Financial Voice

Wednesday 19th December 2018 06:23 EST

Dear Financial Voice Reader,

At Christmas people worry the most about debt. Personal debt is soul-destroying and if you have it, please get advice from all the online sources and friends and talk it over with friends who can advise.

Too many people take their lives with worry at Christmas.

If you’re a country, you could go to the IMF, but even the UK and US who are going to spend like crazy next year will not need to go to the IMF. Despite all their debts the credit card companies ie Chinese and Japanese, will keep lending to them. And they are giving them near interest free credit cards.

It is true if we had no debt then debt repayment interest could be spent usefully.

However, the debt can be rolled over forever with a low rate of interest and the credit rating is not affecting the cost of borrowing.

Of course, it would be a lot better if we had huge growth and lots of exports. But then again it would be great if we all doubled our salaries too. It makes a lot more sense for the UK to borrow to spend on raising the skills of its people and building infrastructure and attracting the best global talent.

The problem is, with an aging population, healthcare costs go through the roof and spending on those is not economically productive -it is caring and we should and must be. So again, we need to upskill the country whilst we can borrow the money cheaply. It’s a little like borrowing to do an MBA before your parents get too old and need you even more.

America will probably stay out of wars, since the President is either too scared to take on Putin or too much in love with him. Spending from Governments should mean you will feel happier. Roads, rail should all improve.

So the price? Well, there may not be. Sorry not to be glum. Personally, first thing you should do is cut debt and save. Then only should you think about investing money in the markets in 2019.

Spend to invest in yourself or in something that will give a return, but do not buy consumer goods. Trust me, things are good, but you will be really happy debt-free, unlike your country.

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