![]() #3: Live on less than you make.Īgain, Dave isn’t wrong here, but I’d add to his point. How do you do that? By focusing on serving others and solving problems. If you’re in debt now, it’s smart to reduce your expenses while also increasing your income. But don’t focus on paying off any and all of your loans at the expense of investing in yourself. So, to add to Dave’s point: let’s not borrow just to consume. The problem is that when people do this without knowing how to be productive, or they get over-leveraged, then they get destroyed. Yes, it’s wise to stay out of debt, but there are times when you use other people’s money to acquire assets like real estate or a business. More liabilities than assets equals debt. When you have more assets than liabilities, that’s called equity. ![]() On the right side, list your liabilities. Take out a sheet of paper and draw a line down the middle. Sure, they offer us 1% on our money, but then they turn around and sell that money to other people for 4% interest.īut let’s be clear about what debt is. Banks usually are the biggest buildings in town and we’re willingly giving them free interest. While I wouldn’t use the word “stupid,” he does have a point. ![]() #2: You must get out of debt.Īt one point, Dave says, “When you spend your whole freaking life giving your money to banks who fill up the skyline and have furniture nicer than yours, that makes you stupid.” It’s a limited, finite game that doesn’t lead to your ultimate destination: wealth. When that is your focus,it minimizes the real road to wealth, which is value creation. I believe in mindful cash management, knowing where your money is going, paying yourself first, automatically saving, and not spending more than what’s left over, but I do not think budgeting is the answer.īudgeting is all about reducing, restraining, and restricting. One recent university study³ showed that when you go to the store with a budget in mind… you actually spend more money!ĭave makes the case that budgeting is biblical by quoting Luke 14:28-30, where Jesus talks about the importance of estimating the cost of building a tower so you don’t run out of money halfway through, opening yourself up to ridicule for not finishing what you started. And research has shown that budgeting actually backfires.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |