467-Debt: Should we Measure it Based on Financial Risk or Lifestyle Risk?
Radical Personal Finance
Joshua J. Sheats, MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP
4.2 • 1.9K Ratings
🗓️ 30 June 2017
⏱️ 36 minutes
🧾️ Download transcript
Summary
I've long struggled to know how to advise people with regard to debt. On the one hand, the use of debt can dramatically increase the financial returns of an investment. On the other hand, debt can have a dramatic negative impact on the lifestyle of the borrower when everything goes wrong.
So, how do we reconcile these two things?
I've come to see that they're two entirely different scales. Because they are two totally different scales (think: how do kilograms and degrees Fahrenheit interact with one another), it's hard to simultaneously factor in both.
Enjoy the show,
Joshua
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Transcript
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| 0:00.0 | Today's episode of Radical Personal Finance is brought to you by Wonder Capital, an online |
| 0:05.2 | investment platform that allows you to invest in commercial solar energy projects and earn |
| 0:10.6 | up to 8.5 on your money. |
| 0:12.8 | Set up an account for free at wonder capital.com slash radical. |
| 0:16.7 | Wonder is spelled with you. |
| 0:18.4 | Wonder capital.com slash radical. |
| 0:22.1 | Today on the show I'm going to share with you a resolution that I've reached in my mind on how and why I think about debt and debtlessness. |
| 0:35.0 | It's been a conflict here in my thinking and in my advice, |
| 0:39.0 | and I think I've finally resolved the issue. |
| 0:41.0 | Let me share it with you. Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, |
| 1:02.2 | of skills, insight and encouragement |
| 1:04.0 | you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years |
| 1:08.0 | or less. |
| 1:09.0 | My name is Joshua and I am your host. |
| 1:11.0 | We're going to wade into the debt versus debtlessness conflict. |
| 1:16.2 | This is a conflict that I think we've all faced, including in our own advice for ourselves and for others. |
| 1:23.6 | If you start talking about the world of debt, you wind up opening up a can of many different opinions, many different perspectives. |
| 1:38.0 | People look at the situation from very polarized ideas. |
| 1:42.0 | For example, at one end you have people who say |
| 1:43.6 | never borrow money for any reason whatsoever. On the other end you have people that say |
| 1:48.8 | you should do everything with other people's money after all if you can do something |
| 1:52.2 | with other people's money and save your own, you'll |
... |
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