Debt and alcohol - why they are the same

For many years I have used the analogy that when a new lender opens, it is exactly like a new pub opening in a town centre

From day one you will be busy and the business will give every appearance of success - until you stand back and take stock - at which point you realise that the core of your early business consists of either those drunks, fighters or freeloaders who have been barred from every other pub, or simply the not-terribly loyal who will try something new for a few weeks and move on.


It was during a discussion on payday loans that dawned on me that the comparison actually runs far deeper than that, and that debt itself correlates to alcohol in many other ways.

The basic tenets here are beliefs and appropriate use.

Certain religions outlaw (interest-bearing) debt - and some outlaw alcohol

Many individuals believe either or both are inherently evil and should be avoided at any cost.

However the majority belief is that used in moderation or in appropriate circumstances alcohol can enhance social skills and even have health giving properties. The same applies to debt, which is why mortgages are deemed to be 'good' debt as they are equated to appreciating assets and security.

Occasionally many of us will over-indulge, act in a foolish way and regret it for a day or two after - and so with debt (though the hangover will be a little longer). For the most part there will be no lasting damage, though the risks will increase the more often you do it.

And then., there are the new-pub goers - getting barred from one pub after another. Latching on to a new bar and promising themselves that this time it will be different. We all know borrowers like that!