Why ‘Get Out of Debt’ Can Sabotage Your Financial Success
Contrary to conventional wisdom, financial freedom doesn’t happen when you have no debt. In fact, the road to debt freedom and the process of maintaining it will actually halt your progress. That’s not to say that you should run out and rack up your credit cards and abandon your debt – that’s just irresponsible. It’s to say that the missing key to financial success; to reducing financial uncertainty; to experiencing financial peace – doesn’t happen when you have no debt.
When you have access to credit you have access to an incredibly powerful wealth building tool. If you use it incorrectly, you don’t get the results you’re looking for. When you appreciate it for what it can do, and you take the time to know how to use it effectively, you can experience its full potential in ways you didn’t previously know existed or were too fearful to act on.
The problem is that this powerful tool called credit has been provided easily without adequate instructions. Sure, there are the basic operations such as how to make purchases and payments, and what the interest charges are and the consequences of not making payments. These are the just the basics. Unfortunately because the more advanced operational instructions haven’t been taught, or have been misused, we have millions of people using the tool who don’t even know that they don’t know that there are better ways of using what they already have.
Think about it. Do wealthy billionaire tycoons like Donald Trump make financial decisions about how to pay off the mortgages on their skyscrapers? Not likely. They have learned to use credit to acquire an asset that creates income which pays for the expenses of the building as well as the credit that was used to make the purchase in the first place.
The bigger problem we have with this focus on getting out of debt is that far too many people have been given access to credit and have used it to acquire the lifestyle they want, rather than using it to earn that lifestyle. They know how to work for a living and how to access credit, but then they listen to scarcity minded teachers who haven’t fully grasped the concept of how our economy operates. For some strange reason, many people seem to think that by taking money out of the economy by stopping spending so they can get rid of debt that they have been told is ‘bad’ that somehow they’re going to be able to live happily ever after. This is partly because they haven’t received the proper instructions on how to maximize the tool they have in the form of credit but also because they have lost the ability to understand how to create income.
Haven’t we heard from some great success teachers about the concept of ‘what you focus on expands’? If you focus on what you don’t want then aren’t you really telling yourself that you’re not worthy of the desires you have been acquiring with this tool called credit? Does negative reinforcement really inspire confidence to learn and to develop new skills? Does cutting back and denying your interests ultimately help you learn how much money you really want to earn so you can live the lifestyle you really want to live? There is a balance that happens naturally when you are committed to your vision.
When you focus on getting out of debt you are actually reinforcing lack, scarcity, fear and unworthiness. Sure, some non-deductible debt with high interest rates is better gone – but the way to get rid of it is to focus on creating income. You have to find ways to earn the lifestyle you desire, rather than acquiring it with plastic cards. And when you can master that skill, the income will be sufficient to look after the debt and your desires, and then we can all live happily ever after!