My daughter is taking a high school personal finance course, and debt comes up in conversation almost every day.
Overall, it’s pretty conventional stuff – save for the future, avoid debt, invest for the long term, etc.
While it’s sound advice for most people, I have a nagging feeling that it’s also a prescription for a small, narrow life, rather than an abundant one.
Yes, you can build a conservative portfolio augmented by savings, hold on to it for 40 years, and with some luck it may become a very nice nest egg. But where’s the adventure in that?
Once you realize the powerful and positive connection between debt, cash, and wealth – something I wish I realized three decades ago – your options expand significantly.
Money Is NOT the Root of All Evil
Let’s start with debt.
In many circles it’s considered evil, a source of many grievances in the world.
But think about it for a moment: Has anything great ever been accomplished without debt? After all, debt is the foundation of capitalism and the source of great wealth.
Consider the following:
Donald Trump would be a Brooklyn clerk without debt.
The railroads never would’ve been built, nor the Erie Canal or the Hoover Dam.
America wouldn’t have won World War II.
America’s great corporations would’ve stayed small businesses, if they survived at all.
And very few Baby Boomers would have ever owned a home.
America would be but a shadow of itself.
Of course, I’m not advocating being reckless or betting the farm on a risky venture. One needs to be reasonable and intelligent, and we should always remain mindful that debt is a tool.
But as a rule, if you have access to debt – preferably corporate debt – at reasonable rates, then you should load up for property, a great value investment, or a solid business plan. It’s this debt that ultimately leads to cash.
Leave A Comment