DEBT-The 21st Century Financial Buzzword
I read A TON of financial articles and books, follow “the gurus” on social media, watch and listen to business talk shows, and discuss personal finance with anyone who will allow themselves to be vulnerable and dive into such an “American Taboo” topic.
I have found within, about, the first 7 seconds the word DEBT is mentioned.
It is referred to in ways, such as: getting out of it, stupid, slavery, unfair, baby steps, over-extended, bad behavior, avoidance, ball and chain, embarrassment, over-obligated, and the list goes on and on….
I have always been one to believe in the idea (and realization) that what we think about or focus on is what we get more of. (Some would even call this attracting what you think about.)
If all anyone keeps talking about is: getting out of debt, pay off debt, debt is dumb, debt, debt, debt…
Aren’t people keeping DEBT at the front of their minds, and, therefore focusing on DEBT?
It does make me wonder.
As stated above, debt conjures up many intense emotions and feelings.
But, what if we took the emotional associations away?
Let’s think about debt as if it were dynamite or TNT.
Is it a good thing?
Well, if it’s used for the right things like: building tunnels, mining for stone, demolishing a deteriorating structure to make way for something new; then it’s being used for a good thing.
And, let’s face it. If there was no dynamite to assist with these projects, it would take: MANY shovels, MANY people, and MANY aching backs to attain the final products.
Now, we can look at the misuses of dynamite. Many of the retro-cartoon characters (Wylie-Coyote, Bugs Bunny, Grandma Dynamite on The Flintstones) used dynamite to blow up something to hinder the progress of the protagonist characters.
So, in the right hands, dynamite can be quite a powerful tool.
In the wrong hands, well, things blow up.
Debt is a lot like a lever. If we try to pull something out in the physical realm, we use one. Think of a nail and a hammer. We use the claw of the hammer to act as a lever to easily release the nail from the wood. If we did not have the leverage of the hammer, removing the nail becomes a bazillion times more difficult.
In the idea of money sense, we could, potentially do a whole lot more with our money, if we used some debt to leverage our investments. (It’s a whole lot harder to make business deals, if there is no money on the table to talk about. )
This brings in the factoring of risk.
Risk needs to be discussed here because without risk little to zero money would EVER change hands.
Risk is a choice. You can either handle it or you cannot. Think about the stock market and its recent volatility. Think about the purchasing of a new home. Think about buying a new car. Buying a boat, saying, “I do”, buying a new family pet, buying lunch at the corner deli….There is risk in EVERYTHING.
It is best to become familiar with your tolerance of risk and your desire to make money. You always want to be in control of your money choices and knowing your risk tolerance will help you with this.
What are the personal finance gurus saying?
- Peter Adeney is a financial author and personality most often known as Mr. Money Mustache. He consistently talks with his followers about : wealth building, minimalism, early retirement, happiness, and the environment. He is very well-known for advocating the FIRE Movement (Financial Independence, Retire Early) and living a life like most do not.
- David Bach, the author of Smart Couples Finish Rich and and Automatic Millionaire encourages his followers to focus on a part of the money equation that is positive-the income part. He always advises to pay yourself first by building up savings or adding to an emergency fund. He rarely will be heard mentioning debt, except to avoid ever paying high interest fees.
- Grant Cardone known as the hose the Cardone Zone. He believes that all debt is not created equal and you cannot grow (monetarily) with out it. He is widely known for focusing people on their earning potential and making enough money to not worry about debt.
- Barabara Corcoran, the famed real estate investor and member of the hit show Shark Tank , believes in all things attitude. She looks at personality traits of each individual she will be making investment deals with. (These deals could be employee related, property related, bank related, etc.) She usually is looking for a good attitude, meaning are they positive and ready to win.
- Chris Hogan is a best-selling author of Retire Inspired and Everyday Millionaires and host of The Chris Hogan Show. Chris’ general focus is on financial independence. He uses the same seven-step system from Ramsey Solutions but moves retirement savings up to step 4, instead of last.
- Robert Kiyosaki is another guru whom people flock to listen to. He is mostly known for his Rich Dad, Poor Dad books and courses. Robert is often heard referring to debt as good debt or bad debt. He is often found encouraging people to use good debt to purchase real estate or other money-generating assets.
- Suze Orman is well-known for her rags to riches story of losing everything in stocks and becoming very exceptional at making investment decisions. She is quick point out when people have made bad money choices and shares an urgency for being prepared for all that life has to bring financially.
- Dave Ramsey is well-known for his books/programs Total Money Makeover and Financial Peace University. He is well-known for his “Debt Snowball” program and the “7 Baby Steps”. Dave discusses debt, consistently, in his radio, tv, and articles
The famous financial gurus of the early 21st century, certainly, have much to say about debt and American personal finance.
*As you can see I listed them in alphabetical order as to exhibit no personal preference.
I think we can all agree that the opinions and rationales for personal finance in America are quite diverse. It is quite interesting to look at what makes the gurus popular and how their mantras can polarize groups of people to only believe one ways is best.
I have learned over the years this is, actually, a marketing strategy (yes, sales) approach. It is called selective distortion. When we humans feel that something is bad or inferior to how we see something this experience can manifest itself into: anger, aggression, or even a false sense of pride.
People demonstrate these ugly feelings in how personal finance should be handled every day on: social media, blog comments, and on phone calls into radio/tv shows.
So, let’s just keep in mind.
Not all debt is created equal.
If we are aware of the risks and the choices to be made, debt can be used to make more money through investments. (Remember how the lever can be used to make moving something easier with less effort. )
We must also remember the idea of what we focus on or think about is what we will see in our life.
Brian Tracy says, “The law of concentration states that whatever you dwell upon grows. The more you think about something, the more it becomes part of your reality.”
According to this theory of subconscious thought, if we are constantly focusing on debt, we are bound to have more of it show up and less likely to focus on wealth building and success.
In all of our realities, Personal finance is just that-PERSONAL, for you and me.
I hope you are well and focused on what matters the most to YOU and YOUR GOALS!