As many of you know, our office is here in Richmond, Virginia. A little over an hour west of us, near Charlottesville, is one of our favorite places, Monticello – home of Thomas Jefferson.

Jefferson, of course, composed the original draft of the Declaration of Independence and was our 3rd President. His home reflects the interests of someone many have called “America’s Leonardo DaVinci.” It is filled with artifacts reflecting his study of science, his love of art, and his vast library (which he later donated to lay the foundation for our Library of Congress).

Monticello

Image via Wikipedia

Jefferson tinkered with Monticello throughout his life, renovating and rebuilding to experiment with new ideas and technologies, and trying to make it more suitable for whatever fancy had his attention at the moment.

But do you know how Jefferson created this now-historic National Landmark?

Credit.

Jefferson inherited the land for Monticello from his father. Throughout his life, his purchases of building materials, agricultural supplies, and fine Madeira wine were made simply with his signature. His fame was such that he could send a team into Charlottesville, have them load up their wagons with essentials, sign a chit or receipt, and then just leave. As Jefferson came into a few dollars, he would pay off some of that debt. But throughout his life, his taste cost a lot more than he earned. And it showed at Monticello. A contemporary who visited in 1824 (about 2 years before Jefferson died) said, “His house is rather old and going to decay; appearances about his yard and hill are rather slovenly.”

When Jefferson died, his daughter and family were forced to sell the estate and nearly all of Jefferson’s possessions to try and pay off his debt – a task that took over a generation.

But let’s talk about you.

Most of you likely own a vehicle. If you’re smart, you arranged attractive financing and manage a low monthly payment. So, great – you own a car.

But you don’t really. Whoever provided that financing – the institution you make your monthly payment to – holds a lien on that vehicle and can take it back if you become delinquent.

How about your home? It feels good to be a homeowner, doesn’t it? But to buy that home and create your own Monticello, you likely took out a mortgage. So you may have a deed in your name, but your mortgage says you can’t transfer that deed until your debt is settled.

All of that likely makes sense. Why, then, do so many of us look at credit cards like “free money”?

We’re a cash-poor society. Much like Jefferson signing IOU’s to fund his dreams, Americans live on credit. According the New York Federal Reserve, between things like mortgages, student loans, cars and credit cards, we owe $13.86 trillion dollars.

That’s “trillion” with a capital “T”. Over a trillion of that is credit cards alone.

All of this is money that we, as consumers, are going to have to eventually pay off.

We’re not saying that debt is – in and of itself – a bad thing. Sometimes debt is good. Making a good deal on a car allows you to get to work and school and provide for your family and your needs. Buying a home puts a roof over your head and provides much-needed security. And having a credit card provides a safety net for unforeseen expenses.

But we need to be realistic about what that debt represents and how it accumulates. We don’t want our legacies to be like that of Jefferson – a generation trying to settle a lifetime of open accounts.