Mortal and Immortal Debt Follows Different Rules
Mortals see immortal debt and benefit from immortal debt, but each follows different rules. We pay debt obligations, immortals can carry debt forever! Also debt financing rules differ for mortals and immortals.
That substantially changes how each can behave and use debt well.
We Mortals Must Pay Our Debts And Theirs!
Mortals have a finite lifetime, now fast approaching a 90 year average. Still, there is an end date and before we are gone, we expect to pay any debt. Typically, debt gets paid well before we reach our personal best before date. If not, liquidating our assets can satisfy any remaining debt obligations.
Anyone wanting to build wealth, financial security and retirement independence, must first have a plan and the means to pay off debt. Before we receive a loan, mortgage or any form of financing, we accept the obligation to pay the debt. During our lives, we mortals can use debt in many useful ways. But always, we must manage it and repay it within our lifespan. We can’t carry debt forever.
Immortals can! And we mortals get to pay to carry the debt of immortals as well!
Debt Plans Differ For Immortals
Immortals are large corporations or governments of any size from a local village to the largest, richest nation. Immortals are legally structured for an indefinite lifespan! That significantly changes the debt management possibilities for immortals.
Powerful enterprises and nations expect and behave as if they will live forever. And their lenders go along with that expectation! That allows immortals to use and manage debt in ways mortals can not.
3 Ways Lenders See Immortal Value And Security
- Real assets owned or controlled by financial immortals
- Real cash flow financial immortals can use (taxes or income)
- Full trust and faith that a financial immortal can and will pay (fiat currency, junk bonds)
When lenders see the value and security of the financially immortal, immortal debt can become reality. Debt of all sorts held by financial immortals can then be perpetually rolled over or replaced, making real repayment terms extend forever with a due date of never!
Mortals Can See Immortal Debt Costs And Benefits Go Forever
Rolling debt forward year after year, generation after generation makes such debt seemingly immortal. Very long lifespan organizations such as governments and large corporations can refinance debt again and again. That lets these financial immortals use operating strategies that include financing with immortal debt!
The costs of carrying immortal debt continues indefinitely. Still, society can benefit from immortal debt. Developing useful new or expanded infrastructure can benefit all. So the benefits can also continue indefinitely.
For example, building, financing or expanding common transportation or communication infrastructure can benefit a nation forever. Such developments can deliver benefits and opportunities well beyond a normal mortal lifetime. Well conceived and executed expansion can bring great and even permanent unlimited benefits to a society justifying very long-lasting debt.
And we get to pay it all! That is the rub! We pay, through our taxes, fees or by doing business with the companies. The offsets are benefits we enjoy for that need to pay! Therefore, we mortals can see and benefit from immortal debt. Those benefits, muffle if not stop our grumbles over paying the bill to carry that immortal debt.
Raising awareness that government debt and financing, differs considerably from that of an individual, is the point being made here. As long as the government can responsibly carry the debt, for greater social benefits, such funding can make very good financial and social sense.
The Bond Game – Are You Getting Your Fix?
Where does it all come from? The fixed income market floats on the collective and seemingly endless ocean of immortal debt. That is the bond market. Investors and lenders place many trillions of dollars to finance the operation and growth of today’s governments and modern economies. This is where lenders, investors, governments and corporations meet.
It is also where mortal and immortal debt are both in the mix. The financial service industry has a huge stake in this game and the challenge of placing this ocean of financing. The fixed income world is a huge topic on its own. This is the home of the fixed income part of your portfolio and directly impacts your mortgage.
Takeaways from the lesson Mortals see immortal debt include:
Personal debt must be paid in our working life
Corporate and government debt can carry on for many years beyond person’s life
Citizens and investors can see institutional debt
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Movers & Shakers Of Stock Markets,
Lesson links:
Influencers that move markets Lesson 1
Understanding banks and credit Lesson 2
People, places and parts make markets Lesson 3
Invention builds banking power Lesson 4
Mortal investors see immortal debt Lesson 5
Markets spark interest in interest Lesson 6
Financial crisis lessons learned Lesson 7
Bernanke knows booming and busting Lesson 8
Cryptocurrency considerations Lesson 9
Internet money in a digital future Lesson 10
Analyzing analysts, data and investments Lesson 11
Next lesson 6:
Markets spark interest in interest
Bryan
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