Are You Optimistic About Debt? – Episode 545

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, on this episode of the podcast, we’re going to be talking about debt and how it’s an expression of optimism. So if we have any new Dave Ramsey fans, your car just probably exploded on the side of the road. But that’s okay. We’re going to teach you a prosperous way to look at this. So Kim, you have massive amounts of wisdom and prosperous wisdom. Let’s start from there and then we’ll get into the meat of this conversation. Well, I love what you said in that we’re going to teach you a prosperous way to look at it. And so obviously when people usually think about debt, pessimism is the word that would come along with it. And so here we’re saying that debt can be looked at from a position of optimism.

[00:53] And there is so much good that can come from looking at anything from a position of prosperity, a position of just thinking and a position of optimism. And sometimes that can be viewed as just a little bit of Pollyanna-ness or you know, you got rose colored glasses on. Yes, maybe. And which way are you going to get better results by looking at something from a position of optimism or pessimism? And I stand with optimism. It is the way to get better results. So let’s dig in. Perfect. So to give full credit in context, this comes from Jared Dillon. It’s an article that he wrote. He’s an author. It’s kind of strange. So his background is he worked on Wall Street and then he became a writer. And so he writes fiction and nonfiction about finance stuff.

[01:46] So I happen to be one of those nerdy people that like that. And I like to read those types of books. So in his statement here, there’s a couple of things that I wanted to share that I feel are going to be pertinent to us, which is one right here, we’re going through and we’re understanding that debt and comparing ourselves and keeping up with the Joneses is not a good thing. Would you agree with that, Kim? Yeah, I mean, there’s definitely the whole good debt, bad debt thing. And we’re going to be talking about good debt here, which is real estate debt, investment debt, business debt, the capability to leverage opportunities and not always money. Right. Debt can be other things. I’m sure the bulk of it’s monetary debt, but it is absolutely not credit

[02:39] card debt or and I shouldn’t say just not credit card debt because people do put payroll on credit cards sometimes, but it’s not the bad kind of debt that get people into trouble. And yet it could be, I mean, sometimes we have to get ourselves out of trouble no matter what the debt is called. That’s true. And if we look at that debt and what that’s called when we are scared to take out debt often, and this is what Jared States in his article that what happens is we don’t have confidence in the future, so we’re looking at it and saying, I’m not sure if I’m going to be able to pay that off and then the pendulum can swing and it can be too much confidence or maybe we’ll even say blindness of when a person’s going through that.

[03:33] So the next piece that Jared makes, and this was an interesting take that I haven’t read from many people and he goes, and I’ll just read it verbatim. Is that cool with you? Yeah. Okay. The short version of this story is that if you dwell on the myriad of ways in which things will go wrong, you will miss out on a lot of life. I think I know someone that just said that. Okay. Yes. It goes, you will live in a crappy house and buy crappy cars. Not to say that the creature comforts are the raisin. Actually, this is a French word. Raison de tres. Is that how you say it? You did better than I would have. There we go. Of your existence, but material things do bring us happiness. The point that he’s making here is one, if we have confidence in the

[04:25] future, we’re going to A, be using debt and B, smart with our finances. B, if we are using debt, we’re going to have that more positive mindset, the correct debt. So Kim, if we take all of this conversation, pull it in with the emergency fund, pull it in with the opportunity fund, pull it in with how you use life insurance, let’s create some sandwich here. Let’s create something that’s going to be helpful for listeners. Absolutely. Well, I think one of the most important things is somebody’s perspective. And so if you wake up and find yourself in debt, or you need to take on debt to pursue either solving an emergency or taking advantage of opportunity, I mean, it’s why debt and the emergency fund are so

[05:14] tied together, you can get in a position of fear. I have been there. And yet if we, as human beings understand that we’re going to live most of us a very, very long life, and we really should be earning income for a very, very long time. Things like debt, things like our credit score, which usually goes with debt are going to be fluctuating. And it’s interesting. I’ve been taking a poll via a quiz on our website of a lot of our readers and listeners lately. And one of the first questions in this quick five minute quiz is, are you optimistic about your financial future? It’s like 50, 50, 50% of the people. Now this isn’t super studied math. Like I haven’t actually run these numbers, but approximately 50% of

[06:07] the people are saying yes. And 50% of the people are saying no. And my heart really goes out to the people that are not optimistic about their financial future. And the absolute first most important step is to change your thinking because you’ve got to figure out a way to become optimistic about your future and things like debt that are very future oriented, because we’re going to pay that debt off in the future. Things like the ability to get up and go to work every day that are very future oriented are not always easy to be optimistic about. And yet I cannot tell you the difference. And this author states it equally well in how you live your life. If you can view it from a positive perspective and just see the

[06:59] possibilities and sometimes you have to know the possibilities are going to be there before you can see them. So sometimes it’s maybe having faith that the positive possibilities are going to be there or faith that you can work through the problems or the issues that are causing the debt to begin with, because I know this without a shadow of a doubt. And that is my clients that are constantly focused on paying off debt and that’s all they’re focused on just end up continuing to be in debt. Whereas my clients that use debt as a strategy have debt are dealing with sometimes the exact same issues. If they’re focused on where’s my next move, how can I serve? Where can I bring the value that I have to the table?

[07:55] What can I do to create an opportunity? How can I help other people? Then they’re going to get out of that debt. I see it all. I’ve literally seen that for 30 years over and over and over. Yeah. So true. So there’s some depth to this that we’re going to take in that thread. Very helpful because you have the air traffic controller seat, not the pilot seat, because you’re getting to view a myriad of planes and you have the expertise and you’re helping to control versus many of those people in that situation, they’re maybe piloting a small aircraft and they’re like, well, I’m going to get out of debt. And then you’ve got people in a private jet and they’re saying, Hey, I’m looking for this. There’s one other piece to this article that I want to add, because

[08:48] this is the mind shift piece for me, which is this, he goes with the consequences of living above your means. If something goes wrong, our financial hardship, not no fun, but people operate under the assumption that there are no consequences to living below your means, but there are, you miss out on all the good things that life has to offer. When I read that, I thought, Oh, that is perfect. That is the prosperity podcast episode right there, because so many people, we read the books, the millionaire next door, they glorify that simple life, but then we go to the other side and we read books about leveraging everything to the hilt and you find a couple of different sides. So Kim, as our air traffic controller, you’ve seen people go

[09:42] through this, you’ve been able to navigate that. Let’s take all of this information and piece it together. Well, it’s interesting. I was just thinking the other day, well, before I knew what we’re going to talk about, what the definition of prosperity is to me and how I want it out in the marketplace and prosperity is not a life of luxury and laziness. Prosperity is a life of positive possibilities. And so each person and each family has to come to a place where their material desires are handled and a level of income where their material desires, so not just needs, right, but desires are handled. Now that’s clearly different for everybody and it’s probably different for families at different stages in their lives.

[10:46] Nevertheless, if you can get clear in your mind, doesn’t have to be clear financially yet, but if you can get clear in your mind, what’s necessary for the material desires, then this question of, do I live above my means or below my means becomes less relevant because I live at my means and I make sure that my means, my income, create the lifestyle that I desire. But again, it’s not one about luxury and laziness. And I think that’s what so many people think is the cat’s meow. But I literally just had a situation the other day where we were out on a walk and we were in a different neighborhood, we were visiting some people and the person coming down the street stopped to talk to us and we had dogs

[11:47] with our group and so we were kind of led on. And when we got away from the person, somebody else in our group said they’ve been retired too long and so they talked too much. And it was a great example of how oftentimes we think that this life of luxury plus laziness, and yes, I am going to go on record as saying that sometimes retirement is laziness, not for everybody, but for a lot of people, we think, us Americans think that that’s a good end result. We think that that’s what the goal is. And yet I cannot tell you how many times I have seen either a circumstance like that, or a circumstance where a client of mine has retired and I can just see and hear their brain is off. And that is a very, very scary space to be in.

[12:43] And so when you look at prosperity as a life of positive possibilities, and you don’t have luxury plus laziness as a goal, in fact, you might even a shoe that then it’s not material things that are getting your happiness. It’s not not having to work that’s getting your happiness. You’re finding your happiness outside of that, you’re finding your happiness in serving, you’re finding your happiness with joyful things. And that’s different for every person. Some people feel that they have joy in their home and their car and their clothes. Like it’s totally fine to have nice material things, but it’s when it becomes your overt focus. And that’s all that drives your happiness that causes problems.

[13:36] So I love the millionaire next door books. I think those are very, very valuable for some people. And on the other hand, I think it’s very appropriate to, for example, dress very, very nicely for a presentation so that you feel awesome. You look awesome in your mindset and your gift to the people that you’re presenting all get the benefit of that. So neither of these to me is a right or wrong or a black and white. It’s all about you and your family finding the space in the middle that serves you best so that you can go on and serve others best. So good. So good. You know, we’ll, we’ll take that thread of what’s serving the family and individuals best and using that prosperity perspective. And now let’s go full circle and talk about debt

[14:30] and where that works. Because again, if you have lived your life of intention and discipline, which is going to be required to live a prosperous life, now you may be in a situation financially where we’ll say, and I’m using air quotes here, you’ve made it. Okay. In regards to debt, some people may use debt. I’ve seen even close friends of mine. I have a friend that recently sold a business for solid eight figures and it was enough that he was okay. He’s using debt again to stress himself out as the piece that’s going to allow him to operate. Now, does it get the job done? Yes. Could he do it differently if he thought more prosperously? Yes. And then we also look at some people and I have other friends that have sold businesses

[15:32] and then they just kind of go the Buddhist retreat route and that can work too. And I’ve seen other people retire. Yes. And then the brain shuts off. So Cam, we went full circle with this. So let’s take that prosperous thinking, the retirement paradigm, the debt paradigm, all of that. How can you tie us together as we wrap up this episode? Well, to me, it’s about values and purpose. So you use the word intention. I really like the word purpose. It’s about having a purpose for your dollars, about purpose for your time. It’s about purpose for the serving that you’re doing and that alliteration, if you will, like prosperity purpose. So the, the two P’s really are a good reminder for me when I’m just looking

[16:30] at my life. For example, right now, when we’re recording this, it’s at the end of the calendar year. Awesome. That makes us all look at next calendar year. How am I spending my time? I want to be purposeful about my time. How do I, how am I spending my dollars? I want to be purposeful about my dollars. And I want those purposes to be for me and my family. I don’t want them based on anybody else’s perspective or thoughts or opinions. And so when we’re younger, I think this is harder. When we get a little older, we tend to be a little bit more willing to go our own road, if you will. And so when we can get clear on our values, then we can tie the purpose of our money to those values. And that makes such a difference.

[17:21] And so as a family or as an individual, if you want to look up a list of values on the internet, narrow it down to the top five or 10 for yourself and make sure that you’re spending your money in alignment with those values. And that will preclude the off the beaten path that sometimes happens because especially if somebody’s had a liquidity event and they’ve got quite a bit of financial resources, they end up being adrift and they go down this path and they go down that path. And that’s not helpful. It’s not helpful to them as a person. It’s not helpful to the community that they could and should be serving. And oftentimes it’s not helpful to the money. I had a client that literally spent 50 grand in a space of

[18:13] about three months on spa services in Thailand. And it’s exactly what you said it happened. Like they got a bunch of money and they went and blew it all. I mean, spa services, really not even a material thing that you could keep. Okay, you know, if that’s what you want to do and that’s super, super important to you, that’s fine. But I think it’s so important that we be super purposeful about the use of our dollars and how we want to utilize those dollars because dollars are a way to amplify whatever else is going on in our lives. And this is why I think we see people with liquidity events, whether it’s inheritance or the sale of a business, sometimes be adrift for a while. They don’t really know where to

[19:08] go. They don’t know how to spend their time. They don’t know how to serve. And so this is when I bring in my sister, Tammy Brannon, to do her blueprint process. Or I encourage people to look at their Colby profile or take some time. Like don’t spend any money for a little while. Take some time and figure out how you can best exist in this world in a very purposeful way so that you’re not adrift. I love it. This is so good. Kim, thank you for sharing this and helping people understand this prosperous way of looking at it. Now we go full circle. We’ve been able to look at the debt and the expression of optimism of that, the prosperous way of thinking. For any listeners, I would say that one of the most difficult

[20:00] times, and this sounds strange, but one of the most difficult times is when you have had a liquidity event and it’s not like the phrase, well, first world problems. No, it is one of those things. It’s difficult because you can’t talk with most people about it. So if you’ve had something like that, meaning sold a business, had an inheritance, you’ve, whatever it may be, there’s, you know, sold a rental property or whatever you’ve done and you feel like you’re treading water or this event is coming up and you’re saying, what do I do? I encourage you to reach out to that air traffic controller type of person, send an email to hello at prosperitythinkers.com. I know for me, when I sold my first company and had a

[20:54] liquidity event, I was lost for about five weeks. Yeah. It was awful. I moved to Hawaii with my best friend and surfed every day. I lasted five weeks and I’m like, I cannot do this. I have to come back. And luckily that was only five weeks, but I wish that it would have been a week that would have been better. So for all listeners, please send that email to hello at prosperitythinkers.com. Thank you for listening to the prosperity podcast to take control of your money and have it work for you. Visit prosperitythinkers.com.