On today’s episode of the Wiser Roundtable Podcast, the team talks about entering retirement debt free and ways to get out of debt.

Listen on Apple Podcasts or watch on YouTube:

SUMMARY:

On todays podcast, the team starts out by discussing how retirement is all about cash flow. You are no longer getting a paycheck and instead are receiving income from different sources. This income must exceed your expenses. Part of what is important in retirement is being debt free. Therefore, the trick to being wealthy is so get to the point where other people are not making money off of you.

How to Leverage Debt

During certain seasons of life, debt is okay. The proper use of debt is leverage. When buying a first home or a home you will be living in for a significant amount of time, you put down a small amount of money and leverage that through the use of a mortgage. Utilizing a mortgage allows you to purchase a home that you otherwise wouldn’t be able to afford at that point in your life. The goal when purchasing a home is to live in it as you pay it off in a timely fashion. This debt is very different than credit card debt or car loans.

Planning Checklist

  1. Current Debt: What’s our current debt load? Do we have bad debt? Create a debt elimination plan.
  2. Emergency Reserves: This is money set aside in case of a job loss or a catastrophe.
  3. Retirement Savings: How much is my portfolio currently worth? What do I need in my future when I am no longer employed?
  4. Opportunity Fund: This is invested differently than other retirement accounts. It could be a second home, airplane, or for a trip.

How to Become Debt Free

When you are carrying lots of debt, you are essentially a slave to that debt. You might have to forego a job opportunity you’ve always wanted because you can’t take a reduction in pay. One reason why so many people cannot get out of their debt situation is because they are emotionally involved. Pride often gets in the way, because people get worried about what friends and family will think if they sell their car or downsize their home to help eliminate debt. You can’t let your possessions define you. There is a way to get out of debt and that is sticking to a plan. The easiest way to look at this is to start by writing out your debts starting with the balance, monthly payment, and interest rates. Seeking out a financial planner to help is also a great place to start.

TIMESTAMPS:

0:35 Cash Flow in Retirement

5:10 How to Leverage Debt

10:20 Planning Checklist

15:20 How to Become Debt Free

LINKS:

Learn more about Casey Smith and connect with him on Twitter.

Learn more about Brad Lyons.

Learn more about Matthews Barnett.

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Learn more about the Wiser Wealth Management Roundtable podcast and access previous episodes.