The Value of Debt in Building Wealth

Appendix A

Phi Phound Me

In my other books, I proved debt can be beneficial, but my earlier books' inflexibility for people in the accumulation phase presented a series of new challenges:

• How can you create a flexible, dynamic debt ratio range that moves throughout your life in a responsible way?
• How can the range be customized for different levels of assets and different levels of income?
• How can a dynamic, flexible range be overlaid with some of the greatest theories in finance?
• How can we test results without knowing the future? Most people test using historic data, but the results can be incredibly misleading.
• Could we reverse the test by considering what assumptions you would need to believe to find value in debt?
• Could this process help create an informed discussion composed of a world of unknowns?
• In addition to giving debt mathematical value, can we test the value of debt in reducing stress?
• If it turns out that the theories test well, how could they overlap with behavioral economics and our tendencies as human beings?

As it turns out, all of this was too difficult. Every strategy I derived was too complex or too rigid. I couldn't form a flexible, simple strategy to accommodate people of virtually any level of net worth and income that are still accumulating assets. I was stuck.

Inspiration Arrived

I visited the Museum of Science and Industry in Chicago and saw a fascinating exhibit about math in nature and life. I learned about the sequences and proportions that can ...