#84 - Debt

It is a sad but true statement on the picture above. Our current system is solely based on how much debt you can occur in your life time. It is also sad to think that we need things and these things are so overvalued we have go into debt to get them.

Bankers invest in a new car which they lend to you only to have you drive that car off the lot and it losses about 10% of it value if not more simply because it is not new anymore. However the Bankers still want 100% of the borrowed money back with interest of course.
Those same bankers will invest in a new home and let you live in it and use it only if you agree to pay back the value of the home with interest. Then they increase the value of the home even though it's used now when it comes time to sell it. Let's look at what the banks can make off a home.
House is built for 400,000 * invested by the builder and money borrowed from the bank. +Banker
House is sold for 500,000. nice little profit by the builder
Bank lends money to new owner. ++Banker
Home users of Banks property for 5 years. +++Banker
Home users decide to sell home for 550,000 and Banker lends money to new home users. ++++Banker
And let's say this trend goes on for 20 years and each time the house keeps going up for sale it is valued at 50,000 more that the last time. So the Banks original investment of 400,000 has now turned into mortgage of 700,000 dollars. Or
Year 0 - 400,000 * bank lends money @ 3% to builders of home
Year 0 - 500,000 * bank lends money @ 3% 1st users cost of home
Year 5 - 550,000 * bank lends money 3% 2nd users cost of home
Year 10 - 600,000 * bank lends money @3% 3rd users cost of home
Year 15 - 650,000 bank lends money @3% 4th users cost of home
Year 20 - 700,000 * bank lends money @ 3% 5th users cost of home
So that Banks original investment of 400,000 has no turned to 700,000 which is pretty good return on investment so it's no wonder Banks want you to keep buying new homes. It's in their best interest!

Thank you for your support and comments. Please ReSteem if you find this content interesting.

@digestingreality