Debt is not Bad. Being #Debt Free is not FIRE, Invest More!

The Financial Griot

Debt is not Bad. Being #Debt Free is not FIRE, Invest More!

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If you think being Debt Free is a Big Deal, It is just 10% of FIRE

In this episode, Lovely and Lawrence talk about the growth of the Debt Freedom Journey and how it’s not always as great as it seems. Turns out Lawrence chooses violence again (but he means well).

Popularized by Dave Ramsey in the 2000s, Debt Freedom and Financial Peace University (FPU) have re-positioned an emotional argument as objective truth.

Debt is somehow very bad, all the time!

For a bit of background, Dave over-leveraged his hand prior to the housing crash and the bank called his bluff.

Embarrassed and humiliated, he bounced back due to privilege and stumbled unto a more promising venture, public speaking.

Equipped with real life experience and trauma, he now wages an endless and lucrative crusade against debt.

Is Debt Even that Bad?

To be clear, NO! Good money management is at the intersection of arithmetics and critical thinking.

For example, local bank savings account still yields 0.01% annual rate of return. An investment of $10,000 in 2021 would have yielded $1. In contrast, an investment of $10,000 in Bank of America $BAC stock would have yielded $14,881. In contrast, an investment in JP Morgan Chase $JPM of $10,000 would now be worth $12,811. While an investment in American Express $AXP of $10,000 would be $12,743.

There is a huge difference from those numbers versus earning $1.

Financial Literacy is the real path of wealth. We have to understand how to grow our money wisely. Being afraid of debt without all the tools to beat it, isn’t the smartest or shortest path to success.

Why FIRE is better than Debt Free?

Let’s reframe our understanding of being Debt Free?

Money is not just emotional, it’s a logic game where you have to understand your numbers and how to grow the positives while minimizing the negatives. If you are pushing 45+ and are heavy in high interest credit card debt, you should tackle them. Why?

Your interest rate is likely taxing you are 16.99% annually. Since we can’t guarantee those returns in investments, we need to crush those ASAP. Further more, most people should aspire to have a mastery of their own discipline and credit card use way before you hit 25.

This will save you the headaches and heartbreaks.

Financial independence and retire early (FIRE), on the other hand is a movement that forces you to shift from the spending class to investing. Overtime, your investment if positioned correctly will pay for your expenses thus allowing you to retire early or retire optional.

FIRE makes full use of the financial literacy spectrum by showing you that you can pay debt and invest at the same time. If you need a second opinion check out, Episode 252- Is Debt Good or Bad? Debt Payoff Strategies & Leveraging Debt to Reach Your Goals.

Don’t be Debt Free but Financially Broke come retirement. You could still lose your debt-free home if you can’t pay for the taxes.

Here’s a bit about our FIRE podcast:

The Financial Griot Podcast is a play on two words (Finance + Griot) that hold significance in closing the racial wealth gap.

Merriam-Webster defines a Griot as a West African historian, storyteller, praise singer, poet, or musician. The griot is a repository of oral tradition and is often seen as a leader due to their position as an advisor to royal personages. As a result of the former of these two functions, they are sometimes called a bard.

As such, we tell the stories that others don’t.

Stories that we should share for growth, opportunity and understanding. Beyond that we talk about how to tackle debt efficiently, invest money and grow wealthy.

Specifically we teach you how to become Financially literate, incorporating actionable steps and ultimately building generational wealth.

So there you have it, The Financial Griot or TFG for short. You will be in for a treat. The hosts were able to amass over $2.5 Million in wealth in about 8 years and are on track to retire early. If you want the secrets; we will gladly share them since opportunity is abundant and Win-Win.