Kathleen makes $40,000 per year.
I think it’s clear that she needs more income. She seeks investment advice.
Here’s what Kathleen got. Click below.
One achieves financial freedom by successfully converting enough equity into cash flow.
A paid-off home achieves the opposite.
This caller, Kathleen, cannot increase her $40,000 income this way.
She’ll have fewer options, no greater income and less leverage. Then, next year, she’ll get hit with a giant capital gains tax bill.
Poor Kathleen is being “cheerled” into making fear-driven decisions.
This violates many GRE wealth-building principles:
- Do The Right Thing Before You Do Things Right
- Financially-Free Beats Debt-Free®
- Ethically Employ Other People’s Money
- Don’t Follow Money; Make Money Follow You
- Give Your Money Multiple Jobs
- Winning The Inflation Triple Crown
- Expand Your Means
- Don’t Quit Your Daydream®
I don’t normally do critique videos. I don’t disparage people; I take aim at the advice.
It’s likely that I will do more of these. It shows the dichotomy between abundance and scarcity.
As I’m fond of saying, “The scarcity mentality is abundant and the abundance mentality is scarce.”
Dave Ramsey is a principled guy. He is probably better than me at helping undisciplined people eliminate their bad debt, like high APR credit cards.
But rushing to eliminate all debt is panicked behavior.
Like a knife, debt can do harm in the wrong hands.
Debt can impoverish the undisciplined and uneducated. In the right hands, debt provides: opportunity, income, OPM access, service to others, tax benefits, inflation-hedging, and the leverage magnifies wealth.
A knife can kill someone if they’re a victim of a deep stab wound. If one learns how to use a knife, it can filet a nice salmon.
If Kathleen called you and told you that she fears having debt on her income property…
…that would sound as strange as if someone told you they fear for their life because they found a knife in their kitchen.
Learn. Act. Expand.
Would you rather have a child that grows up to live a life below their means… or expands their means?
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