No Debt Is Freedom

[Tom Goans]

No Debt Is Freedom

Consider this:

Your money working for You when you own a residential rental property investment. The tenant goes to work each day to pay you to live at your real estate investment.

However, You are working for someone else when you have debt. You work each day to accumulate money to pay off the debt. You pay extra for the use of the borrowed money. In effect, you are working for those who provided you with credit. You are paying for their new auto, fancy office, and gold watch.

Being debt is freedom.

It is fascinating how many ways having debt can be justified by some.

Do you own the real estate investment if there is a loan secured by the real estate? No. Stop making the payments to the lender and find out who really owns the real estate.

If you have credit card debt, some of your money is paid to the credit card company instead of going to family enjoyment, education, or retirement. You are working for the credit card company. The same applies to all credit. No philosophy, just a fact.

Some argue the recent recession was caused by excessive debt of all types at all levels. The root of many recent real estate foreclosures was excessive debt.

Being debt is freedom. It allows more freedom for your family and future. Add up the interest paid on all the debt each year. How much education will this buy? How much will this fund a retirement account?

Your comments and thoughts are welcomed and encouraged.

[Bryan Hancock]

Do we really need to have this debate again? This has been discussed ad nauseum on the forums. Do a simple search and you'll find proponents on both sides of the argument.

You can be a "slave" (non-free) by NOT using debt too. Not everyone starts off having a developer family with loads of money to get them started. If you don't have much capital you NEED to make it work much harder to gain the freedom espoused in the post. Thus NOT using debt would make one more of a "slave" if one is equity-constrained.

I find if fascinating how folks that start with a different set of initial conditions than most choose to preach to others about how they choose to live their lives too. Remember that everyone starts in a different place. Those that are truly dedicated and hard-working can prudently use debt to grow their capital stack and become "successful" using wealth as the sole measuring stick.