* Debt can be disastrous for your finances.

* It can increase risk which can cause stress and worry in your life.

* Minimizing and eliminating debt can create more monthly cash flow and therefore financial freedom.

* Create a plan to minimize debt by clearly identifying your debt.

* Create a monthly budget to see opportunities for cutting expenses and figuring out how much debt you can pay off each month.

* A wealth builder does not use debt or uses debt to at a bare minimum.

* As a wealth builder, your end goal should be to become someone who is collecting interest not paying interest.

When most people hear the word debt the first thing they think of is something that is probably negative. Maybe it’s just me, but when I hear the word debt the feelings that I get are similar to those feelings that I get when I hear my dentist tell me I have a cavity, or the feeling I get when I’m washing my car and notice I have a door ding. These feelings don’t feel good and could be considered a little painful. However, I can’t be too negative towards debt because there have been times throughout my life that I’ve used debt for something that was good. For example, when I was young there would have been almost no way for me to buy a car without the help from my dad. Through the financial help from my dad I was able to get a vehicle, which allowed me to get to a job, which allowed me to make money. Had the vehicle not been in place, the job wouldn’t have been either. Not that it was impossible to get a job without getting a car, it’s just that riding a bike an hour each way to and from the job would have taken a level of ambition that was way greater than where my 16 year-old self was at. I’m sure that many people have found themselves in the situation of needing a loan to buy a car. So, it’s easy to see how debt can be helpful. In another example of debt used in a good way was when I decided to build a house at the age of 26. There was no way I had enough money to even come close to completing the house with the savings that I had at the time. However, there was a bank that, surprisingly enough, was willing to give me a construction loan to build the house. Through this example we can see that debt gives people the ability to buy a home. This can be a good thing!

But, we all know there are always two sides to every coin. So, what are the reasons you wouldn’t want debt? One reason that you don’t want debt is because debt can be dangerous. I’ve seen time and time again people that take on too much debt and before they know it they’re struggling to keep up with all of the loan payments. They find themselves trying to work more hours, in order to make more money so they can stay afloat financially. They live worried lives, constantly stressed out because they don’t know if they’re going to be able to make all their payments. They live in fear of the phone ringing with the debt collector on the other end asking for their money. Taking on too much debt can be disastrous for your health, wealth, and happiness. The stress that debt can put into your life can cause your health and happiness to deteriorate.

The reason debt can be dangerous is because it increases financial risk. Let’s examine what financial risk can look like. This example is something that I’ve seen others experience in my life and I’m sure you’ve either heard of something like this happening or maybe even know someone this example has happened to. For this example I’m going to tell you a story about a guy nam...