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Why Financially-Free Beats Debt-Free

We are debt-free, they screamed. Well, you know what – so what? Hi, I’m Keith Weinhold, long-time host of the popular investing podcast “Get Rich Education.” I also write for Forbes, and I write for Rich Dad Advisors. Are you debt-free? Do you desire to be debt-free? Well, I want to ask, why do you want to be debt-free? Especially now in an era when interest rates are so historically low. Let’s say you have a car loan at 4%, okay? Do you want to pay off the 4% car loan, or do you think you can go ahead and beat that 4%? Well, you want to beat that 4% with something that actually pays you income every month and keeps you liquid. You can do that with something like real estate, my favorite asset class. Let’s say you go ahead and purchase an income property that has an 8% cash on cash return. That cash on cash return is your total monthly income minus all your expenses. And, then you take that and divide that by the amount that you have invested in the property. 8% cash on cash return – that is a very reasonable number. Well, now you are making an 8% return, and you are only paying 4% on this car loan, so that difference, which is known as arbitrage – borrowing at a lower rate and investing at a higher rate – that difference is your profit. So, you know what? Why be debt-free? Because, being debt-free, that just means you don’t owe anyone anything, but you often grind and work hard and eat dirt or eat beans and rice for years to get there. Ask yourself what kind of life you’re designing for yourself when you go ahead and struggle so hard to be debt-free. When you have passive income streams like I’ve just discussed from real estate, you can be financially-free. Being financially-free means you have enough income streams, so much passive income that you can go ahead and replace your job. Basically, replace your active income with enough passive income. That’s when you can quit your job and declare financial freedom. Being financially-free means you can do whatever you want to do whenever you want to do it, which is substantially better than this scarcity-minded notion of being debt-free. Instead, think with an abundance mindset toward being financially-free. So, don’t be debt-free. Be financially-free. Since 2014, the powerful “Get Rich Education” podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best market without losing your time being a flipper or a landlord. Show host Keith Weinhold writes for both Forbes and Rich Dad Advisors, and delivers a new show every week. Since 2014 there has been millions of listener downloads in 188 world nations. He has A-list show guests, including top selling personal finance author Robert Kiyosaki. “Get Rich Education” can be heard on every podcast platform. Plus, he has his own dedicated Apple and Android listener phone apps. Build wealth on the go with “Get Rich Education” podcast. Sign up now at getricheducation.com

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