The number one reason to be debt free is to free the most important wealth building tool you have, your income. The average person pays over $600,000 in interest over the course of their lifetime. If you freed yourself of the debt you have incurred and live a debt free life, that $600,000 could go into your bank account as opposed to your creditors.
People fail to consider the risk of having debt. They’re too worried about keeping up with the Jones and need to have to have the latest car, clothes, television, etc. “I’ll just finance it,” they say. Before they know it they’ve financed a home with a mortgage balance of $240,000, a car with a loan balance of $30,700 (two thirds of American households have 2 cars), 4 credit cards with a combined balance of $10,600, and an education with a student loan balance of $20,000. If you think this is extreme, this is the average American!
If your debt grows too large you can’t manage to pay your creditors, you won’t be able to keep the electricity on, you won’t be able to put food on the table, perhaps worse, you could lose your home.
Unfortunately, too many people are under a mountain of debt right now. These people are struggling for a way out and are mentally weighed down, being harassed by creditors and collection agencies or worrying that their houses may be taken from them.
Have you ever heard of car being repossessed that didn’t have a car loan? Have you ever heard of a house being foreclosed on that didn’t have a mortgage? I’m guessing no. Free your mind from the stress of debt and free your income to build wealth.