What do personal debts and cancer have in common?
Few people in their prime of life worry about cancer.
Eleven months ago, when I was diagnosed with bone cancer, I could count myself as one of those “head in the sand” sorts. Sure, sometimes you can eat as healthily as you want, exercise well, sleep plenty, but still get kicked in the ass by mother-nature’s evil doppelganger. Maybe that was me—a guy who never should have had 3 ribs removed, along with a robust chunk of his spine and lung lining.
I ate well. I lived well.
But there were plenty of things I could have been doing differently. Modern research suggests that most of us are poorly nourished, and we happily gorge on carcinogenic products, instead of protecting ourselves. That’s one of the reasons cancer is on the rise for young people.
Don’t think, “It won’t happen to me.” Instead, validate a reason for it not to happen to you—and act on that. If you’re a living, breathing human being, read this book before delving into anything else:
I’m serious about that. If you haven’t read it, order it today.
But how is debt like cancer?
Debt is one of those things people rarely think about when they’re young. There’s no such thing as a “good cancer” and there’s really no such thing as “good debt” either.
Who thinks there’s such a thing as good debt? Those who are smart and lucky—and those who are seriously inexperienced.
If we were all fortunate enough to live 200 years, few people would talk about “good debt”.
During economic prosperity, with low interest rates, many people talk about debt (on “appreciating assets”) as something good. It isn’t. When interest rates rise (and they always, eventually do) those leveraging to buy investment assets get hammered harder than a vintage Mike Tyson haymaker to the chin.
If I wrote this a few years ago, most Americans would be shaking their heads. “No way,” they’d say, “leverage is good.” But few of them are saying that today as house prices continue to plunge in the U.S., and interest rates threaten to creep upwards.
Who thinks debt is good today? Rookie Australians, mostly.
Lulled into a fallacy of house prices rising forever, Australians are leveraging themselves to the hilt, suggesting that it’s OK, thanks to their Canadian-esque tax breaks on loaned money for investment purposes.
Most of them will eventually pay heavily for that. Debt is bad.
When inflation does rear its ugly head (don’t suggest that high inflation will never come again) people who owe money on assets and liabilities will see those payments soar. If they can’t service those payments, they’ll be forced to sell. We all know what that will do to the economy.
Some people suggest that it’s better to invest money while their mortgage interest rates are low, instead of paying down their housing debt.
If given 12 hours to summit a mountain before nightfall, those same people would dilly dally around on the lower slopes with a daypack, only to start huffing it against daylight once a massive pack gets dropped on their shoulders.
Insane? I think so. Make up ground when the going is good. With low interest rates (a light daypack) you can ascend quickly before eventually getting hit with higher mortgage rates. Get up that hill as fast as you can—and don’t look around. Low interest rates are great for paying off your house.
Call me a wimp, but I no longer eat red meat, non organic spinach, sweet processed food of any kind, and I take a daily bath in organic green tea.
And if I owed money on a house—or on anything else—I wouldn’t invest a penny. I’d be paying that down as aggressively as I could.
There’s no such thing as good debt—or good cancer. So if you haven’t done it already, avoid the distractions of sugary foods, gold, stocks, and rapidly rising real estate….until you’re 100% debt free.
You’ll sleep better at night if you’re giving yourself the best fighting chance you can.