Becoming financially free is a top goal for many people. The usual first step is to focus on getting out of debt by paying off your mortgage and big liabilities. While this advice has been preached by the Dave Ramsey and Suze Orman types, this could actually be a huge mistake, according to personal finance advisor, Curtis May. In fact, he shares that paying off your mortgage could actually make you poorer and expose you to more risk.
There is good debt (that helps you make money) and bad debt (that costs you money). He believes you should leverage good debt in the same way a business would treat good debt. But debt is just one aspect of financial freedom. When looking at a mortgage, he shares that paying down the mortgage actually helps the lender, while putting you in a more risky position. Curtis elaborates on this and shares his 5 principles of personal finance to help people become financially free.
Curtis is the creator and owner of Practical Wealth Advisors (PWA) and host of The Practical Wealth Show Podcast. He helps individuals and families become financially free by following the principles of wealth creation that have endured for centuries. For 35 years, Curtis has been teaching people that their number one financial asset is their knowledge. The more they know, the lower their risk, and the greater their chance of success over time.
In this episode, he shares more about debt strategies and why paying off your mortgage could expose you to more risk. In addition, he shares details around prosperity economics, the accumulation theory vs the velocity of money strategy, and privatized banks vs. traditional banks.
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Key Insights on Personal Finance and Accumulating Wealth
The Rich Dad, Poor Dad quest to find out the truth about money
Align first on your principles, strategies, and then tactics
Curtis is a 3rd generation business owner
You never make good money working for someone else.
Prosperity Economics: accumulation theory vs. accumulation method
Being the CEO of your life (treating your personal finances like a business)
Destructive debt vs. constructive debt
Making more money by creating value in the marketplace
Playing financial defense (building a foundation and capitalizing)
Using debt as money
The three rules of investing: Invest in yourself, invest in what you can control, and don’t chase returns.
Understanding investments that you can control
How to be financially secure without chasing returns
The 5 principles of personal finance:
Saving money (401K does not count!)
Maximum Protection (Insuring your future)
Full Replacement of Assets at Death (legacy wealth)
Liquidity (equity has no rate of return)
The Velocity Method (cashflow)
Why having debt is a good financial decision
What’s good for the bank is bad for you.
Using future earnings as collateral
Bullseye Round
Apparent Failure: I had to learn property management the hard way.
Digital Resource:
MindMe mobile
Less Annoying CRM
Most Recommended Book:
Becoming Your Own Banker: Unlock the Infinite Banking Concept (R. Nelson Nash)
Daily Habit:
The 12 Week Year
Current Curiosity:
Becoming a better communicator
Wish I Knew When I Was Starting Out:
Whole life insurance is not evil.
Best Place to Grab a Bite in Philadelphia:
Gino’s
Get in Touch with Curtis:
Get this Report - Creating Wealth on the Velocity of Money: Text PWEALTH to 55444