Q: Is Debt really that bad?


debt star

A: It might be .   .     .


There are lots of opinions about debt. Some think it’s a great way to borrow your way to becoming rich (Robert Kyoski) and some are really super-negative about it (Dave Ramsey). I’m pretty much in the Dave Ramsey camp but maybe we should back up and take a fresh look because I think it’s a good question.


Is there such a thing as good debt? I think that’s actually the wrong question. Debt, by itself, isn’t really good or bad – it’s not even human.   .       . Let’s back up even further, and see what the Bible has to say about debt.


I am not a Bible scholar, but I have read the entire Bible and don’t believe the Bible explicitly forbids debt; therefore I don’t think it is inherently wrong/sinful (not a salvation issue); however, the Bible does have a lot to say about debt. Specifically it warns against going into debt and has some pretty harsh words for those who borrow and don’t pay back.


The rich rules over the poor, and the borrower is servant to the lender

Proverbs 22:7


the wicked borrows but doesn’t pay back, but the righteous is generous and gives

Psalm 37:21


Let’s ask a different question, is it a smart idea to go into debt?


A: probably not. Let’s start specifically with an example of when I think debt is an especially bad idea. I do not recommend going into debt for a depreciating asset. We covered that in a recent post about cars (see link below).


I think mathematically this inherently decreases your net worth – that’s bad.   .     .


I think it’s also a bad idea to co-sign for someone else’s debt. Co-signing (or surety) is a formal commitment to guaranty someone else’s debt. Essentially you are going into debt with (and for) someone else – someone the bank considers to be a risky investment (otherwise they wouldn’t need someone to co-sign). You’re probably not smarter than the bank.    .       .


it’s a dangerous thing to guarantee payment for someone’s debts. Don’t do it!

Proverbs 11:15


Q: is there ever a situation when it is “acceptable” to go into debt?

A: maybe.


I will start with an example. I would prefer that everyone save up and pay cash for a house – but that’s probably not realistic – especially in certain housing markets. I am personally comfortable with a 15-year mortgage on a house – especially if someone has a reasonable down-payment.  why? because houses tend to appreciate – at least at the rate of inflation and because housing is something everyone needs.  Plus, you can save a tremendous amount of interest on a 15-year mortgage vs. a traditional 30-year mortgage.  Additionally, there is a significant tax advantage to purchasing a home (vs. renting).  I believe purchasing a home is a better “deal” (vs. renting), as long as you plan to live in your house for at least 5 years – otherwise, you are probably better off renting.

Now that we have established what is a really bad idea – going into debt for depreciating assets or to guarantee another’s debt, and an acceptable situation – a 15-year mortgage for a house – what about going into debt as an “investment”?

After all, I believe this is essentially Robert Kiyosaki’s advice – use debt to buy investment real estate and get rich.   .     . Mathematically, I won’t argue with the power of leverage – certainly some businesses (as well as some individuals) have made this wager and consequently made a handsome profit in the process. Some rich people, the argument goes, have made this strategy work; therefore, so should you. I will concede that some have made it big as a result of leveraging debt; however, just because someone else did it, doesn’t make it a smart, or even moral, strategy – for all to follow.

Sure some businesses (and some individuals) have used debt to get rich. Mr. Kiyosaki advocates using this leverage model in real estate. I presume the fall back position, if the real estate market turns south, is you can always declare bankruptcy – that may be legal, but I would argue it’s clearly wrong to not pay back your debts – I think the Bible is pretty clear about that. Also, this strategy, assumes you know what the future holds – for example, that real estate prices won’t collapse, or that your rental investment won’t require significant repairs, etc. Let’s see what the Bible says about the future.


Come now, you who say, “Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit”— yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes. Instead you ought to say, “If the Lord wills, we will live and do this or that.” As it is, you boast in your arrogance. All such boasting is evil.

James 4:13-16


Having said that – the risk is just too high for me to recommend this strategy (borrowing your way to becoming rich); I would rather you pay-off your existing debts – starting with consumer debt first (e.g., credit cards) and mortgage debt last (typically appreciating assets). I’m not afraid of money but I think a healthy level of respect for debt is definetely warranted (common sense in my book).

I do agree with Mr. Kiyosaki that you should get educated (financially speaking); attend a financial peace university class near you. I also agree that some rich people take advantage of the poor. The Bible has some pretty harsh words for those (i.e., the rich) who oppress the poor (proverbs 22:16, proverbs 14:31)

At least think about it.    .     .


get out of debt

Music streaming update



Music streaming is increasing in popularity by the day, with over 5 billion (yes, with a B) in annual revenues – accounting for almost 2/3 of the music business. Both physical (i.e., CDs and vinyl) and digital download sales are declining.


Spotify and Apple music are the two most popular platforms. Apple music has 30 million paid subscribers (as of September 2017) and Spotify has over 60 million paid subscribers, with another 80 million Spotify users using their “free” ad-supported service. Both services are $10 per month for an individual paid subscription.


I’m not a millennial, so I decided to check out the top two and find out what all the fuss was about. I used both Apple music and Spotify, for about 5 months each, and wanted to report back whether these services are worth your time, and more importantly, your money. I’m going to give a sufficiently vague answer – it’s a definite maybe – this answer probably applies to all the subscription services out there (e.g., birchbox,, blue apron, etc.).

Back to the subject at hand – Do I recommend you pay for a music streaming service? All depends on your preferences and your budget. I can really only answer for myself on this one. I will not be paying for a music streaming service.


My top 5 reasons:

  1. I don’t really need a music streaming service. I already have thousands of songs – most of which I owned previously via CD or download (legal, thank you very much). I usually keep 700 – 800 songs on my iphone, so I can listen to them in the car or at work. I already have about 50 playlists and hours of music, seriously, I have a coast-to-coast road-trip covered, and then some.   .     .


  1. I don’t really like streaming services – I know a lot of folks (especially millennials) are going to shout me down at this point (agreement is not required). Before you judge me too harshly though, at least hear me out. I am in my early 40s and have already developed my musical tastes. I really don’t want to listen to songs I don’t like. I mean I’m getting old and only have so much time left – I don’t even buy green bananas – ok, that last part isn’t true, but I still don’t like listening to songs that I don’t like; because I already know what I like (for those of you keeping score at home, it’s not Meghan Trainor – NO!)   Seriously, there are over 97 million songs, and counting, and I do not have the time, nor the inclination, to listen to all of them.     .     .


  1. I would rather spend my $10 on other things. It’s not just a one time $10 charge, it’s every month – I wasn’t a math major but I think that’s like $120 per year, every year.     .     .


  1. Spotify offers a free, ad supported, service. I do like to “discover” new music (sometimes) – songs that are similar to my existing catalogue. I still have my Spotify account and will sometimes use the app. For example, their new “your time capsule” playlist feature is pretty cool.  On iTunes, if you go to the browse feature and select top charts, you can see the most popular songs in each genre – for example, Thunder, by imagine dragons, is #1 (currently), in the alternative genre – this feature does not require an apple music subscription. Just sayin’.  Once you see a new song you like (from the top charts list) go to youtube and give it a listen.  And if you do “discover” a new song, that you can’t live without (insert sarcasm), request an iTunes gift card for Christmas or your birthday, and only buy songs you really like – hey, it works for me.


  1. The radio is still free – seriously, both FM and AM – no charge. They play new songs, old songs, you name it.   .     .

take it all back

check out my previous posts on music streaming




Financial Tips from the School of Life

yellow book


No health, no wealth. Physical fitness and financial fitness cannot be untied. You get only one body and one mind. Take care of them and maximize their potential.

Find a career for which you have passion. It’s not about making the most money, but making the most of the money you make.

Stuff doesn’t build wealth, money does. Stuff costs money and time. If you don’t need it, don’t buy it. And don’t buy it just because it’s cheap.

Choose your soulmate carefully. Find someone who shares your financial values and morals. Starting over sucks!

Kids take money and time. Family planning is important to financial success.

Be frugal with your spending and keep your lifestyle simple. Someone is always ready to take money from your pocket and put it in theirs. Always ask for a better deal or price.

Vote – be attuned to political changes that affect your financial well-being. Understand what you are paying in taxes.

It’s not what you make, but what you get to keep.

Remember, the IRS spells “theirs”!  Debt can be your friend or foe, so don’t abuse its use. Budget your money monthly and avoid using credit.

school quote

Set financial goals. Have a strong sense of what your money is going toward. And, if you don’t want your nest egg scrambled, take action and review your finances often. Pay attention to the details in your financial transactions.

Become literate in all matters financial. Every decision we make, ultimately has some financial impact. Welcome financial advice, but trust yourself most of all. Don’t make financial decisions based on someone else’s opinion. And teach your children good money management skills.

Invest your time, just don’t spend it. Make time for what really matters.

An investment in knowledge always pays the best interest.”  Benjamin Franklin

Begin saving and investing early and consistently. Vigilance and diligence build true wealth. Pretend you make less, and pay yourself first.

Financial independence will allow you more options in the future.

Practice risk management. Buy only the insurance coverage you need. In all areas of your life, don’t “put all of your eggs (trust) in one basket.” Properly allocate your time and resources, and diversify your assets.

Character trumps all. Wisdom, self-control, honesty, positive attitude, hard work, integrity and humility are virtues that form a person’s character.

Reputation is the shadow. Character is the tree.”  Abraham Lincoln

Be generous. For if the willingness is there, the gift is acceptable according to what one has, not according to what he does not have. (2 Corinthians 8: 12)

The previous guest post was by the incomparable Phyllis; CPA, CMA, and personal finance teacher at a local college.  She is extremely smart and motivated, with a wealth of knowledge and experience; her financial success should be lauded and emulated.

Start your own business (maybe?)



This post is probably not for everyone. Starting your own business is hard – you really need to have passion and commitment to make it work. Having said that – it is one of the most common ways that actual millionaires have increased their net worth.


Now that I have given the necessary and perfunctory disclaimers – I will share my little side gig – it’s actually more my wife’s business, but I like to think it’s a team effort (it’s really not.     .      .)


About 7 years ago, my wife and I started Mcdowell Mountain Getaway LLC. This business is a vacation rental of our log home in southern Mcdowell county – about 45 minutes east of Asheville – in the foothills of the Blue Ridge mountains. I love spending time in the Blue Ridge Mountains – I’ve always found it to be peaceful and picturesque – and the food is great too (my favorite is Tupelo Honey in Asheville).



(our street – scenic vista drive – viewing the blue ridge mountains in the distance – picture doesn’t do it justice.     .      .)

The heavens declare the glory of God; the skies proclaim the work of his hands Psalm 19:1


We chose to build a log cabin because land and housing prices declined significantly following the “great” recession of 2008/9.  I don’t think we would make the same decision today, because labor and building materials have increased so significantly.  I recall one report that indicated the cost to build a home has increased 25%, just since 2009.


Another reason I have for justifying our investment is diversity. While stocks and bonds make up the majority of our retirement savings, I also believe in diversification and think that real estate and other non-financial assets complement traditional retirement savings (e.g., 401k, pension, etc.)


We market our vacation rental exclusively through http://www.vrbo.com/351528 (if you want to see pictures). We have been pretty happy with this arrangement. VRBO manages to rent our property between 100 and 120 days per year.  We pay less than $500 (annually) to be on their site, but do pay an additional fee if people choose to book online. Basically, this results in between $15,000 and $20,000 in “income” per year.   It’s basically cash neutral whereby the rent pays normal operating costs. I say normal because we have spent some of our own money on capital projects such as adding an outdoor patio, a fire pit, some major landscaping projects, and partially finishing the basement, etc. We selected a 15 year mortgage (to reduce the total interest expense) and hope that the rent will essentially pay the operating costs for 15 years and ultimately we will own the property outright – essentially using other people’s money.


I say it’s not for everyone because my wife works really hard keeping up with renters and making sure the property is clean and presentable for our guests. It’s a lot of work and with online reviews you can easily hurt your image with negative reviews. We haven’t had any bad reviews but I have seen some (for other listings on VRBO) and it’s a little intimidating knowing we don’t have any control over what people choose to say about our property and their recent stay.


A real estate investment isn’t for everyone; however, most homes appreciate – at least at the rate of inflation – so I think it’s a reasonable way to diversify your retirement savings.


(our cabin)