A beginners guide to the complex world of finance...
If you look up the definition of usury in any dictionary you will find explanations like this one “the practice of lending money at an extremely high rate of interest.” (Collins English Dictionary).
If you look up the definition of usury in any dictionary you will find explanations like this one “the practice of lending money at an extremely high rate of interest.” (Collins English Dictionary).
If you take out a loan from many companies advertising on
television these days those rates of interest are commonly way in excess of
1000% and closer to 2000%. In real terms this means that if you borrow £1 you
will have to pay back between £1000-£2000. Far better to beg on a street corner
than borrow from such people who, used to be termed as loan sharks.
Far better to borrow from Credit Unions, high street banks
and building societies where the rates of interest are far more manageable and
there is less chance of bankruptcy. If we all did that, then the possibility of
massive debts would be reduced and the loan sharks would rather pleasingly go
out of business I hope. Just one snag with that... the most vulnerable people
of our nation cannot access these more favourable rates at present.
The assumption seems to be
that if we permit people on low income to have access to the lowest and
most advantageous rates of credit they won’t be able to pay even that which is
not true for the majority of people who strive to be law abiding. Low rates of
interest on borrowing is surely more preferable to people on low income taking
on extortionate rates of interest repayment to increase national debt. Usury
does not help and therefore, in my view is it should be outlawed.
To borrow £1.00 and be asked to pay back £1.50 is far more
reasonable and fair. It is after all someone else’s money that we are borrowing
and while we are borrowing it, they have no longer got that money themselves. Few
will give something for nothing unless it is to charities.
By comparison when we talk about inflation and talk about
interest rates of 1-2% it seems rather negligible, particularly when we take
into consideration the plight of other nations. Except that absolutely everything
we buy increases in cost and that (as we know) soon mounts up driving us toward
the temptation of more borrowing to cover our living costs as well as our expensive
habits.
Again people on low income and on benefits feel the brunt of
this the most. The expectation is that they can budget more effectively than
many a finance director with no means by which they can negotiate favourable
terms.
In our interests
If no one lent anybody any money, many would not be able to
travel to work, have a roof over their heads or the finance to start up a
business, hence why we have the complex financial structures that we see today.
However, I think the time is fast approaching when we as a nation and indeed
globally need to think about what we really need to borrow and why we need it.
We are now very used to living off credit cards without
being particularly well informed about credit rating and how that works. The
more assets (valuable things you could sell) you have, the more credit you can
secure so long as you can prove you can pay your bills. Your credit rating
increases the more assets you can acquire with the money you borrow. It decreases if you fail to pay your creditors.
What complicates matters is the value of your assets which
fluctuates depending upon what people say is worth money at any given point. For
example, a large stately home used to be considered highly desirable until
people realised how much they cost to maintain and keep in good condition.
While they still hold a certain degree of worth it is less than it used to be,
but the land they are on remains valuable. So when buying property the amount
of land and its location determines value as much as the style of architecture
and its condition. Sadly being fickle creatures we change our minds about what
is trendy about locations as much as we do anything else including clothing,
cars, technology, sport, art, food and politics!
What is popular in the moment is what is most valuable.
Predicting what is going to be popular and desirable is also a way of investing
in the future which is what stocks and shares is all about.
In short we have globally evolved into a species that like
to gamble and that strives to be psychic when it comes to money and finances.
This is fine except when we ourselves lose out financially. It then becomes
abundantly apparent with alarming speed that money is often wasted when some of
it could be saved as a contingency against misfortune. Savings also accumulate
interest, though not much in lean times.
It is in our interests to spend, invest and save all at the same time. The rewards of doing your research properly with regard to interest rates should now be obvious.
It is in our interests to spend, invest and save all at the same time. The rewards of doing your research properly with regard to interest rates should now be obvious.
What happens though, if you have no money to do these
things? Many don’t and those that are without funds find it hard to budget when
the rules of business and industry do not also apply to the private citizen.
Direct Debit payments for many on benefits or on low incomes are not possible
given that the benefit system in the UK works on a fortnightly payment schedule
and the rest of the world works on a monthly one.
Not all people receiving benefits are unemployed but their
income is so low they need extra help. Benefits are not a right, but they can
mean the difference between life and death. They can also make the difference
between a mere existence and a life of possibilities and hope. Nations that do
not have any benefit system tend to be third world counties.
Lessons from WWII
In Britain during World War II it was considered frightfully
bad form and not in the rules of cricket for people to profit from the
disabled, the sick, children, the elderly and those who were giving their all
to fight oppression, persecution, abuse, poverty and disease - ordinary and
extraordinary people of Britain in fact. Back then we had values worth fighting
for and preserving and in many ways (though not in all), we could claim the
moral high ground simply for being supportive of each other in our own land while
fighting oppression and persecution on behalf of others elsewhere.
Does Britain still have those values? When I see the unemployed, the sick, the disabled and the poor (many of whom work) being vilified and hammered by vicious, unrelenting criticism from those who have never experienced real hardship, I begin to wonder if we were justified in being victorious in WWII.
Perhaps if more employers paid their workers for all the hours they worked and fewer employers bullied, persecuted and abused their staff, and instead encouraged their workforce to train to learn a job, trade or profession and progress, then there might be an end to unemployment and an increase in wealth, health and happiness for all in this country.
I hope I still live in a nation that remembers what any life is worth and is prepared to invest, work and fight for the ethical values it claims to hold so dear.
Does Britain still have those values? When I see the unemployed, the sick, the disabled and the poor (many of whom work) being vilified and hammered by vicious, unrelenting criticism from those who have never experienced real hardship, I begin to wonder if we were justified in being victorious in WWII.
Perhaps if more employers paid their workers for all the hours they worked and fewer employers bullied, persecuted and abused their staff, and instead encouraged their workforce to train to learn a job, trade or profession and progress, then there might be an end to unemployment and an increase in wealth, health and happiness for all in this country.
I hope I still live in a nation that remembers what any life is worth and is prepared to invest, work and fight for the ethical values it claims to hold so dear.
