A recent study from Ohio State University shows that Gen Y feels empowered by debt. Participants with higher levels of debt reported both a higher self-esteem and a sense of mastery.
Now, you might think it was because they took on debt to pay for their education. But the researchers thought about that, too.
They found that education debt increased the feeling of well-being among participants in this nationwide study. But so did credit card debt.
Can you blame these young people for thinking this way? Didn’t many people in the two generations before them feel the same way at one time?
Buy now, pay later
Buy now and pay later. It sounds great now. But now becomes later faster than one expects.
It may feel great now. But it can lead to misery later.
Debt is a tool
You have to know how to use debt to get the results you want.
- Debt can be good or bad. The walls of fame are paved with people who used debt to accomplish something BIGG. But so are the graveyards of shame.
- Debt solves timing problems if used correctly. Buy an asset that returns 8% using debt that costs you 6% and you will increase your wealth.
- Debt creates money problems if used incorrectly. Invest in an asset that only returns 5% with debt that costs you 6% and you will destroy the wealth you already have.
Want to feel poor? Become a slave to debt by investing in low return (or no return or worse) assets.
Want to feel empowered? Focus on building your net worth.
BIGG success is life on your own terms. Your terms, not your banker’s.
Image in this post from lusi