Bigger Pockets: Dave Ramsey Is Wrong – Doing This Won’t Make You Wealthy, But There Is Another Way
There are many roads to wealth. And many ways for those to get started on the road. Some strategies for building wealth are based on keeping expenses minimal. That can include avoiding such small expenses as dining out or buying a cup of coffee.
While avoiding excessive expenses can save money, it doesn’t lead to a pleasant life. There are better places to reduce expenses and enjoy a more abundant life.
It’s more likely that making small cuts will simply mean reducing your current quality of life. Instead, the focus should be on first removing destructive expenses. That includes credit card debt, which carries a high interest rate balance.
And instead of avoiding debt entirely, investors can use it safely. Buying real estate will usually entail a large amount of debt. But such debt tends to carry a low interest rate. And it can be used to buy an appreciating asset, such as a home.
Even better, real estate can provide cash flow. That means even after making the debt payments, it puts money into your pockets each month. That’s passive income.
Ensuring that your expenses are productive for building assets and increasing cash flow make for a more satisfying strategy than cutting back. That’s why having an abundance mindset, rather than a restrictive one, matters.