This Is Like Kryptonite To Your Wealth!

This Is Like Kryptonite To Your Wealth!


Every superhero has one – you know, the villain, nemesis or weakness that makes them vulnerable and relatable. Without those oppositions we wouldn’t invest our emotions or have reasons to cheer on their heroics.

Well, just like Superman (or insert your favorite hero) we too have our nemesis fighting us everyday trying to prevent our success. Whether it’s our (so called) friends, family, comfort zone, mindset, excuses or a numerous other things, everyone has to fight their demons.

But when it comes to building wealth, most people’s kryptonite comes in the form of enormous amounts of credit card debt.


According to 2015 study by NerdWallet, the average household carries more than $15,500 in credit card debt.  But even if you’re well below the average it’s still could be doing some serious damage to your bank account.   In my book The Consumption Trap I wrote about what I call the C’s of Consumption and go much deeper on how credit cards are your biggest deterrent and I give strategies on how to beat it.  For now I’ll give you just a small glimpse at it’s destruction (trust me, there’s so much more!).

Let’s say that you have a $7,000 credit card balance with a compound interest rate of 15% (the average credit card rate), that means your interest expense will be a little over $1,000 per year.  So it would be safe to say that you would have to earn that much to pay at least the charged interest right?


ana-lu-sa-pintogogglesbinocular-binoculars-eye-manip-texture-photoshop-ana-luisa-pinto-ana-lu-sa-pinto-luminous-photography-luminous-lu-eyes-funny-creepy-conceptualI don’t want to get too bogged down in the technical math with this illustration but to get the point across let’s just say that the person was in the 25% income bracket, paid their 7.65 FICA taxes and their 6% federal tax.

That alone represents an income tax rate of about 42% and we haven’t even considered state taxes, retirement contributions or the cost of medical benefits! But what’s my point you may ask?

Well, with nearly 50% of your income being eaten up by taxes, social security and employer benefits, you would need to earn $2,000 in pre-tax dollars just to cover that annual credit card interest payment. That’s twice the amount just to pay for something that you purchased with credit instead of cash.


Investopedia defines opportunity cost as, The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action. I like that definition but I would simplify it even more to say, “It’s the cost of making someone else rich instead of you!”

I believe that the opportunity cost involved with credit cards are not stressed enough. I just discussed how compound interest can dangerously work against your wealth accumulation but that same concept has the power to work in your favor. Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”images

Credit card debt puts most people on the “paying” side when that money could be “earning” more for them. And while I’m not here to suggest what type of investments you should consider with your money what I would stress is that every time you make an interest payment and pay more for the actual cost you are doing the exact opposite of what it takes to accumulate wealth.


It’s time to be your own superhero and get far away from your wealth’s kyprtonite. If you are currently struggling with large amounts of credit card debt than I encourage you to reverse that trend, save those interest charges that are making others rich and turn those opportunities in your favor!  I’m here to help if you need assistance, just make the Bat Call!

Shawn Dorrough

Financial Coach/Consultant 


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