Another prophet speaking in 1898 that could have just as well have been speaking to the people of the world today. The United States has a history of boom and bust cycles driven by credit based speculation. Hopefully we learn this time. As individuals I think we might. As a nation I would be suprised.
"Now, I believe sincerely that one of the principal causes of the distress that exists among us--and I believe the same thing will apply almost universally through the land--is that people have gone beyond their means. They have borrowed largely, mortgaged their homes, their farms, and nearly everything they possess, to keep pace with their neighbors, competing one with another in putting on appearances and in carrying on their business on the credit bases that is so much in vogue in the world. . . .
. . . Many of us that have borrowed means . . . that we might put on an appearance at least equal to that of our neighbor, if we had not done so, but had lived within our means, and in addition had laid a little aside for a rainy day, today we would be the most independent people upon this continent. . . . So far as I am concerned, I would like to see . . . that whenever we buy a dollar's worth of goods we wither pay a dollar for it or something that represents a dollar, and that we do it without criplling ourselves at home or placing a mortgage upon us and upon our children. Every man that lives by credit is placing shackles upon himself and his family. . . .
Did you ever see anybody who went in debt and mortgaged and bonded that which he possessed, as free, as independent, as happy as the man who paid for what he had as he went along? We should live according to our means, and lay a foundation upon which we can build, and upon which our children can build after us, without paying interest on bonded debts incurred by us."
--Joseph F. Smith (1898) in Teachings of the Presidents of the Church, Joseph F. Smith
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This comment doesn't specifically apply to the quote but I couldn't figure out where else to type in. Anyway, in a recent R.S. mtg. we were advised, when working toward paying off the mortgage, to MAKE SURE you have plenty of $ in the bank to pay the minimun amount in case of unemployment, emergency, etc. This because should you pay down the debt considerably below market value, the bank will foreclose much more quickly in the event of non-payment than otherwise. Why? Because they can quickly re-sell and make a profit. The bank won't work with you much if you've spent all your $ already, paying down the balance. Ironic, I know, but it's a tough world out there!
Thanks for your comment Pam. I think it is a good one. We had originally planned several years ago to just pay down the house, when a friend told me that he had a professor who advised that it could take 1 month for every 10k of income to find a job in the case of job loss. I realized at the time that I only had about 5 weeks worth of savings, and that we wouldn't even have time to sell the house if I lost my job. We asked the Lord to help us get up to 6 months of emergency savings and with his help we achieved this goal rapidly. I'm inclined to have even more on hand than 6 months now in light of the current economic environment.
I would advise anyone looking to pay off their house to make sure they have enough emergency savings first to allow them to pay their mortgage, eat, pay utility bills, etc, until they can find a new job. Once you have this set aside then you can attack the house, but as Pam said, it may be futile to do so otherwise.
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