2 Crucial Money Rules You Should Know But Were Never Taught

We’re often told that it’s good to be prudent.

Avoid debt. Live within your means. Work hard to save money.

This advice sounds nice, but it rarely works.

Today’s article looks at two important money rules that most people never learn. Yet, knowing both of these strategies will completely change how you think about personal finance.

And, it may even protect you from common money problems like inflation or the inability to save money.

Let’s dive in.

#1: How To Make Long-Term Debt Your Friend

High-interest consumer debt is bad. Many credit cards charge 25% annual interest (or more!), so you always want to pay your balance off on time. Otherwise, you’re losing money.

However, some forms of low-interest debt can be good. Especially when you are using that borrowed money to buy an appreciating asset.

Why, because inflation is working for you.

If you could take out an $800,000 loan at 3% annual interest and reinvest that money into something that generates 7% yearly returns, you’re profiting $32,000 (4%) off borrowed money.