Did Everything But Think: D.E.B.T.

By Joseph Lorick

Joseph Lorick was one of the many children born in an America that was addicted to debt. He grew up in an environment that fostered a reliance on debt, and only realized as an adult that this mind-frame would lead to future financial hardships. He believes to lessen the impact of debt dependency within America, we must teach today's youth how to avoid a future filled with debt problems. These writings offer solutions to these issues.

While some may think D.E.B.T. "Did Everything But Think" is a catchy title, it offers much more to readers. It is an all-inclusive guide to avoiding debt traps, while on the path of financial freedom. Lorick approaches personal financial management from a social awareness perspective. He points out the various influential factors that lead to increasing debt over a lifetime. This book provides all readers, despite their past, with the tools needed to obtain financial freedom. Did Everything But Think is not about momentary lapses in judgment. It addresses the real problem of undervaluing the importance financial stability and its relationship to obtaining lifestyle dreams.

By wisdom a house is built, and by understanding it is established; and by knowledge the rooms are filled with all precious and pleasant riches." Proverbs 24:3-4 (NASB)

• Language: English
• Publisher: Joseph Lorick
• Release date: Nov 27, 2012
• ISBN: 9781301501281

Joseph Lorick

Joseph Lorick was born August 25th 1981 in Baltimore, MD. He graduated from the 3rd oldest active high school in the country, Baltimore City College, in 1999. He went on to earn his bachelors in business administration from Bowie State University. As a senior, Joseph began his career in banking and has never stopped. He has worked in the collections, credit, mortgage, consumer loans, consumer checking, small business checking and strategies department within his eleven years of employment. During this time, he has spoken with thousands of customers and gained extensive knowledge about the financial habits of American citizens. Joseph is also a Christian, and has been for the last eighteen years. He works in the church as a financial counselor and also serves as a worship coordinator. During his spare time he leads financial freedom lectures and assists his community by teaching financial literacy. He is a strong believer in social progression through education and writes to further this cause.

Book preview

Did

Everything

But

Think

Did

Everything

But

Think

By

Joseph Lorick

COPYRIGHTS

Did Everything But Think

Joseph Lorick

Copyright Joseph Lorick 2012

Published by Agape Christian Books, Gifts & Music

ACKNOWLEDGEMENTS

First and foremost, I would like to thank God for inspiring me to overcome my faults. I also thank my parents, who made it possible for me to overcome my environment and taught me so much about life. Without them, I would be nothing. I thank my wife for her inspiration and constant support. There hasn’t been anyone more affected by this process, and I am so grateful for the patience she has for my nonsense. I love you, Rachelle. I thank my church family for their support and encouragement. I appreciate everyone that took the time to read over my first draft to help me become a better writer. Lastly, I would like to thank my Aunt Rita. She did something for me that I can never forget.

My aunt took time out of her day to teach me the value of reading. When I was a toddler, my aunt would take all the neighborhood children and me to Enoch Pratt Free Library. She made us check out at least one book and attend weekly story sessions. This experience was rare in the middle of Baltimore City. During a time when many adults were abandoning their children to the streets, she chose a different path. Every neighborhood needs an Aunt Rita. This book is dedicated to her and the love she shared with all the children she knew. I love you, Aunt Rita.

TABLE OF CONTENTS

Chapter 1- WHY READ ANOTHER

Chapter 2- PREVIOUS GENERATIONS

Chapter 3- CHILDHOOD INFLUENCES

Chapter 4- TEENAGE INFLUENCES

Chapter 5- THE FIRST CAR

Chapter 6-AFTER HIGH SCHOOL

Chapter 7- MOVE OUT OR STAY

Chapter 8- ADULT INFLUENCES

Chapter 9- RENT VS MORTGAGE

Chapter 10- HOME OWNERSHIP

Chapter 11- MARRIAGE< CHILDREN

Chapter 12- RETIREMENT

Chapter 13- ALREADY IN DEBT

Chapter 14- EMPOWERING OTHERS

1

WHY READ ANOTHER FINANCE BOOK

For far too long we have been influenced to lead a lifestyle that weakens financial freedom. I decided to write this book because I saw a need for more financial and socially relevant literature. We have enough investment books. I wanted to write something that genuinely assists all people with removing financial burdens. My goal is to empower people by providing information about lifestyle choices not consumed by debt.

I do not come from a wealthy family. I was raised in a financially responsible household, but we were never considered rich. Outside of my home, was a city more financially divided than most others in the United States. Consequently, I became exposed to the reality of a divided society and economic disparity. The city I am speaking of is Baltimore. Poor neighborhoods and wealthy neighborhoods were within blocks of each other but never overlapped. If you’re ever visiting Baltimore, drive down Pratt Street and observe the differences in living standards. The areas closest to downtown Baltimore are very well cared for, while those further away aren’t. A short drive down MLK Blvd would also display similar living standards. It is as if there are two cities inside of one, a wealthy city and a poor city. The people I grew up with seemed to always struggle in their battle to overcome poverty. They were continually trying to catch up to the living standards of the so-called well off communities. On the contrary, the people I worked with always seemed to be expanding their personal empire. Many of these people never experienced financial hardship. This difference was not an absolute but occurred often. Not all people living in wealthy neighborhoods achieve economic freedom and not all people living in poor communities are broke, but the opposite is often true. The real difference between the people in these two environments can typically be traced to one common factor, the availability of useful resources that assist with understanding how to achieve financial freedom. The ability to learn good financial habits is limited to our environments and technology, and not everyone will begin life with the same level of access to these resources.

After eight years of working in banking, I’ve learned a great deal about what is needed to achieve financial freedom and feel compelled to share this knowledge. I’ve heard countless stories of financial ruin and economic freedom. Those who were in financial ruin lacked residual income and had extremely high levels of debt. Contrary to popular belief, many of these people did not always earn low wages. Many of the six-figure earners had debt problems too. Financial freedom occurs when there is no dependency on loans and debt to sustain a lifestyle, not just when household earnings surpass national averages.

The most glaring observation I made while discussing financial problems with customers was an extreme disconnect between people with debt problems and those who achieved financial freedom. Each group made assumptions about the other, but neither took the time to learn from each other. This lack of communication and sharing with people from other communities contributes to the growing financial disparity within the United States. Some people prefer this division, and I am not here to bash them. Everyone has a right to their opinion. However, as a Christian, I believe in the principle of loving your neighbor and helping whenever possible. I prefer to give all people the information necessary to achieve financial freedom. This nation is stronger when fewer people are experiencing financial hardship, and we must learn to lessen the influence of those who lead us down that path.

Today, we’ve become too dependent on businesses that are not concerned with our well-being. The modern business model is solely about profit and pleasing investors. The aftermath of this irresponsible behavior was The Great Recession. This recession was a part of our society from 2008 until 2009. However, some of us are still in this recession. What helped to spur it? Lenders and marketers were encouraging consumers to live a lifestyle filled with debt. Homes were overpriced to encourage higher mortgage loans and cover up national debt bubbles. College tuition rose and obtaining a degree became almost impossible without using student loans. The newest cars were priced to require assistance from banks. All these changes and more contributed to The Great Recession, and it took years of changes in law and social norms to get there. Some people believe these problems began with the Federal Reserve. Others, when banks made it easier to qualify for loans. Some will point to other significant legislative events in our history, but the government did not do this alone. Our economy depends on consumers buying into debt consumption. The people within our society who can best attest to these changes are our seasoned leaders.

A few conversations with senior citizens will quickly reveal how much our country has changed over the past fifty years. They can tell you about times when people balked at the idea of using a credit card, getting thirty-year mortgages, using car loans, and building irresponsible debt. They offer stories of families working together to overcome poverty and starting family businesses. It is easy to pick up a history book and read about the history of our economy. However, the most revealing stories come from real people and not reproduced textbooks. It is unwise to seek answers from the very people that profit from our debt problems. These business professionals love our complacency. The same organizations producing textbooks and providing educational material are often profiting from our dependence on debt. I won’t name any of these culprits, but I encourage researching textbook producers. Pay attention to their source of funding and investors. This research will likely lead you to one conclusion. We must move beyond the stories told in these textbooks and progress towards new resources for useful information. BACK TO TOC

2

PREVIOUS GENERATIONS

Before I expose the tools needed for financial freedom, I must address how our country became addicted to debt. The first thing to remember when looking back at history is that nothing happens overnight. Ancient Roman and African societies provide plenty of evidence of their engineering breakthroughs leading to the foundation of modern civilization. To avoid creating another book, I will only focus on specific events that contributed to the birth of American debt consumption. The first event I would like to bring to your attention is the moment our country began printing money without the complete backing of gold and silver.

All U.S. currency was backed by gold and silver by 1861, which would become known as the gold standard. This currency standard was an accepted economic practice of most established nations, but an impending war would change everything.

The cost of the American Civil War (1861-1865) prompted our government leaders to leave the gold standard monetary system temporarily. This decision resulted in a long period of inflation and increased financial disparity between the states. When the U.S. finally returned to the gold standard after the Civil War, these variations made it nearly impossible to estimate the value of goods. But this was just the beginning of many of our current economic problems. The U.S. once again departed from the gold standard during World War I (1914-1918). Though we returned to the gold standard at its end, the system was left in worse shape than it was after the Civil War. Due to inadequate record keeping and accounting practices, there was no way to account for all currency in circulation. It became impossible to accurately back the known currency by gold. The Great Depression and World War II only create more separation from the gold standard. In response to this change, the Federal Reserve chose to print more money, backed by nothing but trust, to cover national debts. Despite these setbacks, following World War II the government did have an opportunity to return to a gold-based system. International seizures created a temporary increase in our gold reserves, but government officials did not use it to entirely back currency. They had something else in mind, superpower status. The Bretton Wood agreement of 1944 made the U.S. dollar the dominant world reserve currency. This was based on American political pressure on foreign nations and our massive gold supply. With this new power, the U.S. and Federal Reserve started printing more dollars than what could be backed by our gold reserve, and some countries became aware of this practice. By the late 1960s, France and a few other countries began to demand gold in exchange for the dollars they held. As a result, the U.S. gold supply decreased, which weakened the dollar, and a few years later President Nixon stopped meeting countries' requests for gold. In 1973, to ensure the dollar would maintain its global demand, The U.S and Saudi Arabia struck a deal. All Saudi oil had to be purchased with U.S. dollars. After these events, the dollar became more of an accepted value instead of a promissory note backed by real assets. However, the value of the dollar continued to decrease, and as U.S. consumption grew, so did the national debt level.

Monetary systems like this have contributed to the downfall of many other nations and empires. The fall of the Roman Empire is one example. Printing more money with no real value into an economy to address national debt problems will usually cause long-term debt problems. For some reason, our government hasn’t learned this lesson or are choosing to ignore it. Politicians seem to like the idea of creating national debt problems. However, the government was not alone in creating this dependency of debt, banks and lenders helped too.

Bank lending practices and gradual changes in usury laws contributed to our modern debt culture. Usury laws were created to protect people and businesses from paying excessive interest on loans. This system can be dated back to Old Testament biblical writings from Moses to the nation of Israel. In those times, lending to