In this episode I confront the typical notions about debt (ie, all debt is bad) and let you inside my personal approach to debt as a tool for wealth building

About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.

Episode #5 – Debt I Love, Debt I Hate

Welcome to the Indestructible Wealth Podcast. This is the place where we help young entrepreneurs to make keep and grow wealth that you can enjoy now and for years to come. I’m your host Jack Gibson, a senior or serial entrepreneur, founder of multiple seven and eight figure of businesses, and wealth building strategies. Each week I’m gonna share you my tips, resources and secrets, to help you create a plan and build the life you’ve dreamed of.

Debt is bad.   Debt is evil.  Debt needs to be eliminated.   Pay off your debts.  Debt makes you poor.

Have you ever heard any of this advice?

It’s very true that there are certain types of debt that unless you eliminate you virtually have almost no shot at building any sort of sustainable wealth.  The drag on your finances from bad consumer debt is too much for the vast majority of folks unless you’re banking on getting lucky and hitting the lottery.

In fact, let me go on record and say that I LOVE debt.   Debt makes me wealthy.   Debt accelerates my returns.   Debt helps me buy assets that I normally would not be able to buy, at least not in a long time.

Debt helped me turn a $12,000 cash investment into a $100,000 increase in net worth in 5 years, all while creating immediate cash flow that I could enjoy or reinvest into other projects.

In today’s episode, I’ll walk you through my personal philosophy on the types of debt that I hate and the ones I love.   Be prepared to have your paradigm shifted about the role of debt in your financial life.

Alright welcome back to the Indestructible Wealth Show were going to discuss Debt, Step Number 3 of the 7 step strategic plan . And before we get into that I going to tell you, I’ve got a very incredible wife, my wife Kara, when they joke about how you married up, or you outkicked your coverage, all those things were basically mean you got someone super more hot than you, better than you like that was absolutely the case with my wife for sure.   She’s tan, she’s fit, she’s beautiful, she’s forgiving, she’s loving, and kind. And all those incredible qualities pretty much lend themselves to where we’re opposites.  Now I do love people, I am caring I want to make the world a better place and all that but opposite attract in this situation.

So, she was asking me yesterday “when can I listen to your podcast?”  I’m like well, I don’t honestly think you’d be interested at all.  Plus I cuss so that’s even 2 strikes;   finances and cussing like I don’t think this is for you.  So I don’t know when will she listen, she probably will just to see what I say so she can like maybe reprimand me at a later point and say –  Jack Gibson! That’s when I know that I’m in trouble when I get the full Jack Gibson.  Then I’m like Ah shit, what did I do now!?

Well actually my full legal name was John Robert Gibson but I go by Jack.  A lot of people don’t know that a lot of Johns or a lot of people that are called Jack that Jack is a common nickname for John. So I don’t know if you knew that but just educating you on all parts of my life.

So yeah I don’t think my wife is interested in finances,  we’re at the dinner table yesterday and I took a call.  Well it’s actually before dinner was served and the call went longer then I thought.   It was with my property manager on a property I have out in Arizona, and so he’s 3 hours behind so it’s dinner time and I needed to talk to him we had been playing phone tag and so I took the call and then I missed dinner.   She was pretty understanding, she knows I don’t usually take a call during dinner. In fact I put my phone face down on the kitchen counter so it’s not anywhere near me at dinner at all.  I’m not paying attention to it at family time, dinner time is family time. And besides our family time is super entertaining because my boys they are super raunchy we let them get away with it and they push the envelope, and it’s great.

So, I’m talking to my property manager I find out a property that I bought for $80,000 about 5 maybe 6 years ago in Arizona.  I’ve had it leveraged ever since, so it had debt on it, so I went ahead and only had $12,000 of my own money into that particular property.

So my property manager tells me, well this property is now worth at least $180,000 all day long and potentially we can list it for $200,000.   I’m like what the fuck did you just say!? Like, I have not even been tracking or paying attention I had it in my net worth spreadsheet for the last 5 years, and since I’ve been really tracking net worth every month I want to see my trajectory of where I am at in terms of my growth track trajectory so I can get excited about the progress that were making.

So I had it pegged at $90,000 that’s what it was 5, 6 years ago.   I want to sell it now because the rent isn’t keeping up with that sort of price increase so it just make sense to sell it.   So, I sit down at dinner and explain this propertie’s worth a $180k and she was like oh that’s cool. And then on the something else like, it’s so great like she doesn’t care and she’s not vested in the money and that what wonderful about her is that she never married me  for my money and I didn’t have that much then so it’s probably good.  But she’s unattached to material objects, what she wants she wants is quality time, she want to be loved, appreciated, she wants to be heard, and as long as I as long I give and feed those things  she could care less about like pretty much all the other stuff. Now she doesn’t love material objects but like everybody I mean she likes a nice car,  nice clothes and stuff like that but she’s not attached to it and for her she could be happy with a 1000 square foot house and just a very basic car and a small rock on her finger.   So money doesn’t matter to her that’s the beauty of Kara.

So I took $12,000, and I turned it into in all reality I mean at least at least $83k with all the rental income,  with the debt pay down and then along with so if it just sells if I just net 140 out of it, the math is I took $12,000 and turned it into $83,000 in wealth.  So, that’s the power of debt.  So a lot of people think of debt when they say that’s like a bad 4 letter word right so the kind of language that I use in this show for example that’s what people think of debt and I love debt, debt helps me create wealth.  Debt helps me buy things that I normally couldn’t buy, or I would have to wait years to be able to afford if I were paying and saved up cash.

Now, let me be clear there’s certain kinds of debt that I do hate, everything in life has what we call polarity right, there’s hot-cold, good-evil, there’s success-there’s failure, there’s winning-there’s losing, there’s tall-there’s short, there’s skinny-there’s overweight, like everything has polarity in life. And debt is no different there’s polarity so there’s good and there’s bad about it.

So, I want to talk to and get you clear on the difference and which ones deserve to be attacked and eliminated and which ones you want to embrace, which ones you want to enhance and accelerate. Now I know there’s gurus out there who say attack your smallest debt first like Dave Ramsey is all about this, and although this makes sense to create some quick wins so my answer depends on 2 things as far as what you want what type of debt you attack first.

Number 1, is the debt collateralized.  So meaning is there an asset that the debt is attached to that has value greater that the debt, now I personally hate unsecured debt. But I have no issue with secured debt whatsoever.  For example, if I have an auto loan for $30,000 and my car is currently worth $40,000, then that’s not a debt that’s I’m concerned with at all about attacking.  Now, however, if the interest rate is super high like 10 percent something like that above that, find anything about 6, 7 percent I’m attacking that debt to be honest even though it’s a secured debt.  Cause it’s a consumer debt, right, that is higher interest.

If I have credit card with balances of $35,000 then even if the interest rate is higher on the car it’s highly unlikely but just giving you an illustration here. I’m attacking the credit cards first because that’s unsecured debt.  If anything goes wrong with my income, or the economy takes a dive and if affects me that I can’t liquidate or sell any of those assets to cover the debt and reduce the debt, or maybe downsize so that I am taking on less debt and less monthly obligation.  Unsecured debt causes me to lose sleep at night especially unsecured consumer debt.

So, if you take vacation and you just got go on a vacation, we gotta go, we deserve it, it’s been a while, we haven’t taken one for a year this family needs it.  You put it on a credit card, then I’m attacking that debt first that consumer debt, that how you choose consumer debt, that’s absolutely terrible for your wealth building plan.

Okay so the other condition is we got into that is the interest rate now I don’t personally have any issue with an interest rate at 6 percent or less cause I believe on what’s called opportunity cost.  So in other words if I pay down low interest debt just to get debt free then that is money that will not be able to earn a higher potentially life changing return somewhere else.  So let me explain.  So just recently my wife was ready for a new SUV upgrade.  We were planning on waiting a year but we really need an additional tax deduction so we took advantage of what I call the 6000 pound end of year strategy, and I’ll explain that more in another video blog or podcast.  We ended up picking out Mercedes I don’t know its a Mercedes 450 or something the price tag is $95,000.  And although we could have paid cash, the interest rate to finance the purchase was only 3 percent.  Now, I firmly believe in my ability to get more than a 3 percent return on my cash, in fact, a lot of my real estate gets 10 to 15 percent, and my latest self-storage syndication fund, I’m expecting 25% return on investment. Based on how it performed over last decade, okay, over a hundred and ten deals this guy gets 25% ROI on average. So, if I paid for the car in cash then instead of earning 10 percent on my cash, okay, I’d be saving 3 percent the difference being between the two scenarios is the opportunity cost, the 7 percent.  That is the opportunity cost to buy a car in cash.

So, what’s 7 percent on $95,000, that’s nearly $7,000 per year in unrealized income that I’d be giving up paying for the car in cash just to be debt free.  If you look at self-storage fund, unless it ends up at a 20 percent and lower end of expectations return, so now 20 percent minus 3 percent that I’m saving I’m paying off the car that net is 17 percent, that’s over $16,000 unrealized income given up to again to be debt free. So, I’m going to give you the order which I think that you should consider attacking debts in personal finance there’s various options and opinions so you really need to do what make sense for you or what your risk tolerance is.

I have to admit that I have I higher, slightly higher risk tolerance than a lot of people. Although if you kinda weave in and out, throughout of my platform you going to see that a lot of what I tell you is pretty conservative advice. I like responsible risk taking, I don’t like irresponsible risk taking.

So, okay the first one, unsecured high interest debt. This is the plague, it’s fucking black death, scum of the earth debt okay? I don’t know if got my point through and sorry I got carried away but I hope you get the point. This debt has no room in your life. In fact you have this in your balance sheet or your net worth statement, then you have very little chance of producing wealth you guys you just cannot outpace this type of debt.  So you got to attack this debt, this is where you really want to, you want to go to Dave Ramsey, he’s a specialist in this, read his books and really listen to his podcast and this is this is what he will teach you reduce.  He’s a debt coach, I’m wealth building coach.  So you definitely should go listen to him on this and I have no I make no money by telling you to go listen to him right?  But this is a situation where it make sense.   Personally I think that that you should be getting an extra job or side hustle to generate income to pay off this and get it out of your life once and for all.

Look, the average rep in my direct sales company makes a few hundred extra dollars per month and that’s the average, there some that make more than that someone make less but a few hundred extra dollars per month that could be enough to get that paid off 10 times faster than you would otherwise.  So I think you really need to be look at if you got this type of debt in your life guys you need to get off your freaking ass get off the Netflix shut your Netflix account down.  Shut that shit down and get off of it.   You’ve got to put some type of parameters on yourself for scrolling social media and go get a freaking side hustle and create some extra income and attack this debt.  Look, do you want to make, do you want to be wealthy or not, that’s what you got to ask yourself, but if you’re just talking, and talking and talking about it and not taking drastic action and your just bullshitting yourself and go join the rest of America that’s going to be in debt for the rest of their fucking life and just ride off into the very the sunset of delusionment.  Sorry I know, perhaps sometimes I get intense but I’m here, I’m here to help you get a better life, I’m here to help you get a better quality of life and my passion is I’m here to look after you.  I’m here to talk some sense into you.  So if I get a little like over the top I’m, I’m just me, but I want you guys to get results, I want you live a better life.

Okay, number 2  debt to attack is unsecured mid interest debt.  This is what I attack next for the previous thought that I just don’t like unsecured debt.  So, like unsecured mid interest debt, it’s could be, it could be credit card like at 7, 8, 9 percent, high interest is probably north of 10 percent.  I would say if you start to get up to  15, 20 percent that’s super high interest.  Attack this unsecured debt get it just get it out of your life okay.

And then next up, secured high interest debt, so, these are typically bad auto loans.   I see this a lot in car industry, you could have gotten yourself into a bad deal maybe don’t have the best credit, so you got an auto loan, but you have high interest loan on it, or maybe it’s a toy that you really shouldn’t have bought a jet ski, a snowmobile, a motor cycle, so you probably have it collateralized.  It’s secured against the value of the asset you got a debt on. However, you definitely want to get these paid off and clear off that high interest rate.

And then, unsecured low interest debt.  So this is most likely student loans for a lot of you and I personally prefer the minimum payments and just going to let this ride.  A lot of these are like 2, 3, 4 percent.   I’d rather personally just let this ride out and there not really setting you back that much, and you just got to play opportunity cost and learn how to be financially intelligent investor so you can utilize the money that you would’ve taken to pay this debt off and used that to investing in something were you getting a much higher return on your money.

And then finally my favorite form of debt is secured low interest debt.  So, this is most likely your primary residence, I know interest rates down at 2% for some loans which is crazy.  That’s like free money, unbelievable no wonder housing prices are going like crazy people  have access to such cheap money it’s nuts.  Well this could be like real estate investment property, or it could be a business loan it could be a loan against  your business or like you took a loan of to start a business, this is the type of debt that I embrace.  I only pay the minimum I spread it out over as long of a period that I can typically a 30 year payment or amortization schedule.  Anything you pay sooner towards principle is now very tough to get out if you need it.  It’s not liquid and accessible.  So remember that the bank wins when you pay a down quicker because they can then take your extra cash flow that they’re getting  from the debt paid down and loan it out and make 500 percent more on your money.  Thats why they want you to do a 15 year mortgage, because they’re getting more cash flow faster from you on those types of deals.  That’s why they want you refinance, do you ever stop and think why a bank would possibly want you to refinance and send you out a post card to get you to refinance.  Okay, it’s because starting the amortization schedule all over again and most to that in beginning of a loan a lot of the money goes towards principle so they increasing their cash flow off of you.

So, another way to look at debt right. So, keep the money near yourself, spread it out as long as you can go invest it to create a bigger percentage or at least put it into something that matches the interest rate on your mortgage note, but gives you liquidity when you need it.  This could be a like a high cash value life insurance policy.  My life insurance policy  very closely matches the interest rate that I pay on our primary residence.

So I like doing this because number one I have a quick, liquid easily tapped source of funds that I can pull money out against and the thing obviously is to protects my family should anything happen to me the primary earner in the family.   And also, anybody that I name the recipient on that cash value life insurance policy they get that money tax free which is incredible.  So, I hope this helps you with the debt conversation and thinking differently about debt. You may have to listen to this one more time just to like let it sink in.

If you’ve got questions please don’t hesitate to ask different scenarios about debt I’d be happy to take a look at specific situation that you’re in and I’ve done this for many people in the past they ask me okay here, here’s what I’m looking at what should I do what should I pay down what should I not and I’m happy to look at those situations so fire away.  Thanks so much guys here we go have a great day see you on the next episode we’re going to dive into step 4 and here’s where it starts getting fun.

That’s a wrap for this episode on the Indestructible wealth podcast. Before we part ways, I wanna help you to take advantage of two incredible tax saving strategies that could help you save a lot of money all you have to do is leave me a five star review if I’ve earned it and comment in iTunes, Stitcher, Or wherever you tune in. After you done that simple steps just email a screenshot of [email protected] and I’ll send you everything you need to save money on your taxes for years to come. If you like to dive deeper into your own wealth building strategy, check us out at and follow along on my social media. Also, please share this podcast with anyone who’s looking for guidance on their own wealth building journey. Until next time, remember our mission here is to help you make, keep, and grow wealth you can enjoy now and for years to come.


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