FACT Debt is Generally Used Poorly by Financially Illiterate. Please Talk About Money, Debt & Income

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good morning good afternoon good evening

folks michael’s uber one rental at a

time back with the tv star great real

estate investor mom all-around good

person laura morby how you doing laura

you’re doing great how are you doing i’m

doing very very well so one of the

things that i thought we would talk

about in our second conversation today

is debt

obviously there’s the whole good debt

bad debt discussion

uh but one of the things i think that’s

often missed in the debt discussion is

debt is generally speaking the way most

rich people got rich whether it’s

starting a company uh buying real estate

doing all of these things it’s obviously

you’ve got to be

safe debt

uh but yeah it debts powerful kind of

both positive and negative so um when i

bring up this kind of debt conversation

what do you think about

um i mean i i

i guess i’ve seen both sides of it but

i’ve seen during the last recession the

people that

had very little they you know they

weren’t no matter what happened they

were fine so if you had a car paid off

if your house was paid off to a certain

level that your payment was fine

in full

because a lot of people

you know structure

a lot of people only end up only one

home and then

these people that have their house paid

off are usually people who have been

there 20 years and they you know did

something where they you know paid a

hundred dollars extra towards principal

or payment at half or whatever they

could do

um

and those people seemed to be during the

recession it was like oh my gosh you

guys are so smart look at all these

people losing their homes and they’re

getting their cars repossessed and

um

again this goes back to what you just

said it depends on good and bad debt so

the people that were losing their homes

were the people that were overpaid

they were at the top of their

um what they could afford and so yeah if

a spouse or a significant other loses

their job as well or something happens

then you can’t afford it so all of a

sudden you’re losing your house or

um you bought the house and then half

the value went away and now you

purposely are just not making your

payments because you’re upset

um

a lot of stuff like that happened where

it’s just kind of ignoring

the fact that they got a bad moon in the

first place or they were

living at the top of their knees when

they shouldn’t have

so people like dave ramsey like push

people to

you know

not have any debt that’s bad you should

if you can’t pay it in cash then you

shouldn’t buy it

and

you know i think that creates a lot of

people who are afraid

and of course anything that’s fear-based

isn’t right but yes you like you have to

like no if you were waiting until you

have cash to go make any sort of move as

an investor you’re never gonna make it

um

and you might but you might only get one

deal done or you can go get you know

utilize other people’s money you know

opm that’s a whole thing you know

um it doesn’t even have to be a private

investor it can just be getting a loan

so then you can go get into the game and

as long as you’re making

a smart financial decision and you’re

not getting a bad loan product you

should be fine yeah

yeah when i think about debt you know i

think there’s a couple of things first

and foremost i don’t think enough

families talk about money in general and

very few even talk about debt

right they talked about income right i

think more i think right we’re coming up

on the holidays i would challenge

listeners here to talk about money and

debt and things of that nature interest

because you either use interest or you

pay interest right and um you know there

are lots of safe ways to do it but again

kind of dave ramsey point i think

there’s a lot of people

the majority i’ll say it this way right

so greater than 50 really should focus

on paying off their debt because they’ve

they’ve kind of just racked up

bad debt and they don’t even know it

right i remember the first so i was i

went to

i remember my first day at santa clara

university i was getting my books and i

was walking up to get books at the

bookstore and there were these tables

and of course i’m just gonna say what it

is there’s a bunch of pretty girls there

uh you know

giving away stuff and i’m like i’ll go

stand in line to the pretty girls and

credit card stuff

so of course i

don’t know any difference i had a job i

had some income right so i filled that

application lo and behold got my first

credit card

right i never never talked about it with

my mom or dad i just it was just yeah

it’s just um

we we’ve gotta we have to talk to the

next generation

about debt credit cards income taxes

uh i don’t know was it talked a lot

about in your family because it

certainly wasn’t in mine

um

yeah because um

i mean i’m probably more of a unique

situation because my mom my dad ran

you know multi-million dollar

construction

oh cool

and my dad did have an office when i was

really young but then

my dad just had me so late in life that

he was in a different season of his life

um by the time i started to be 10 11 12

where i was paying attention

and

also it was during a time where stuff

was switching to the internet and

switching to computers and away from

facts and in person and stuff and so

there was a lot of things that i think

my sister and i got involved with

because my mom was involved or because i

needed help with technology

and so like i was involved in

life insurance conversations and getting

health insurance quotes and um

uh osha reviews like i was a part of

like

some pretty interesting stuff so if i’m

a part of that of course i was a part of

conversations about taxes and write-offs

and

um

you know

my dad buying another work truck for the

year to you know offset some of his tax

liability stuff like that so

um but also my parents weren’t

my parents my parents came from nothing

their their parents were incredibly poor

my mom grew up in a garage like

they lived in a two-bedroom house and

six kids and all the girls lived in the

garage

and my dad grew up in a trailer park in

like

the worst town in arizona i don’t even

want to tell you what it is

so they had no concept of

um

you know how to invest properly and so

my parents made a lot of terrible

decisions they lost

almost half a million in the stock

market they invested in an airport here

in town that went nowhere and lost like

almost a million dollars doing that so

just like stuff that like

and i i talked about my dad the last

video building a spec house and losing

that and so they made a

they tried

but i was also a part of like different

investing conversations and like why did

you do that and

i don’t know so it’s it’s interesting

because i have some aspects

of them

where i’m like my dad always makes a

joke when he makes money it’s burning a

hole in his pocket like he’s got to

spend it yeah and my dad loves

beautiful homes and nice fast cars and

stuff like that and my mom loves to shop

and so like there are some things that

i’ve had to be like that wasn’t

normal

and it’s fine when money’s fine

but it’s not fine when money’s not

overspending no concept of a budget

and bad investments

you know like you can recover really

easily when you’re just bringing in a

ton of money but

if

if something’s going on with your

business or something’s going on market

you’re in trouble so

i experienced a lot of ups and downs

because of that

that’s

it’s

i love the fact that and again you bring

all of that history and experience to

what you and your husband are building

now

yeah um so it’s

obviously your your oldest son how old

is he again your oldest he’s 14 you just

turned 14. yeah and you were bringing

him i remember we had a conversation

probably six months ago about him rent

or owning i think a dump truck i

remember that right uh trailer or

trailer yeah yeah dump trailer right so

again just getting involved in the

business and having him now probably

file taxes this year if not this year

next year so

it’s just you’ve got to you we we we

need to talk about money more

i agree

right

the good and the bad because again my my

childhood was yeah i’m guessing we had

the we didn’t have as many ups we had

lots of downs i mean i remember a

recession in the 80s early 80s

um

you probably weren’t even born yet but

anyways early 80s

my dad was unemployed for nine months i

had to get i had to go get a job as a 12

year old right to put food in the fridge

so um

yeah money

my biggest memory of money is if you

have it you’re happy if you don’t you’re

you’re angry right

it was very

there was no middle ground

so yeah just do i want parents to

realize your kids are watching right my

mom my mom did a great job to try to

shield us from that but you can’t shield

your kids from your parents fighting

about money

so have the conversations talk about it

and it’s interesting that you brought

that up too because even though your

parents didn’t necessarily involve you

in any of these conversations

um kids watch you they

are learning about how to act and how to

their relationship with money

um

you know even if my parents didn’t talk

to me about it i would

i mean i wouldn’t have as good of a

understanding of what they were going

through

but

um

i

my attitude towards money and how i

spend money and how i save money and

budget stuff is

um

how i started is because i watch them i

watched how they lived life i watched

how they spent money i watched how they

acted so it’s one of those things where

it’s like yes you need to have a

conversation

too but like you also need to

be aware that your

habits and your attitudes towards money

um whether you talk about them or not

are going to affect how your kids handle

money yeah your your kids are watching

whether you like it or not they’re

watching some of my some of my memories

about money as a kid where a my i

remember my mom having a big old thing

of coupons

right literally cutting up newspapers to

say i mean

that’s one of the reasons i don’t do

coupons today because no i’ll pay the

extra 50 cents i’m good

it’s like ah coupons i remember fighting

i remember i remember one time during

because again i lived through inflation

yeah uh which again we’re feeling now i

remember her in her checkbook i remember

looking at the line or maybe it’s just a

visualization i have it’s like she’s got

87 bucks left and she has three bills

left to pay and she can’t pay them all

because everything’s going up and the

income’s not there and

inflation is a tax people you don’t get

it inflation’s attacks

and um

yeah

i don’t feel good about where we’re

going folks talk about money it’s the

holidays you’re going to be home with

your kids hopefully you’re off work you

get time to enjoy it talk about money

taxes

investing because if you don’t they’re

watching

they’re they’re learning anyways and i

think it’s fine too like i’ve had

conversations with asher where i’m like

this was a mistake and here’s why

i do the same thing um

i mean obvious

i’m in charge of teaching him how to

manage his emotions and talk to people

and stuff and there has been times where

i emotionally reacted incorrectly

and it doesn’t even have to do with him

but because he was around i will 100

when it’s over be like that was not

handled correctly i didn’t do that right

and here’s why and here’s how i should

have acted here’s how i should have

approached it

because that’s like anything that you’re

doing they’re learning so i think the

same can be said for money like if you

if your kids see you racking up credit

card debt and you can’t even stop

yourself

then at least tell them that what you’re

doing is not right you know you don’t

have to like obviously crap all over

yourself but um yeah i think it’s

important too to acknowledge mistakes um

and i think that’s one of the things

that my parents did and why

um

like my parents weren’t like that was a

genius idea i mean obviously we had

conversations about why they thought it

was a good idea

um and like jokes and stuff like you

know the money burning a hole in my

pocket and stuff so

um but yeah there was no like

there was honest conversations about

mistakes as well which i think is really

powerful too because those are sometimes

life’s greatest learning lessons because

life isn’t always perfect you’re not

always going to make the right call

um

but yeah yeah i think that’s really

important

yeah folks again your kids are watching

the last thing i remember about uh you

know at money is i remember

hearing the phrase robbing peter to pay

paul

where you pay one bill and you let the

other one slip and then i remember i

don’t know if they do this still but the

envelopes coming in different colors

like white then pink than yellow than

green right based on how many months

you’re late yes folks they used to use

different color envelopes when you were

like well that’s embarrassing i did not

know that yes they did yes that’s

horribly embarrassing oh my gosh yes oh

we got no pink ones today

oh my gosh i had no idea that would be

so embarrassing especially when you’re

going through a bad time it’s like you

don’t need anybody else to like

like you know you know you’re losing

sleep over it you don’t need your

neighbors to see a mailbox full of peak

envelopes there you go oh

yep

so laura if somebody wanted to buy some

real estate in arizona or just reach out

to you and follow you how would you like

them to do that um my instagram is

lauren warby no spaces there you go

thank you very much laura thank you

 

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