The thing is, much of that debt may be counterintuitively what accumulates wealth.
For example…Paying $2,000 a month for a mortgage in a hot real estate market will include principal and interest, but the principal will be recouped when the property is sold, and the increase in the house value over time can significantly offset or even exceed the interest value.
On the other hand, rent paid to a landlord just goes into a black hole with no longer term benefit. It’s not considered debt, but it leaves the renter worse off (often).
I guess what I’m saying is, it feels good to not have debt, but refusing to incur debt when it helps long-term can actually make you poorer.
Now, when you’re poor, you don’t have a choice to live on rent and paycheck-to-paycheck, which is why this is another terrible “rich get richer” problem.
As someone in poverty but who generally doesn’t owe any debts other than some relatively small/cheap student loans…
The thing is, much of that debt may be counterintuitively what accumulates wealth.
For example…Paying $2,000 a month for a mortgage in a hot real estate market will include principal and interest, but the principal will be recouped when the property is sold, and the increase in the house value over time can significantly offset or even exceed the interest value.
On the other hand, rent paid to a landlord just goes into a black hole with no longer term benefit. It’s not considered debt, but it leaves the renter worse off (often).
I guess what I’m saying is, it feels good to not have debt, but refusing to incur debt when it helps long-term can actually make you poorer.
Now, when you’re poor, you don’t have a choice to live on rent and paycheck-to-paycheck, which is why this is another terrible “rich get richer” problem.