One of the hardest jobs we have at Empowered Investor is convincing people that debt is not only okay but a critical component of the process that can make you very wealthy. Debt is how you leverage money into making it work for you many times over.
Much of the population, especially if you have parents or grandparents who lived through the Great Depression of the 1930s, have a mental knee jerk reaction against the concept of purposefully acquiring debt as a path to wealth. It was beaten into our heads through rote repetition that debt was a thing to be avoided. We should save for a rainy day. On a side note, the current answer to the ‘rainy day’ phrase seems to be, “But what if it never rains and I’m stuck with all that money?” Could explain American society’s rampant consumer debt problem.
But that is a digression.
Rooting your financial beliefs in events nearly 80 years in the rear view mirror makes no sense. The game has changed in fundamental ways. We were on the gold standard back then. We didn’t have runaway inflation. Today requires a different strategy to get ahead, one that requires the prudent use of debt. If we have an overall depression like we had all those decades ago, it’s going to be lights out for everyone. Rainy day savings or not, we’re all going to be scrambling for pennies.
