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Inner Game

Rethinking Debt (P.S. You're a Slave)

ballandchainSometimes the truth can hurt, but let’s cut right to the chase: If your personal balance sheet includes any significant amount of debt, then there’s a very good chance that some (if not most) aspects of your life are being held hostage by your lenders.

We here at Real Estate Mogul don’t want to ignore this tragic reality in modern American finance, and we don’t like to see our fellow real estate investors suffer under the unforgiving burden of cumbersome debt obligations.  We want to promote the pure financial flexibility which attracts many people to real estate investing in the first place, including rich options for satisfying lifestyles and general peace of mind.

To that end, we continue our ongoing investigation of financial freedom with (i) a reminder of the benefits provided by a healthy personal balance sheet, (ii) a contextualized “know-your-enemy” analysis of personal debt and (iii) our latest in-depth interview with debt-free investing veteran Shaun McCloskey.

fight-clubYour financial freedom is worth fighting for!

Financial freedom is not a matter of esoteric arithmetic or smug smiles at your local ATM.  No, it’s all about your lifestyle and your ability to explore options for a more satisfying existence during your time on this planet.

For example, investors who possess a healthy amount of financial freedom enjoy a relatively wider variety of lifestyle options regarding:

  • When and where to work
  • When and where to go on vacation
  • The quality of time spent with loved ones
  • Which routines to incorporate into (or eliminate from) their lives
  • Which financial risks to embrace (or forego)
  • The ability to pursue new business ideas and entrepreneurial projects
  • And many more!  (Far too many to list here...)

These are real options that real people can enjoy throughout their lives.  (Yes, it really is possible!)  But it takes a savvy battleplan to achieve this sort of flexibility, and one of the first steps is knowing your enemy…

mrs-robinsonYour financial freedom is threatened by a sultry seductress – debt.

The average American investor begins his tragic love affair with debt before he ever graduates from high school, temporarily enjoying various combinations of student loans and/or credit cards in an unfortunate exchange of long-term financial freedom for near-term personal autonomy.

And although real pleasure can be found in attending “the university of your dreams” or following Coldplay on their latest Midwestern tour, the debtor soon discovers that his immediately gratifying pleasures fade much more quickly than his lender’s ongoing demands for repayment.

The once-whimsical soundtrack of his life becomes mixed with an unyielding siren song of monthly interest payments. His once-joyful autonomy grows increasingly haunted by ominous letters from the bank.

By age thirty, many investors have painted themselves into a corner through a variety of debt obligations, ranging from several years to several decades in maturity:

  • Student Loans (10-30 Years)
  • Car Loan (3-7 Years)
  • Mortgage (15-40 Years)
  • Credit Card Debt (Perpetual)
  • Etc…

With so many lenders demanding so much money over such a long period of time, an overburdened debtor soon finds himself unable to explore any of the satisfying lifestyle options mentioned above.  Who determines when and where he should work?  The lender!  Who determines when and where he should take his family on a much-needed vacation?  The lender!  And what about that brilliant business idea he wanted to pursue?  (You get the idea…)

brainTo win the battle for financial freedom, investors need a new mindset.

We here at Real Estate Mogul want to break this cycle of counterproductive indebtedness which ultimately destroys the very financial freedom it promises to provide.  And we know that catalyzing a flexible personal balance sheet begins with establishing a healthy mindset – including a correct understanding of the fundamental concepts most investors tend to overlook in their hasty search for immediate gratification.

To that end, it is our sheer delight to rejoin mindset maven Shaun McCloskey in the second installment of his multi-part campaign for widespread financial freedom.

Click here for Shaun’s first lesson – “What a Mortgage Really Is (and Why You Should Rethink It)”.

In today’s lesson, this debt-free investing veteran explains the real definition of “freedom” while offering a few more ideas for debt-free investing (and debt-free living).

Shaun McCloskey continues to put everything in perspective…

{Mogul Elite: Download a transcript and MP3 of this video in the Power Pack tools for this lesson.}


Do It To It! Immediate Action Steps

Understand – Understand that you cannot enjoy financial freedom if you place your future in the hands of a lender.

Decide – Decide that you are going to become a debt-free investor – even if the road to financial freedom appears long and arduous.

Consider – Consider the ways that your overall quality of life may or may NOT depend on (i) your income, (ii) your debts and (iii) your standard of living.

Consider – Consider the important differences between a rich bank account and a rich lifestyle.

Invest in Yourself – Use your disposable income to purchase long-term freedom and flexibility for yourself.

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