Tuesday, September 6, 2011

Sacred Cow 7 of 11 - Get out of Debt

Get Out of Debt from Rich Dad on Vimeo.

Good Debt? Those two words were never connceted in my mind until I saw this video. I would have to agree with Kim Kiyosaki when she said that DEBT was 4 letter word.

I hate being in debt. In fact when the Bible states that "The borrower becomes slave to the lender", I cannot think of a better way to sum up my thoughts on debt. I have placed myself in a bad situation with student loans and credit card debt becasue of my lack of financial education.

I often hear financial gurus state that people do not understand the power of compound intrest. I think people understand it perfectly. They understand it ... In REVERSE. Debtors understand how to pay intrest rather than have it paid to them. At least that is my experience when I think of credit card payments and student loans.

By selling covered calls I have started to receive payments for renting out my stocks. My goal is to cashflow the stocks and re-invest, in order to create a compounding effect. I guess time will tell how effective my plan is.

One more point that I got from the video was the power of collateral. According to one of the members on the rich dad team, Banks lend money on real estate because there is collatoral or something physical.  I believe that I could use that concept in the future build my own business.

Please leave and comments or question in the comment box below.

Have a Great Day. Let's Eradicate poverty and Build Wealth Through Financial Education.