When it comes to money, there is a lot of bad advice floating around out there. It's no wonder we have $14 trillion in consumer debt today!
Let’s set the record straight debunking the top 3 lies you've been told so that you can begin to build wealth instead of digging a deeper hole of debt year after year.
Lies, lies, lies. Borrowing money used to be a last resort but today debt is so common that we’ve gotten used to it...and we can't seem to get enough. Did you know there once was such a thing as a debtors' prison? Borrowing money used to be taken much more seriously than it is today and paying it back even more so. Whether you're locked away in a prison cell for an unpaid debt or not, you may be living in your own kind of prison if you have debt that you may not be able to pay hanging over your head day after day. One little mishap in life and you're likely headed to the bankruptcy court. Sad but true for so many!
Today we're numb to the numbers and we salivate over "interest-free" knowing there really is no such thing as a free lunch. These days we're looking for a reprieve on student loans, mortgages, and everything in between, but that debt won't be forgiven...your time to pay it off will be extended instead.
We don't usually look at it this way, but every time we whip out the credit card, for large and small purchases, we’re taking out a loan riddled with interest and we're digging a hole that isn’t so easy to crawl out of. By the way, credit cards were never intended to replace savings accounts! The concept of saving for something you want has been replaced with charging it instead. That's what a financial train wreck looks like!
Sometimes debt is used as an excuse to justify living above our means or not prioritizing savings. The truth is, it is NOT good to have debt and not everyone has it! It is possible to live without credit card debt, car payments, even a mortgage – it just takes setting goals, exercising self-control...and having a financial GPS.
With all that said, it’s not always a bad thing to have debt - after all, debt can leverage us into a business, a home, or a much-needed vacation. Using somebody else’s money as leverage is a good thing IF you have a plan and the self-discipline to pay it back as quickly as you can. Otherwise, cash is still king, and it always will be.
Lies, lies, lies. Seriously? Let’s try that concept on for size. You give me a dollar and I’ll give you 30 cents in return. Is that the kind of write-off you refuse to live without? Paying OFF a mortgage should be your first priority…and it IS possible to do with the right tools without making extra payments, and without living like a pauper. Once you’ve paid off your mortgage (in as little as 1/2 to 1/3 the time by eliminating and floating INTEREST) and you’re out of debt THEN you can find plenty of write-offs to keep you happy.
Nobody should EVER purchase a home under the pretense that it’s a good write-off, and this advice comes to you from a seasoned real estate professional. Buy the house – pay it off as fast as you can – then buy another and another! That’s the way you build wealth…NOT by staying in debt just to have a write-off. There are plenty of ways to offset your tax liabilities – investments – a home-based business – lots of things rather than holding onto that mortgage as if it's your only way to catch a tax break.
Lies, lies, lies. It’s easy to think that everything would be so much easier if you could just make more money. While it’s true that a higher income can help, that’s only part of the equation! You’ll need good financial habits and self-discipline whether you make a lot or a little. You also need a financial GPS for the fastest way to $0. A financial GPS can help you get rid of your debt in record time by eliminating interest so that you pay A LOT MORE toward the principal instead. It's like having a financial advisor with you 24/7 to be SURE you take the right route to becoming debt-free. Priceless!
Let's face it, if you manage your money poorly now, you’ll probably continue to manage it poorly even if you make a lot more of it! However, if you are able to effectively manage what you make now, increasing your income can allow you to save and invest that much more. Wouldn't you rather build wealth than just making payments on debt loaded with interest? Don't let low-interest rates fool you. If you purchased a $300,000 property at 3% interest for 30 years, you'll be paying $155,000 in interest on that loan! I'll bet you could think of a dozen different ways to spend $100,000+ you're not paying interest!
The straightest path to wealth doesn't (necessarily) require that you make a lot more money - it requires that you have a lot less debt. How "pretty" could you be sitting IF you could be depositing (or investing) an amount equal to the mortgage payment (and other consumer debt) you no longer have?
If you want to have a financially secure future...if you want to BUILD WEALTH in your lifetime...it's time to wise up about money and stop believing the lies being told by the ones with an agenda to sell you on debt in the first place.