I've always connected with the views of Mr McCawber from Charles Dickens' David Copperfield book
Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
I was in debt when I was young and I hated it.
I hated the control others had over you and the way you had to work hard just to keep your head above water.
I've been thinking about debt issues a lot recently.
First there's been the huge problems in the economies of the world. The UK has implemented unpopular austerity measures (although they are more bluster than substance as savings are tiny), the United States is spending money like it's going out of fashion and in Europe we've had the bailouts of Greece and Ireland and the rumours that Portugal, Spain, Italy and Belgium may be heading the same way.
Second, the has been a big affiliate launch by an Internet marketer called Eben Pagan called Self Made Wealth. I was lucky enough to receive a review copy and whilst it's very good, I've never been so conflicted.
It's targeted at those who want to wealthy but are struggling financially. Quite simply these people make the wrong decisions about money, don't have the right beliefs and don't act in the right ways to attract and keep wealth.
The marketing is excellent and I'm sure the pre-launch content has helped get many thinking in the right way but the price is a whopping $1,997.
I wrote elsewhere "It seems cruel to show people what they need and then let them discover that they can't get it. A bit like snatching food away from a starving man."
And that got me thinking about the way we market to poor people and those in debt and the moral responsibility marketers have.
The Marketing Tactics Of The Drug Dealing Scum
How do kids get hooked on drugs?
Well first there's the curiosity and what it will be like and the pressure to "look big" in front of their mates.
Second, the drug dealers know that if they can caatch the kids early, they can be hooked so they make an irresistible offer - free or very low prices on the first few samples to create addiction.
Now isn't that what the banks do?
They make credit easily available and lure habitual borrowers to them with discounted rates and then jack up the interest rates and costs because of the small print which hardly anyone reads.
There have been a lot of furniture advertisements on TV in the last month - and they make a very powerful offer - get your new three piece suite here and you'll get interest free credit for 4 years and pay nothing for the first 12 months.
You get new furniture and you don't have to pay anything for a year.
This type of instant gratification is tough to resist.
From what I've read, I understand the human brain is very bad at weighing up immediate gains with future costs and sacrifices. It's a fault in our programming thaat we don't think about the consequences or we are optimistic that things will be better in twelve months time.
And once you get in debt, you get stuck on the treadmill, running fast to standstill.
It gets worse.
I think it's correct that interest rates depend on the security of a loan. Some people won't pay back and those who are virtually guaranteed to shouldn't be saddled with the costs of supporting the insolvent.
But it means that the more in debt you are, the lower the credit score, the more you have to pay for what you want.
Loan sharks take it to an extreme.
There have been a few horrendous stories recently of a small loan escalating into a massive debt with interest rates of 10,000% or more.
Caveat Emptor - Buyer Beware?
Is all fair in business? Should the buyer take responsibility?
Is profit all that matters or should businesses want to do right by their customers?
Marketing (and business) is about finding solutions to problems and the poor and in debt need help.
I had one client who helps benefit claimants get the state benefits they aare entitled to. He does an important job and is entitled to make a profit for the good he brings to his customers.
I prefer dealing with cash-strapped businesses than those that are already successful. It's much more satisfying helping someone double their profits from a low base because it's life changing stuff.
Dan Kennedy is no wilting violeet in this area. He takes the view that people are going to spend whatever money they have. The only question is where. It might be buying something worthy from you, something not so good from a competitor because you've wimped out of your marketing or gambled on the 2:30 at Haydock Park.
Personally I believe the markeeter should care for the well-being of customers but I also believe in the freedom of choice and personal responsibility. I hate teh idea of a nanny state decising waht's right or wrong for those it deems are too feeble-minded to make their own decisions.
It's a difficult area. What do you think?
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