The Value of Debt in Building Wealth

Book description

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.

Table of contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Dedication
  5. Foreword
  6. Acknowledgments
  7. About the Author
    1. About Supernova Companies
  8. Introduction
    1. Endnotes
  9. 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
    7. Finding Your Glide Path
    8. The Need for Specific, Actionable Advice
    9. Endnotes
  10. Chapter 2: Foundational Facts
    1. All Debt Is Not Equal: Oppressive, Working, and Enriching Debt
    2. Paying Down Debt Gives You a Return Equal to Your After-Tax Cost of That Debt
    3. Sh*t Happens—Value Liquidity
    4. Yes, You Can—Save
    5. Compounding Matters—For the Upside and the Downside
    6. The Past Is the Past; Focus on the Future
    7. Behavioral Economics Matters
    8. Endnotes
  11. Chapter 3: A Balanced Path to L.I.F.E
    1. Phase 1: Launch!
    2. Phase 2: Independence
    3. Endnotes
  12. Chapter 4: Freedom and Equilibrium
    1. Phase 3: Freedom
    2. Phase 4: Equilibrium
    3. Bonus Phase: No Debt!
    4. Endnotes
  13. Chapter 5: The Other Side of the Balance Sheet
    1. The Probability of an 8 Percent Rate of Return Is Zero
    2. Risk, Return, and Diversification
    3. What about Interest Rates and Cost of Debt?
    4. What about One of Your Biggest Assets? Your House
    5. Three Buckets of Money
    6. Risk Matters—The Risk of Time
    7. Factoring Leverage into Returns
    8. Debt as an Integrated Part of Your Investment Philosophy
    9. Endnotes
  14. Chapter 6: Proof of the Value of Debt
    1. The Big Picture—Debt Can Be Valuable
    2. Children and College Savings
    3. Interest Rates and Debt Service Coverage Ratios
    4. Endnotes
  15. Chapter 7: Conclusion
    1. Taking a Stand Against Conventional Wisdom
    2. Endnotes
  16. Appendix A: Phi Phound Me
    1. Inspiration Arrived
    2. Not Perfect Makes Perfect
    3. Applying the Fibonacci Sequence
    4. From 13 to 8
    5. From 8 to 5
    6. Super Cool Math
    7. Endnotes
  17. Appendix B: Understanding the Power of Securities-Based Lending
    1. Case Study
    2. The Power of Securities-Based Lending
    3. First Bank of Mom and Dad
    4. Endnotes
  18. Appendix C: Home Purchase and Financing Considerations
    1. Don't Rush to Buy a House
    2. When Home Ownership Can Go Wrong
    3. Save Yourself the Anguish
    4. Be Careful!
    5. All Mortgages Are Not Created Equal
    6. Owning Can Be Great
    7. Endnotes
  19. Appendix D: The Millennial's Guide to Debt and Getting Started
    1. Saddled by Student Loans
    2. The Best Budget: Spend Less Than You Make
    3. Debt-to-Income Ratios
    4. Pulling These Concepts Together
    5. Endnotes
  20. Appendix E: The Math Behind the Examples
    1. Chapter 1: The Nadas, Steadys, and Radicals
    2. Chapters 3 and 4: Brandon and Teresa
    3. Higher Income
    4. Endnotes
  21. Glossary
  22. Resource Guide
    1. Basic Information
    2. Inflation, Interest Rates, and Compound Interest
    3. Housing
    4. Introduction to Stocks and Bonds
    5. Investment Vehicles
    6. Credit Score
    7. Calculators
    8. Endnotes
  23. Bibliography
    1. Books
    2. Text Books
    3. Nobel Prize–Winning Theories
    4. Articles
  24. Suggested Reading
    1. Endnotes
  25. Index
  26. End User License Agreement

Product information

  • Title: The Value of Debt in Building Wealth
  • Author(s): Thomas J. Anderson
  • Release date: February 2017
  • Publisher(s): Wiley
  • ISBN: 9781119049296