The Debt To Cash To Wealth Connection



My daughter is taking a high school personal finance course, and debt comes up in conversation almost every day.

Overall, it’s pretty conventional stuff – save for the future, avoid debt, invest for the long term, etc.

While it’s sound advice for most people, I have a nagging feeling that it’s also a prescription for a small, narrow life, rather than an abundant one.

Yes, you can build a conservative portfolio augmented by savings, hold on to it for 40 years, and with some luck it may become a very nice nest egg. But where’s the adventure in that?

Once you realize the powerful and positive connection between debt, cash, and wealth – something I wish I realized three decades ago – your options expand significantly.

Money Is NOT the Root of All Evil

Let’s start with debt.

In many circles it’s considered evil, a source of many grievances in the world.

But think about it for a moment: Has anything great ever been accomplished without debt? After all, debt is the foundation of capitalism and the source of great wealth.

Consider the following:

  • Donald Trump would be a Brooklyn clerk without debt.

  • The railroads never would’ve been built, nor the Erie Canal or the Hoover Dam.

  • America wouldn’t have won World War II.

  • America’s great corporations would’ve stayed small businesses, if they survived at all.

  • And very few Baby Boomers would have ever owned a home.

  • America would be but a shadow of itself.

    Of course, I’m not advocating being reckless or betting the farm on a risky venture. One needs to be reasonable and intelligent, and we should always remain mindful that debt is a tool.

    But as a rule, if you have access to debt – preferably corporate debt – at reasonable rates, then you should load up for property, a great value investment, or a solid business plan. It’s this debt that ultimately leads to cash.

    Print Friendly, PDF & Email

    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

    Share This Post On

    Submit a Comment

    Your email address will not be published. Required fields are marked *