Unload Bad Debt & Grow Wealthy

Debt, what a loaded word that is. There are some people out there that say that there’s no such thing as good debt. I actually fundamentally disagree with that concept. But I do want to talk, about three forms of bad debt today. Credit card debt, car loans and yes, mortgage debt.

Starting with credit card debt. I understand, and I’ve been in this situation before, where you get to the end of the month and there’s not enough cash in your checking account, payday is not for a few more days, and you use that credit card just to get you by, and you tell yourself, well, I’m going to save a little bit next month and I’m going to pay that balance down and I’m not going to pay any interest. Well, what ends up happening far too often to far too many people is we get to that next month, we don’t save a little bit, and that credit card balance grows and we keep justifying it and months go by and years go by, and then we find ourselves with massive balances on our credit cards, paying ridiculous interest charges, and that burden is just too much to carry.

Car loans. It has become accepted in American culture that if you have a car or two or three, you have a car loan or two or three. I want to call that out as being bad thinking. I always tell people, you’ve got to buy a vehicle that you can afford, pay cash for. And if you have car loans right now, I would say you need to do everything you can to pile all the extra resources that you have in to pay these loans down. If you say, listen, I don’t have any extra resources, I do understand that as well.

Mortgages, I know this might be a little bit controversial, but I actually always encourage people not to carry a mortgage on a property that is not generating income. I have a  teaching series on how to convert your home into an income producing asset. In that case, mortgages are not a bad thing. But the mortgage oftentimes is 25, 30, 40% of the average American’s total take home pay, total household income. Man, that’s a massive burden that you are carrying to pay for just for the place where you’re living every month.

I’m actually here to help you. That’s my mission, and my purpose is I want to help people get freed from the trappings of debt that keeps us from making progress and building significant wealth. 

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