#96 Debt Smart | The Most Misunderstood Wealth Tool That Exists (Series Preview)
Dec 23, 2023
Terry Condon
Debt is demonised, but what if it is THE most powerful tool you can wield to build your wealth. In this series you'll learn why 'debt is bad' is one of the most damaging messages in personal finance. Tune in to this ep so discover what we'll cover and why now it the best time to get across it.
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Debt is demonised, but what if it is THE most powerful tool you can wield to build your wealth. In this series you'll learn why 'debt is bad' is one of the most damaging messages in personal finance. Tune in to this ep so discover what we'll cover and why now it the best time to get across it.
Join the Private Podcast Community Click here to access free courses and trainings, build new habits, and connect with us and others on the journey to financial self reliance.
Other links 👇
Money mentorship: Click here to start putting what you've been learning into practice.
Follow us on Instagram: Click here to see behind the scenes of our business and learn more about personal finance in bite-sized chunks.
Speaker 1:
Welcome back to the show, terry. How are you mate? Oh, good mate, what?
Speaker 2:
are you laughing about? The intro is always the same, but always, like Terry, it makes me feel like my mom is telling me that I've done something wrong. That's the kind of intonation it was like Terry.
Speaker 1:
It's conditioned into me now. It's just a default pattern whenever I turn on the record button. It's like Terry Mate, we are about to dig into something that, as you know, I'm bloody excited about. I wanted to talk about this. Probably about nine to 12 months to get to this topic, and there's been a little bit of a lag for us to actually get here. What are we diving into?
Speaker 2:
We're going to talk about the role that debt needs to play as a part of your wealth strategy. And yeah, you're right, nine months ago, eric and we talked about we need to start talking about this on the podcast. One of the reasons why was, I guess, a sense from the first season that we are sort of more shares focused, but the truth is a little bit different to that. We're sort of kind of evolved things a fair bit and we've been talking about the role of debt in the program for quite some time, and also that just I feel like debt right now is very misunderstood, isn't it Even by experts.
Speaker 1:
I would say it's amazing how the misunderstanding of it and the role that it plays in wealth creation makes everybody feel more anxious than they need to about it. And so there's a massive reframe that we want to help you have through this series, and this is going to be a meaty one where what are we going to be about? Six or seven episodes, and we're going to hack a lot and we're going to get some great experts in to help us make sense of it too. And so, yeah, look, it's one of the biggest sources of stress right now, because when you don't understand it, you do just hear the headlines. You know you kind of step into the hysteria.
Speaker 1:
Everything going on right now.
Speaker 1:
You know interest rates at the highest point they have been in 12 years.
Speaker 1:
All of that is just seeping into the psyche of everyone, and we've seen so many people make comment to us.
Speaker 1:
It's like geez, things are so tough right now, and it's amazing how I've been spending a bit of time with guys that have been saying that and then, when you actually look at the numbers, they're doing OK, and it's just that fact that it just seeps in and everybody feels it because it's talked about so much.
Speaker 1:
So I'm keen to basically just make sure that we unpack that really well, help people see the role that debt plays and, importantly, like you said, probably update some of our listeners ideas around, because we've got a lot of people that have started with the program and said you guys are very much about shares, right? I think a lot of that came out of the first season and referencing fire a lot, and so it's going to be interesting to see how people kind of change their perception of that through this series in particular and in this exploration of debt essentially, yeah, and I just want to talk to you particularly like the subset of people that we see we're probably talking to a lot is couples, and it's a stage of life where you can move into sort of family formation.
Speaker 2:
You're probably going to be taking on debt. You're going to be moving towards buying a family home, buying your first home. You'll be taking on debt to do that and at the same time you'll also be incurring new costs as little ones come along, and this is probably one of the peak spending periods of your life and it will be just the way that it is. And if you've done that and you've taken on debt in the last few years, it would be easy for you to think we've made a bad decision because we're not feeling good about it right now and that there would probably be a mistake because on a long, a longer timeline, this could be one of the most important decisions that you make.
Speaker 2:
Most of the folks that we kind of look at if you really do study the folks that move towards financial independence a lot of them do use debt as an early part of their strategy to accelerate their journey, build a capital base, and they can then convert into more income over time, and so we really do want to reframe that for people, because you keep reading the articles, you keep listening to what people are saying and you really just get the idea that debt's bad, debt's dangerous.
Speaker 2:
That's the wrong thing. And the reality is it has to play a vital role in any wealth creation strategy because it's credit based system, and we're going to dive right into that, into the depths of that statement, throughout this series and it's probably, I reckon, one of the best times for you to understand it. Because, number one, if you just got it and you're doubting yourself and you think you did the wrong thing, you can feel a bit better. Number two, if you were thinking about get it, but now you're thinking it's the wrong time, you could rethink that and you could actually think clearly about it and potentially even do quite well. In a time where everybody else is fearful, you can be greedy and think about it on a longer term time frame. This could be a fantastic opportunity for you.
Speaker 1:
Yeah just how maybe destabilize some of the preconceived notions that you might have around debt is this question what if the aim is not to be debt free? What if the aim is not to be ridding yourself of debt? The simplistic thought is get rid of debt like rid yourself of it. It's bad. Debt is bad. Don't have it. And you know we obviously hear this from people all the time, so that in this, what we're going to cover in this series is basically everything we've learned, you know, tapping to decades of experience, and what we've unpacked from the people we've learned from our own experiences with it.
Speaker 1:
There's some really big questions. Is debt dangerous? What is the biggest risk and how can I avoid it? What is the biggest risk when it comes to using debt and how can we avoid that? What are the different ways I can use debt to build wealth? If I choose to use debt, how can I avoid making the big mistakes?
Speaker 1:
I'm going to get some experts in to help us talk through that. Should I pay down my mortgage or get invested instead? It's always this kind of conundrum that a lot of people come up with when they've got their home. It's like I want to invest, but I've got this mortgage to deal with at the same time? Shouldn't I get rid of that first? So we're going to dive into that question and help you think through that. Add a little insight. You don't have to choose. And then we're going to look at how debt can be used with property to grow your money as well, and why property plays an important role of all this too. Finally, we're going to look at when should I take on debt and when should I look to get out of debt. So what are the kind of signals and what are the times where you should take it on and when shouldn't you? Essentially, and how to think through that. So there's going to be a bit in there, there is right.
Speaker 2:
And you had a big call that we talked about just before we jumped on. You talked about the amount of money that you would have paid to have this information years and years and years ago. Do you want to just talk about that and maybe justify the numbers Because they're pretty big.
Speaker 1:
We were mapping this out, this series out, yesterday and we were having this conversation when you were in with Mitch and I made the comment, I was like I would have paid 10 grand to know the stuff that we're about to share on this series three years ago, because I know that the impact of this materially is hundreds of thousands of dollars, if not millions of dollars, for a lot of people over their lifetime. Massive, massive amounts of wealth that can be built if you understand these principles and, importantly, you can't not know it. Basically, this would take a little bit to kind of digest a little bit, but it's near impossible to actually expand your purchasing power, like be able to buy them all with your money over time without using debt based on our system, and so we're going to unpack that completely. But I would really want to point out you can't not know it.
Speaker 2:
Well, you can. You're just going to be very well, very much hurt by it. If you don't know it, it's going to be harder than it needs to be for sure. Yeah, the analogy I was giving yesterday for this is like once really, I this kind of really landed for me. I kind of understood that if you think about an airport, you need to get to your flight. There are some people that use the travelators and there are other people that run with their bags. The people that use debt are the ones that are on the travelators and everybody else is running with bags. That is actually really what it comes down to.
Speaker 2:
When you do really sink into this and we are going to take you down to the studs of truly understand the truth of that statement and by the end of this series, you're going to have a really solid sense of the role that debt needs to play in your wealth strategy and, if at all, but also the best way for you to use it personally, because it isn't just everyone should use heaps and heaps of debt. It's really about how much do you want to take on, how much do you want to use this as a tool or as a part of your strategy. And then the second part is how do you use debt as a weapon to beat that inflation, to protect and expand that purchasing power and, importantly, without taking on undue risk, because it is a double-edged sword debt. There is dangers that come with it, but that doesn't mean that you shouldn't use it. There's a risk to not using it as well.
Speaker 2:
So we'll delve into that and if we achieve our aim, you will never look at debt the same way and you will never listen to those conversations about debt and agree. You'll have a more nuanced understanding. You won't, for those categorical views or opinions that completely over simplify this topic and take no time to understand your own situation, just sort of tell you what to do about debt. You should be able to think for yourself when it comes to debt. Always, always, always, always thinking for yourself. That's the whole thing. This whole thing's about. How do you think for yourself, isn't it?
Speaker 1:
100%, and I think like we always get shock responses from the guys in our program when we're working through some of this stuff with them, and so I'm excited to kind of throw this on this platform this channel and we're trialling a new approach with this too, with this series right.
Speaker 2:
Ordinarily, what we've been doing is dripping it out on the same frequency. This is going to be quite different. So you're listening to this episode as a preview right now. You're going to also see that the very next episode in this series is available today, and for the next week to 10 days, everything's going to be dropped out at once. So similar to like a Netflix sort of thing. If you're liking this and you're loving it, you can binge it and you can get to the end result very, very quickly.
Speaker 2:
So we'd love to know your thoughts on this, if you like this format. But we're just going to sort of trial this and see if we can do it this way, because we've got great feedback from the actual series on the podcast, but also we've had people go oh, it's great, but like it takes a long time to get through them. So this is just something we're kind of experimenting with. We'd love your thoughts and feedback on this. If you're a listener and if you're a part of the community, tell us what you think. But yeah, look out over the next seven to 10 days. The rest of this series is all going to be dropped during that time, and so you can finish this episode right now, go straight to the next episode and then look out for the next one the next day. So the most important thing if you want to stay in touch with this series is to make sure that you are subscribed, because then you'll be notified as soon as those new episodes drop.
Speaker 1:
Love it, babe. It sounds like I'm going to drag my mattress into the recording studio. I stood up the coffee machine in the studio and basically we're not leaving for the next week.
Speaker 2:
Pretty much Pretty much I love it. Let's get straight to the first episode. Mate, you can go straight to it. Go back to the podcast player, click play and we'll see you in the next one.