Babies Don’t Have Debt
Talk With The Video
Summary
- Many adults are in debt, but babies aren't, which technically makes them richer.
- In the U.S., 35% of each paycheck often goes to paying off debt.
- Many people don't realize their mortgage, car payment, and credit card balances as forms of debt.
- People aim for 9-10% returns in the stock market but overlook the 24% interest on their credit cards.
- Credit card interest is a guaranteed cost against building wealth.
- To become wealthier, prioritize paying off high-interest debts like credit cards.
Video
How To Take Action
I would suggest starting by taking a good look at any high-interest debt you have, like credit cards. These are usually the biggest money drains because of the crazy high interest rates. Before dreaming about stock market gains, focus on paying these off. It's like plugging the leak in a sinking ship.
A good way of doing this is by listing all your debts, from highest interest rate to lowest. Start focusing all extra cash on the one with the highest rate first. It’s called the "avalanche method."
Next, be aware of all forms of debt you have. Not just credit cards but also things like your mortgage and car payments. Knowing these can help you manage payments better and plan to get rid of them faster.
Also, consider your spending habits. Avoid buying things on credit unless you can pay them off quickly. This means learning to budget and sticking to it. Sometimes even simple changes—like making coffee at home instead of buying it on the way to work—can add up to significant savings.
Finally, remember that banks make their money off people who don't manage their debt wisely, so don't be one of those people. By focusing on reducing debt, you're guaranteeing yourself a path to building real wealth, much like keeping the deck clean before stacking more cards on it.
