In this video, I want to talk to you guys about how to eliminate that horrible thing we call bad debt. Bad debt is money you borrow at a high interest rate to buy things that aren’t an investment in your future. You really have to focus on paying off this bad debt before you can begin investing.

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12 COMMENTS

  1. I recently listened to your podcast on horsehead holdings. Would you say that if the company's moat is a price moat, then the company taking on debt is basically lowering the drawbridge on their price moat?

  2. Phil I'm not sure if this is where to leave comments but I have a question on debt vs. investing. I'm currently investing at a 51% for the year but have a larger amount in credit card debt than I am currently investing. Would it make sense to pull my money out of my investments and pay off all my credit cards even though my investment interest rate is higher than my credit card interest rate.

  3. I heard that you can pay off debt faster if you switch your previous debt accounts to a single special introductory credit with zero percent APR for x' amount of months, than if you just keep your debt accounts on those high APR standards. That's what I am thinking about for my credit cards.

  4. Snowball effect is what my wife and I are using currently. List all the bad debt from highest balance to lowest balance. Pay the minimum payment on the higher balances regardless of the interest. Pay off the smaller bad debt first and once the small debts are paid off, we apply the payment we were giving for the smaller bad debt to the next bad debt on the list. This creates small wins to keep you motivated to pay off the bad debt opposed to feeling that you will never finish paying the large bad debt.

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