Is it possible to have Debt and be Financially Free?
Yes, it is. It is possible in about in the same way, as it is possible to be a fitness freak, and also smoke a pack of cigarettes everyday (and believe it or not, that is possible too)!
If you haven’t figured this out yet, I’m really not a fan of debt. There are some exceptions, but most of the debt people make are counter productive to financial freedom, in the same way that smoking cigarettes are counter productive to being healthy.
Now that I’ve got that off my chest, I’ll explain why it is technically possible to have debt, and also be financially free.
When you make a loan, that loan has an expense associated with it. The expense is the interest you have to pay on the loan.
Being financially free means you are earning enough income from “passive” income sources (like dividends on shares you own), to pay all your expenses, for the rest of your life.
Since interest is just another expense, if your passive income is enough to pay the interest on your loans, and all your other expenses, for the rest of your life, then you are still financially free.
So… possible? Yes. Advisable? No.
In case you’re also wondering, I found that funny photo here. Kudos to Will!! I hope it really was his last cigarette!!
August 7th, 2008 at 02:40 am
I was a bit concerned about the picture until I read your last line! I thought it was you for a second!
August 7th, 2008 at 02:07 am
@Sharon
Hehehehehe…
Well sometimes I “forget” to shave for three weeks a row, and then I do look a little bit like him!!
August 7th, 2008 at 04:54 am
24 DAYS with no cigarettes. i saw my brother tonight. my dad turned 62 today so we traveled to see him and my brother told me i look better.
August 7th, 2008 at 06:23 am
@Sharon – That is tooooo funny!!!!!