Be Debt Free Info

What Do Rich People Do?

I have found that if you look into the lives of the kind of people you want to be like, you will find common themes. If you want to be skinny, study skinny people. If you want to be rich, do what lots of rich people do, not what some myth-sayer says to do.

The Forbes 400 is a list of the richest 400 people in America as rated by Forbes magazine. When surveyed, 75% of the Forbes 400 (rich people, not your broke brother-in-law with an opinion) said the best way to build wealth is to become and stay debt-free. Walgreen's, Cisco, Microsoft, and Harley-Davidson are run debt-free.

I have met with thousands of millionaires in my years as a financial counselor, and I have never met one who said he made it all with Discover card bonus points. They all lived on less than they made and spent only when they had cash. No payments.

History of Debt

History also teaches us that debt wasn't always a way of life. In fact, three of the biggest lenders today were founded by people who hated debt. Sears now makes more money on credit than on the sale of merchandise. They are not a store; they are a lender with some stuff out front. However, in 1910 the Sears catalog stated, "Buying on Credit is Folly." J. C. Penney department stores make millions annually on their plastic, but their founder was nicknamed James "Cash" Penney because he detested the use of debt.

Henry Ford thought debt was a lazy man's method to purchase items, and his philosophy was so ingrained in Ford Motor Company that Ford didn't offer financing until  10 years after General Motors did. Now, of course, Ford Motor credit is one of the most profitable of Ford Motor's operations. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt.

The Debt Myth

You have probably heard a lot of the sub-myths which fall in line behind the big one that says, "Debt is a tool." Are you beginning to understand that debt is NOT a tool? This myth and all its little sub-myths have been spread far and wide. Always keep in mind the idea that if you tell a lie often enough, loud enough, and long enough, the myth becomes accepted as a fact. Repetition, volume and longevity will twist and turn a myth - a lie - into a commonly accepted way of doing things.

No more. Debt is not a tool; it is a method to make banks wealthy, not you. The borrower is truly servant to the lender. Your largest wealth-building asset is your income. When you tie up your income, you lose. When you invest your income, you become wealthy and can do anything you want.

How much could you give, save, and spend every month if you had no payments? Your income is your greatest wealth-building tool, not debt. Your Total Money Makeover begins with a permanently changed view of the debt myths.

Are You New to Dave Ramsey? Get started here!