$400K is now middle class
(media.kotakuinaction2.win)
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I figured it was something like that, but even then I'd rather just pay in full and own the asset. Having debt hang over my head, even if it's more cost effective, just doesn't sit well with me.
You have to set emotions aside and analyze the numbers. My current mortgage interest is around 3%. I can buy treasury bills that yield 5%. That's a guaranteed 2% profit I can earn for borrowing money on my house. And that's t-bills. I get a lot more than that from my stock portfolio. Hmm, pay off my 40 year mortgage tomorrow, or leave the money in my etrade account where in 5 years there's enough money there to buy 5 houses outright. Which feels better?
Well a great example is medical debt. I COULD pay it all off today. But why the fuck would I do that? There's 0 interest. I make more money the longer I string it along with zero downside.
Same with debit vs credit cards. There is 0 advantage to using a debit card. Use the credit card and keeping the balance at 0 has the exact same "debt" as using a debit card with all kinds of upside.
This is the difference between good and bad debt for a consumer.
Then don't be a farmer or run a business. You'll never have the $150k in liquid cash you need to buyout materials for the job that will net you a $50-75k profit.
That's good debt, it's debt that will make you money in the end.