Do you have to be debt-free before you invest?
Life is all about choices, there are people lots of people that invest while they’re in debt but the truth is most of these people down the road wind up making little to no profit from their investments because their debts wind up sucking up their profits as well as their TIME!!!.
A writer I have a lot of respect and admiration for Robert Kiyosaki when asked
Q: Do you have to be debt-free before you invest?
Answered with the following:
A: No. This is your choice. We had quite a bit of debt when we started investing…
The truth is he’s absolutely right but let’s break down where Robert Kiyosaki for a second. Robert Kiyosaki is a best selling author who to this very day is making an additional income from selling his books and educational board games.
I’m sure Robert Kiyosaki makes money from Real estate however again selling books and boardgames don’t incur the same amount of COSTS, LIABILITIES, RISKS real estate or stock investing does.
Investing in real estate is risky, being at the mercy of a bank or a financial institution is risky, the only time real estate isn’t risky is when you have enough saved in the bank to cover any loan you’ve taken out.
Being in Debt is Stressful
Regardless of how you view fiat money, the bottomline is money has control over our lives and in my personal opinion it’s never a good idea to be in debt.
Robert Kiyosaki doesn’t have kids, try to remember that, for those of you with kids being in debt could mean a lot of stress for you and your family and the truth is you can’t control what happens in government, government can raise interest rates, government could lower interest rates, government can enact laws that hurt investments and if you’re in DEBT when this happens and your investments get hurt and you can get screwed in multiple ways.
Most of the SELF MADE rich people I know hate debt, most of the rich people I know LIVE BELOW THEIR MEANS, most of the rich people I know don’t touch their principal meaning if they’ve made a Million dollars they don’t spend the million dollars instead they spend and INVEST what they make from interest and/or dividends Furthermore most of the rich people I know SAVE MONEY or they have some money saved somewhere.
The government wants to keep us in debt
Governments worldwide prefer their citizens in debt, it’s one of the reasons we have a fiat based monetary system and one of the reasons financial education isn’t taught in schools. People in debt rarely ever get out, people in debt don’t think properly, people in debt don’t value money, people in debt usually will find a way to get deeper in debt, people in debt rarely make any demands to the government and most importantly people in debt PAY THE MOST TAXES!
Robert Kiyosaki is right when it comes to financial education, but financial education can’t control the markets, even Donald Trump almost went bankrupt at one time. Why? Because he got into too much debt and when he did this the real estate market crashed! Donald Trump is a billionaire with an abundance of financial education and even he almost went down in REAL ESTATE. What saved Donald Trump wasn’t his financial education, what saved Donald Trump at that time was he was TOO BIG TOO FAIL. If you as an investor in debt invests in a property and the housing market shifts to your detriment and you’re already in debt chances are nobody is going to bail you out of that mess, and if you’re not selling any books to make up for the short fall you could find yourself drowning in debt as well as drowning in stress.
Should you be debt-free before you invest?
Personally if I were you I would get out of debt and develop the habit of savings before investing.
When you save your own money you’ll develop a new respect for money, you’ll fight to protect it, you’ll make wiser investment decisions and if you’re smart you’ll invest only a portion of your savings or the interest of your savings instead of risking all of it on one thing. The government wants you to be in debt, try not to get caught in that trap, the rich keep getting richer because more and more people and businesses keep getting into debt. Remember that in order to be rich or wealthy financially YOU CAN’T BE IN DEBT!