Being a good saver is a bad attitude!!

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I had lunch today with a great guy. Been “investing” for over ten years. He is in a “good” position but because he is a good saver he is not becoming a good investor.
After ten years of investing he has about 3 million dollars worth of property and he has been paying down mortgages as fast as he can, so today he only has about 1 million dollars worth of debt.

He asked to see me because his ten years of investing haven’t enabled him to retire, and he read on my website that I retired in under a year.

His problem has been that he has been a saver, not an investor. Using tax paid money to write down debt whilst achieveing no leverage is well, frankly… dumb.

After 3 hours with me he realises that now. He kicked himself all the way out to his car. He could have had 20 million dollars worth of property and be properly retired by “leveraging” his equity and building significant wealth.

That somebody so savvy and smart as this guy would penalise himself inadvertanty so much made me think that maybe some of you are doing the same thing.

If your focus is on getting out of debt, you are in the wrong game baby. Understand debt, know what good and bad debt is. Then get as much good debt as you can and then allow the property cycle to deliver the growth to enable you to get out of debt later when you need it. Every tax paid dollar used to write down debt, as oppposed to using it to invest further, is like saying you’d rather get 60 cents for your dollar instead of a dollar fifty, it’s just nuts.

Now it would take more than a blog to explain why this is so important. So if you have no idea what I am on about then go and look at some of my earlier video blogs and get yourself educated about good debt and leverage.

Without understanding this, you will beat your head against a brick wall forever.

Like my new friend, if you were offered a 3 milion dollar portfolio with 1 million dollars debt, many of you would jump at it, and it’s no tlike it’s a bad thing. But as my friend discovered, it isn’t enough to give you real freedom. In ten years you will be worth 6 million but may still have to work. However a ten million dollar portfolio with 6 or even 8 million dollars debt, now that’s smart investing.
In ten years you are worth 20 million and can sell down half your portfolio if you chose, create massive cashflow for the rest of your life and still be worth ten million!!