Ill-Gotten Gain
"These men lie in wait for their own blood; they ambush only themselves! Such are the paths of those who go after ill-gotten gain; it takes away the life of those who get it." Proverbs 1:18-19
Over the next few weeks I am going to read through each chapter of Proverbs and dig out the items that can be applied to personal finances and share them here. Today is Chapter 1...Ill-Gotten Gain.
In Chapter 1, Solomon warns against taking advantage of another person for your own personal gain. In other words, ripping someone off or screwing someone over to make some money for yourself. Solomon warns that any profits obtained from this type of transaction harms the thief in the end.
The very first thing that came to mind when I read this, was the practice of "Payday Lending." A practice that takes advantage of people who are in desperate need of money. A business built on accepting "hot" checks, that a person has non-sufficient funds for, and holding it for up to 2 weeks until payday. All this for a small fee.
Here's the big issue with this. The same person who was struggling 2 weeks ago when they went to take out the "Payday Loan" is most likely not going to be able to pay back the $200 + $60 in fees when they get their next paycheck, so they'll fall into making the minimum payment due on this loan. This is what these rip-off, scum bags are counting on.
Here's an example I pulled from an actual online Payday Lender's website for borrowing $200 to "get you through till payday":
| Payment Number | Amount of Payments | When Payments are Due |
|---|
| 1 | $70.00 | 5/1/2014 |
| 2 | $67.00 | 5/30/2014 |
| 3 | $64.00 | 7/1/2014 |
| 4 | $61.00 | 8/1/2014 |
| 5 | $58.00 | 8/29/2014 |
| 6 | $55.00 | 10/1/2014 |
| 7 | $52.00 | 10/31/2014 |
| 8 | $49.00 | 12/1/2014 |
| 9 | $46.00 | 12/31/2014 |
| 10 | $43.00 | 1/30/2015 |
| 11 | $40.00 | 2/27/2015 |
| 12 | $37.00 | 4/1/2015 |
| 13 | $34.00 | 5/1/2015 |
| 14 | $31.00 | 6/1/2015 |
| 15 | $28.00 | 7/1/2015 |
| 16 | $25.00 | 7/31/2015 |
| 17 | $22.00 | 9/1/2015 |
| 18 | $19.00 | 10/1/2015 |
| 19 | $16.00 | 10/30/2015 |
| 20 | $13.00 | 12/1/2015 |
Some quick math tells us that this person's total payments (on a $200 loan) come to $830. This loan was paid back over a 20 month time frame. This equates to a 360% INTEREST RATE! Do you see why I call these people scum? They are intentionally setting up a business that's sole purpose is to take advantage of people who were already struggling in order to make insane profits.
Now, don't get me wrong. I'm not saying that providing a service and getting paid well for it is bad. When you serve people well and receive a profit for your work, that is a beautiful thing. Just be honest in your dealings and strive for well-gotten gain.
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