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Why You Should Consider Decreasing Your Need For Financial Institutions...

Have you ever considered how well you could function without a bank, debit card, credit card, brokerage firm, insurance company or other financial institution?  It would be a bit difficult.  The reality is that we have accepted and bought into a financial system such that, as a society, we’ve become nearly dependent on it.  Here’s the less obvious part of the reality.  Every dollar that you have, borrow or transact in the financial system is either assessed a fee by the financial system or leveraged for the benefit of the financial system.  In other words, they’re borrowing against your resources and earning additional profits for themselves.  In short, for most people, disentangling themselves from financial institutions will result in more money and resources in their own pockets instead of generating fees for the institutions.

            The first step in taking back your financial power so to speak is to stop being a slave – that is an interest payer. This represents the most obvious way that you’re being ‘chained’ to the system. In fact, taxes and interest are the two biggest expenditures that most people have in life.  Income taxes at least have been structured so most people don’t relate to them for what they are - an expense.  Other types of taxes related to spending can be somewhat controlled by how much is spent.  Paying interest on the other hand is always a choice because it results from the choice to be in and stay in debt. A simple commitment to being free from debt and careful attention to one’s financial status and situation is all it takes to be debt free and avoid being an ‘interest slave.’

     Other ways to reduce your payouts to the financial system by disentangling yourself include:


1)    Avoid ATM transactions that incur fees – some do and some don’t; get clear on the agreement with whatever company issues your card.

2)    Only purchase insurance that is specifically required and raise the deductible to the maximum limits.

3)    Learn how to invest your own money as opposed to letting someone else take management fees to do it. Investigate local investments where your capital can work ‘on main street’ vs. ‘Wall Street.’ One example is investing by making secured loans to local people and companies.

4)    Use cash more often for purchases.  Every time you use a credit card, the merchant you pay gives up between 1.5-2.75% of the transaction amount to the financial network that facilitates payment.  Sometimes you can negotiate lower fees to service providers if you pay in cash especially with local merchants.

5)    Investigate trading and bartering your goods and services.  Bartering what you have for what you want is another way to eliminate transaction costs associated with acquiring goods and services. Of course barter and trade existed before money and is the purest form of commerce.   


© The Financial Independence Project, Inc. – Eric Johnson - 941.713.9307