- Why you must get out and stay out of debt
- Buy on credit and you’ll pay for it twice
- The hidden cost of not saving and investing because you’re in debt
- The only good debt is dead debt
- Get out of debt to unleash your inner money maker
But here’s another reason to get out of debt. It’s hard to price, but it may be the most valuable benefit of all.
It’s peace of mind and freedom to make money.
When you’ve no debts, you literally don’t owe anyone anything. Your money is yours to do with as you will.
Sure, you may feel you owe:
- Your parents for raising you
- Your friends for the good times
- A beer to anyone who encouraged you through the bad times
- Whoever gave you the spare bed in debt article three…
But financially speaking, you’re free.
Many people get out of debt only to use that freedom to go straight back into the mire. They filled the void left by paying off their debts with… more debt.
A better plan is to keep up the momentum to start growing your finances, both by saving and investing the free cash, and also by increasing your earnings.
Make money for yourself, not some bank
I’ve heard many times from people who’ve gotten out of debt how liberating it is. They discover what I relish every day – that this month’s salary is going wherever I want it to go, not on paying for things bought and forgotten about years ago.
And here’s the real bonus – when you’re financially secure, you’re also more likely to look for ways to make money.
Everyone knows the rich get richer. Having compound interest working for you instead of against you is a big reason why.
But I believe there’s also a mental pay-off for the debt-free. Operating from a position of strength, you are more able to think of money as an opportunity and a tool, rather than as a burden. Your whole outlook on money and the language you use can change – and that’s the first step to getting richer.
In getting debt off their backs, these writers learned a lot about money and themselves. And they’ve kept on learning long after paying off their debts.
What about my pal Bob / Uncle Bertha / Donald Trump?
Sure, we all know a few people who (seem to) handle their debts and still grow their income faster than their repayments.
I’m not saying debt is always fatal disease. Rather, that it’s a hugely debilitating one, which can easily catch up and snuff out its victims.
How much wealthier would those income rich, asset poor debt jugglers be if instead of shuffling credit card payments, they put their brainpower into growing their investments or creating a passive income stream?
The bottom line on debt
If you’ve got any non-mortgage debt – even if you think it’s balanced by assets – pay it off as soon as you can. In every way it’s worth it.
Yes, it can be hard to get out of debt. But all that really matters in life is health, friends, family, love, and useful work or another purpose you enjoy.
Plus beauty and truth, as the poet said.
And I’d add Mexican food.
The point is: Last I looked, getting into debt to buy an iPad when you can’t afford it just to have one before your friends wasn’t on a single philosopher’s list.