A Debtor’s Story by Money Champ

Preface
I was inspired to share the story below because recently a close friend of mine was “pestered” by his banks and creditors to clear his debt since he seemed to be doing fine. In their opinions, before he start investment, he should clear his debt first….Is this the right way to get out from financial challenge?

Please read the story and you will have the answer.

Reference
This is one of the many great stories in the book “The Richest Man in Babylon” by George Samuel Clason. This story had helped the Archaeologist who discovered the tablet carved with this story to overcome his personal debt problem…

Story
The main character of the story is Dabasir, who was a run-away slave from Syria to Babylon. No, to be more specific, Dabasir was not born a slave. He was the son of a well-to-do family. He was sold to Syria as a slave when he over-spent all his inherited wealth plus owe many debt to creditors, that his creditors sold him as a slave. (During those days, slaves are common and they are treated like an object that can be bought and sold.)

With the help of the first wife of his Master, Dabasir was able to run away and returned to Babylon.
When Dabasir returned to Babylon, all his creditors went to him to demand for the money he had owed them.
Dabasir was despaired.
Luckily, one of the creditors – the money lender – taught him 70-20-10 money management rule:
For every income earned, allocate:
* 70% for expenses;
* 20% for repaying debt; and
* 10% for paying himself or reserve for investment.”

As soon as Dabasir gets a job, he split the 20% allocated for debt payment and worked out a payment scheme to refund all his creditors. While some creditors complained the schedule was too long, most were happy to get back some of the money they loaned to Dabasir. It was definitely better than having zero repayment during the days when Dabasir was a slave in Syria.

Slowly, Dabasir was able to pay back all his loans. In fact, his creditors had also developed high respect towards him. His relationship with his wife had also improved.  One specific details I must highlight. The story clearly highlighted two points: 1. Dabasir would still occasionally indulge in a nice meal with his family members, as long as the amount spent was within the 70% allocated. 2. Dabsir used the 10% he allocated for “himself” to startup a new business that increase his income and speed up the return of his debts.

Teaching from above Story:
If you unfortunately went into debt, NEVER focus on the debt. Develop a money management system that you are comfortable and commit to follow through the debt repayment.