Is It True That Cash Is King And Debt Is Dumb

 Cash is king, debt is dumb. This is a phrase, it is a statement that's thrown out a lot. My name is Caleb Williams, I'm here in the studio with our head wealth coach, the one and only Jeremy Roodehouse, and the purpose of why we make videos about money and business is to help you live more intentionally, and this is a video that we wanted to shoot in the studio to set the record straight and hopefully help you with this concept of cash is king, debt is dumb. Well, this came about because of our Wealth Key Workshop and Caleb and I, as we're creating all of this fun stuff, we're like, you know what, there's these paradigms that we have about wealth and money and what we want and why we do the things that we do. And so one of our sessions really addresses some of these deeply held paradigms, and one of them that we wanted to highlight is this statement that gets chucked out there, but it really is a paradigm, something that influences or maybe dictates the decision making process is that relate to things like life and money and wealth and so on and so forth. So Caleb says, Jeremy, I want to talk about this in just a short fashion. So how do we do that? Well, first off, realize that this is a paradigm that most people use to make decisions with. And if we have a paradigm that's not necessarily true, and we're making decisions based off of that paradigm, what is the logical conclusion about those decisions that we're making? They might not be right, or they could not be, they could be putting us in a situation that we don't want to be in. So here's the deal. He said, Jeremy, can you come on? Can you describe the whole cash is king that is done? So here's the deal. We hear cash is king, debt is dumb. And we think to ourselves, I need to get that debt, right? That is bad. Yeah, that is awful. Well, here's the deal. In our workshop, I hold up a dollar bill, sometimes it's a hundred dollar bills or one of those, we're feeling cheap today. So I have a dollar bill. And I asked the audience very plainly, okay, what does it say at the top of this dollar bill? Well, for those of you that have really good eyes, it says, Federal Reserve note. Caleb, what's a note? It's a debt, debt instrument essentially. It's a debt instrument. So what we have here, when we look at the definition of what is money, and what is currency, we see that currency is not a store of value. And this in fact says Federal Reserve note, it's actually a debt instrument. So if that is the case, let's just assume that it is, then this is not money, which means it's not cash. And it also means that this is not, it's debt. So now we have to rephrase this and we have to say, debt is king and debt is dumb. So where does that leave us in our decision making process? If debt is king and debt is dumb? It's very interesting because a lot of gurus out there and financial pundits will say things like that. But if you actually take their logic and you say, what do you mean when you say cash is king, like you mean this Federal Reserve note, which is currency, right, not money, which is getting printed while we're speaking, right, and becoming less and less valuable. It's just like, when you start poking holes at this, you start saying like, and that's what I love about what you're able to do through this whole paradigm talk is starting to challenge people's paradigms. And it's fascinating. Yeah. And so here's the purpose of that Caleb. If in fact, debt is king and debt is dumb, then what it potentially means is that we're trading in debt. We're not trading in money. We're not trading in cash. So if that's the case, then is debt really dumb? Or is it just a fact of the economy that we find ourselves in? And if debt is king, and it's, and it's also maybe a little dumb, then how do we take it from dumb and make it smart? And this is really the lead in to having a dialogue about, you know, does it make sense for me to pay off my house? Does it make sense for me to leverage bank financing in order to purchase a vehicle or purchase equipment for my business or to pick a thing, right? The whole point of this is to retrain our brains to think about what's really going on. This is not money. It does not have a store of value. We've got a nice little pictograph that shows that in the workshop. It is debt. It says federal reserve note on it. We are playing a debt game. And if we don't understand how to play the debt game, then we're really not going to have the full command over our financial household, our household economy, our business that we really could if we switched our thinking just a little bit. I think the big takeaway is, I guess I would love to know your biggest takeaway in the comments or maybe share this with somebody that might be just in your face about, you know, don't be in debt. And you can kind of say, hey, what is debt and kind of kind of get them to start thinking differently. What is your biggest takeaway as a coach? I know that part of the coaching relationship that you have at Better Wealth, it's like everyone that goes through our program that works with you is having a conversation about efficiency. And we're trying to kill any sacred cows. And if someone's holding on to a paradigm, instead of attacking that and saying, well, no, 30-year market is the right way to go. We've learned by example is to say, let's take a step back and let's realize why you believe this paradigm. And in a lot of cases, we've seen people find millions of dollars of potential in their life because of this paradigm being shifted. So just today, as a matter of fact, a friend of mine, Dave, we were running numbers on something that logically did not make sense to the two of us. We found that for a particular case, actually buying down the rate on a 30-year mortgage made sense in that particular situation. There's a lot of folks that will, you'll hear the phrase, measure what matters. Well, the reason that I think that we're so powerful and valuable in a coaching relationship is there's the nuance, there's the relationship, there's the behavior of the client, there's the behavior of the family. But then there's the math. So let's measure what matters because I could be wrong. What I think might be the case is actually not the case. And so having a system to measure the math, really apples to apples, so that you can make decisions based off of what we know today. If you were ahead of crystal ball, this would be a completely different conversation. But because we don't, we have to measure, we don't have to. But if we measure what we know today, then we can make better decisions for the future. So just that one thing, that blew me away today as we were running through it. Because in general, buying down a rate in our low interest rate environment has not made sense. Now that we see interest rates climbing a little bit in specific behavior examples, it may make sense. But run the numbers, do the math, and feel really good about your decision because of those things. All right, so there you have it. Debt is dumb, debt is king. Did I mess that up? He did. Debt is king, and debt is dumb. There you go.