Value of Debt in Building Wealth - Creating Your Glide Path to a Healthy Financial L.i.f.e.

The book of financial wisdom that your future self will thank you for reading
 
For many adults under 40, 'debt' is a four-letter word--something that should be avoided but is all too often unavoidable. In The Value of Debt in Building Wealth, bestselling author Thomas J. Anderson encourages you to rethink that. You'll walk away from this book with an understanding of how you can use debt wisely to secure the financial future you envision for yourself and your family. Student loans, mortgages, lines of credit, and other forms of debt are all discussed in detail, with a focus on smart planning for those who are accumulating assets--and debt--now.
 
Should you rent or buy? How important is liquidity? What is good versus bad debt? How much debt should you have? What debt-to-income and debt-to-asset ratios should you aim for? Fixed debt or floating debt? What's the best way of saving for college and retirement? These are big questions that deserve thorough answers because the choices you make now could influence the course of your life. This thought-provoking book will open your eyes to savvy financial strategies for achieving your goals faster and with healthier bank accounts.
* Explore strategies for smart debt management, explained by one of the nation's top financial advisors
* Gain an understanding of investment basics and key financial concepts you'll need to achieve your long-term goals
* Understand the risks of having debt and the potential risks of being debt-free
* Make financial decisions now that will maximize your wealth, freedom, and opportunity later
 
This book is not about buying things you cannot afford. It is about liquidity, flexibility and optimizing your personal balance sheet. The Value of Debt in Building Wealth is full of ideas you can apply to your own situation--no matter what your current asset level. Read this book today and thank yourself later.

List of contents

Foreword xi
 
Acknowledgments xv
 
About the Author xix
 
Introduction xxiii
 
Chapter 1: The Traditional Glide Path 1
 
In a Perfect World, No Debt! But Our World Isn't Perfect 2
 
You Owe a Debt to Your Future Self 3
 
Break the Paycheck-to-Paycheck Cycle 4
 
Companies Embrace Balance 5
 
The Power of Savings 6
 
A New Glide Path: Debt Adds Value 8
 
Finding Your Glide Path 11
 
The Need for Specific, Actionable Advice 12
 
Endnotes 14
 
Chapter 2: Foundational Facts 17
 
All Debt Is Not Equal: Oppressive, Working, and Enriching Debt 18
 
Paying Down Debt Gives You a Return Equal to Your After-Tax Cost of That Debt 20
 
Sh*t Happens--Value Liquidity 20
 
Yes, You Can--Save 24
 
Compounding Matters--For the Upside and the Downside 26
 
The Past Is the Past; Focus on the Future 29
 
Behavioral Economics Matters 30
 
Endnotes 31
 
Chapter 3: A Balanced Path to L.I.F.E. 33
 
Phase 1: Launch! 37
 
Phase 2: Independence 51
 
Endnotes 62
 
Chapter 4: Freedom and Equilibrium 65
 
Phase 3: Freedom 66
 
Phase 4: Equilibrium 76
 
Bonus Phase: No Debt! 80
 
Endnotes 82
 
Chapter 5: The Other Side of the Balance Sheet 85
 
The Probability of an 8 Percent Rate of Return Is Zero 86
 
Risk, Return, and Diversification 87
 
What about Interest Rates and Cost of Debt? 95
 
What about One of Your Biggest Assets? Your House 97
 
Three Buckets of Money 99
 
Risk Matters--The Risk of Time 105
 
Factoring Leverage into Returns 107
 
Debt as an Integrated Part of Your Investment Philosophy 109
 
Endnotes 110
 
Chapter 6: Proof of the Value of Debt 113
 
The Big Picture--Debt Can Be Valuable 115
 
Children and College Savings 127
 
Interest Rates and Debt Service CoverageRatios 128
 
Endnotes 128
 
Chapter 7: Conclusion 131
 
Taking a Stand Against Conventional Wisdom 132
 
Endnotes 137
 
Appendix A: Phi Phound Me 139
 
Inspiration Arrived 140
 
Not Perfect Makes Perfect 142
 
Applying the Fibonacci Sequence 142
 
From 13 to 8 148
 
From 8 to 5 150
 
Super Cool Math 151
 
Endnotes 154
 
Appendix B: Understanding the Power of Securities-Based Lending 155
 
Case Study 156
 
The Power of Securities-Based Lending 159
 
First Bank of Mom and Dad 162
 
Endnotes 163
 
Appendix C: Home Purchase and Financing Considerations 165
 
Don't Rush to Buy a House 166
 
When Home Ownership Can Go Wrong 168
 
Save Yourself the Anguish 169
 
Be Careful! 170
 
All Mortgages Are Not Created Equal 171
 
Owning Can Be Great 175
 
Endnotes 176
 
Appendix D: The Millennial's Guide to Debt and Getting Started 179
 
Saddled by Student Loans 180
 
The Best Budget: Spend Less Than You Make 182
 
Debt-to-Income Ratios 185
 
Pulling These Concepts Together 188
 
Endnotes 188
 
Appendix E: The Math Behind the Examples 191
 
Chapter 1: The Nadas, Steadys, and Radicals 193
 
Chapters 3 and 4: Brandon and Teresa 199
 
Higher Income 210
 
Endnotes 216
 
Glossary 219
 
Resource Guide 225
 
Bibliography 231
 
Suggested Reading 233
 
Index 235

About the author

THOMAS J. ANDERSON is founder and CEO of Supernova Companies, a financial technology company providing a comprehensive platform focused on managing both sides of an individual's balance sheet. A nationally renowned financial planning expert, he is author of The Value of Debt, which made the bestseller list at The New York Times and USA Today.

Product details

• Authors: Thomas J Anderson, Thomas J. Anderson, Anderson Thomas J.
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 07.04.2017
• EAN: 9781119049296
• ISBN: 978-1-119-04929-6
• No. of pages: 272
• Subjects: Social sciences, law, business > Business > Business administration; Personal finance, Finanzwesen, Private Finanzplanung, Allg. Finanz- u. Anlagewesen, Finance & Investments, Finanz- u. Anlagewesen, Personal Finance / Financial Advising, Private Finanzen / Beratung