The Total Money Makeover is a book by Dave Ramsey and the just of it is if you live debt free you will be wealthier. If you can pay your expenses and live on your income allowing for savings then you will get money working for you, rather than working to pay off the debt.

For 65% of Americans it is hard to do for they have an average of $15,654 on their credit cards. Similar to most people it did not start that way, but evolved over time and thanks to high credit card rates it is very difficult to pay down the debt. To pay it off, means living on less than your income and accumulating savings. Similar to most people, things comes up – home repairs. desiring new things; a keeping up with “the Jones” or your neighbors. There are a multiple of elements happening in your life.

One of reasons it is hard to pay off the debt is credit card companies are great marketers. They know if you pay by credit you tend to buy more. If you pay by cash, you buy less. Credit cards are the lifeblood of retailers and in our economy if people did not shop, the economy would fall apart. In the book Total Money Makeover, Mr. Ramsey notes Sears and Target received 40% of their income from credit card payments. You use their branded credit card, typically buy more and the retailer receives the money from interest payments.

Linking to dividend paying stocks, the above is one of the reasons to own shares in either MasterCard or VISA or both. Both stocks have risen and both pay dividends. MasterCard has a 40% ROI. With the economy seemingly to move towards more digital, credit cards are here to stay, although it is increasingly possible to use your debit card.

There are more questions than answers, till the next time – to raising questions.