deeper into the issues of debt and slavery. I would love to read it. Mihalik is a great author, and he’s got his foundation in order. I think, season that with a little time, and you have a true recipe for success.

For now, I would actually recommend Debt is Slavery for all teenagers, and young college students. I think that this is the audience it is best suited for, and I think it has a much needed message. I do plan to pass it on to my nephew, and I sincerely hope that he reads it. It will be an excellent stocking stuffer for anyone in the 16 to 21 age group.

Debt is Slavery is also an excellent read for any adults out there who may have trouble with ing things on impulse. For everyone else, check it out at your library, or give it a skim in the bookstore to see if it resonates better with you than it did with me.

Have You Read Debt Is Slavery? Tell Us What You Think of It!

Keep Reading:


Leave a Reply

Your email address will not be published.


Privacy Policy Terms and Conditions About Me Disclosure Contact Me

Newsletter Sign Up