Debt debt debt debt debt debt debt debt
debt debt. It’s like this horrible song that no one wants to sing. We got it in
our head, it’s part of our consumerism and what we’ve been taught is that all
debt is bad but today, I want to challenge that and I want to ask, okay, I
get it, there’s bad debts out, there’s consumer debts but are there good debts? Alright, my friends, we are doing
financial education 101 and we’re here to talk about that big hairy scary word,
debt. Debt, depending on how you are raised, there’s a good chance that you
were raised in a home that said debt is bad and there is so much truth to that
but that is not the entire truth. Let’s talk for just a moment about what bad
debts are, right. We have parents that are teaching their kids and they want them
to be wise but the reality is, we’re being taught by consumers, not
professional business people usually and not professional investors and so what a
good well-intentioned parent is going to do is they’re going to tell their kids, a car
is a debt and when you buy a car on loan then you’re going to have to pay that back
and by the way, your car is going to go down in value, it’s not an asset, it
depreciates in value. You have this obligation and you might sign up for a
five or a six year obligation every month shelling out hundreds of dollars
so you can pay that. What makes that a bad debt accurately stated is because it
costs money. You lose money every month, you need to make more money and service
that debt and the payoff that you get is having a car but what we’ll do then is
we’ll say, well I got my car and I need a boat and you might even say I need a
house. This is going to sound crazy but you’re like, whoa whoa whoa whoa whoa, Kris, you can’t
call a house a bad debt, that’s an asset. Your house is an asset and it’s a bad debt.
Why? Because it costs you money. Look at the lifestyle you’ve built for yourself,
your car costs money, your house costs money, your cell phone bill costs money.
If you continue making choices to increase your revolving debt and your
credit debt then it’s like, I also have $10,000 on credit cards, I’ve got my
student loan debts and at the end of the day, I’m piling up things that cost me
money. Sometimes we say debt that’s bad, we almost look at it and we associate
bad with wrong which is also not necessarily true but what I want to do
is, I want to share with you a good debt. I know some of you
are like, whoa, Kris, this doesn’t make sense, what do you mean
good debt? Debt by its nature, that four-letter word, it’s bad and so if you
have it, it’s bad. Let me share with you a different kind of debt. If I buy a house
for $100,000 and it’s worth a hundred and twenty thousand dollars so I buy it
with some equity in it, is this good or is it bad? Well if I bought it and I do
nothing with it and it costs me then I’m going to put it into my bad debt pile but
if I rent it out and on a lease option for example with my compassionate
financing system, you can get my book for free by the way, I’ll teach you this
whole thing, it’s just up here in the top left corner. If you buy the house and you
do a lease option, let’s say you’re making $400 a month on it, after you’ve
serviced the $800 bill, so let’s just say it’s a $1,200 to rent
it out, I have an $800 mortgage.
Well I’m servicing with this investment my mortgage and there’s $400
left over and all of a sudden it goes from being a bad debt and it turns
into a good debt. Why is that? Because by having this asset in my life, I’m $400
more a month better off by having my personal house in my life
under the same $1,200 a month mortgage, I’m $1,200 worse off
every month for having it. Both are assets but one makes me money and
wouldn’t cost me money and so just pause for a moment and you got to create a
balance sheet in life where your good debts are actually bigger than your what?
Than you’re bad debts. Most of us we just have bad debt. I’ve got debts that cost
me money and then we can feel trapped in our job and this is where we start
striving and wanting this thing we call financial freedom because we’re enslaved,
weren’t bondage to choices of the past and to be responsible with those choices
means how do I service my car? How do I service my house? How do I service my
credit card debt? How do I service my student loan debt? How? And if you don’t
have a plan for that then really what you’re doing everyday by going to work
is just trying to make a bunch of money to pay for a bunch of past choices that
depreciate in value and sink you deeper and deeper. Let’s talk about gray area
debt, let’s talk about student loan debt. If I want to go to school and get a
college degree, is this a good debt or a bad debt? Friends, if you go to college
and you get a degree and it helps you earn on average twice as much as just
someone with a high school degree then that schooling investment can
actually make you money and if the priest income is used to pay that debt
off then it can be a good debt and this is the question that you really need to
start asking yourself, is this financial choice of leverage or is this loan going to
make me money or is it going to cost me money and this is what’s going to eliminate
the gray area and it’s going to help you know good debt and bad debt. Right now I just
spent six figures on a mentoring program with Tony Robbins, went to this amazing
Tony Robbins event, it’s one of his highest level events and he has a very
limited number of people that can come into his really expensive mentoring
program and basically travel the world with him, tour with him and learn from
him and grow from him. That was a big expenditure and the question is, is it
good or is it bad? Well what makes it a good debt is because the time I’ve
already spent with him has put my business on a different trajectory and
it’s teaching me how to be a better businessman, it’s also teaching me how to
clean up my psyche and bring it to a new level,
that’s all making me money so I classify that as a good debt and so you just got
to make sure you’re not justifying choices and actions but you really got
to ask, is the choice I’m making going to make me money or is it going to cost me
money? And if it’s going to make you money, it’s
likely going to be a good debt, if it’s going to cost you money, it’s likely going
to be a bad debt. Let me give you another example. Some of you here are subscribers,
right? Subscribing that they’ll get my daily videos and some of you might say,
well you know, Kris, I’ve been learning so much from you about real estate. You
know what I want to do? I actually want to get with you live, I want to go to one
of your events and I want to learn from you and maybe I’ll spend one or two
thousand dollars to learn from you on how to do your best real estate
strategies from A to Z, give me the contracts, the flyers, the paperwork, you
could actually put that on a credit card for example like a visa and
whatever credit card you have you go a couple thousand dollars in debt and now
it’s time for the magic question. Whether it was a good choice or a bad choice
comes down to financially speaking, is it going to make you money or is it going to cost
you money? If that is a part of your education and it helps you do one deal,
let’s say you even have a house, you take my lease option system instead of just
being a landlord, if you own real estate, you’re a landlord, please take the lease
option course, let me give you my contracts and all of a sudden you
collect a $5,000 downpayment by putting a family in that home and you’re
clicking $200 more month than you would on normal rent, add that up over 12
months and that’s going to come down to putting an extra ten thousand, maybe
seven to eight dollars in your pocket. Would you pay
$1,000 for $7,000? I’d do that trade all day long so even though you went into
debt, if you use the gains to eliminate that debt then all of a sudden your
credit card becomes a what? It becomes a tool. Every month, I pile
thousands of dollars into an insurance policy and it’s a special type of policy
where I can pull the money out, I can use it, I can invest it and then I pay it
back. I’m basically borrowing my own money for
myself while it’s earning gains and it’s got protection. Well I’m putting money in
there and putting it towards an obligation that I can borrow, use and
leverage. If I’m using it for something that will make me money, is that a good
debt or a bad debt? It’s good so this is the big question that I want to leave
you with today is, as you’re building your life, one of the things that you
want to strive for, eliminate your bad debts. The other thing you need to
strive for, create good debts. Kris, are you telling me that you want me to
create good debts? Well understand that when we buy real estate unless you’re
waiting to buy it all paid off, what we’re not trying to do is sign it for a
30-year mortgage and pay it off, we’re not even trying to pay it off, what we’re
doing is we’re controlling the asset, control it for four or five years, make
forty or fifty thousand, maybe a hundred thousand dollars, we sell off the asset,
the loan is gone, what’s left over is a pile of profits that you’ve made along
the way. Friends, this is ultimately how people
get ahead in life is they learn the difference between good and bad debt and
then they make choices and alignment with that and one of the things that I
love about real estate is that when you buy the best real estate and you do it
the right way then you are in fact usually acquiring a good debt and it’s
making you money and then in time you’re going to retire that debt and you’re going to
be left better off. This is the investor mindset, that’s the consumer mindset and
so what I hope you gain from today’s video and what I’d love for you to do is
comment below and share in your life what decisions have you made that you
classify as bad debts and why and what good debts do you have and why and
here’s the goal, every year you need a goal to be adding to this balance sheet
the number of good debts that are making you money because the more of them you
have, the more successful you are, the better off and you get to a point where
you can wipe out all that debt be way ahead of the game and still have your
residual income. Friends, create good debt and cancel out the bad debt. Take home
message, eliminate the bad debt, get as much good debt as you possibly can
your world’s going to get rockin. If you want to know how to get into the good
stuff, the good debt that is going to produce residual income, cash flow, equity
growth, and really get you where you want to go in life, click the link of me and my
team can share with you exactly what that looks like
otherwise, get live with me at one of my events where I can share with you the
mindset of the millionaire because this good debt bad debt, it really comes down
to the real estate between the two years and there’s a lot more where that came
from so click the link, find out more, subscribe, ring the bell and see you
tomorrow.