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Rice and Beans, Beans and Rice

There is bad debt.

There is also good debt.

In today’s media laden world there are more and more financial experts proclaiming the only way to live life in this economy is to be debt free.  Hey, don’t get me wrong I happen to like much of what Dave Ramsey preaches about credit and debt but I disagree about totally wiping out all of your debt, painfully living below your means, and eating beans and rice until you can afford the steak.   That’s no way to live life richly!  Rather it’s my belief each of us to adopt proper personal finance skills in order to keep the bad debt from taking over your life.

In this world there are good forms of debt that we all must use to make life’s freedom possible.   An example of a good debt is the home mortgage which can be leveraged to build equity or for investing in a property that creates you a form of income through rent.  We’ve failed in America in teaching which debt is good and which is bad.  Even consumer credit such as credit cards can be good if properly used.  We need to educate about the differences.

It’s my premise that bad debt is really just bad behavior by the consumer.  We need to be aware of our behavior which is causing damage to our personal finances, credit reports, and scores.  We need to be vigilant about correcting wrongs in the way we handle money and in our credit reports.  We need to educate ourselves about the good forms of credit that add asset value to our personal worths!  We will be discussing and learning strategies in future blog posts!

Until then I want you to reflect on this… living life richly in America today probably includes:

  • Earned Income (Job)
  • Capital Gains (From Investments)
  • Passive Income (From Rental Investments)
  • Credit Cards
  • Other lines of credit
  • Cash

On your journey towards a high personal worth, please order a juicy steak to celebrate the small wins!

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