Many of us — if not most of us — have had it drilled into our heads since we were old enough to become consumers that carrying any debt, regardless of what kind of debt it is, should be avoided whenever possible. We see this belief constantly reinforced via shelves of financial “self-help” books, as well as on television and radio. The most notable of the latter has to be Dave Ramsey, whose callers are given free rein to celebrate wiping out all of their debts, usually their home mortgage, while chronicling the financial sacrifices they made to get to that point.

But is debt always a bad thing? Aren’t there times when it makes more sense to carry a home mortgage vs. scrimping and saving to get that loan off the books as soon as possible? The overarching answer is . . . that really depends, but we’re not being evasive here. There’s a very strong distinction between amassing debt to embellish one’s lifestyle and provide temporary gratification vs. taking on debt that, even upon closer inspection, actually makes a lot of financial sense.

What does this distinction entail? Then join us for the latest episode of A Place of Possibility™, as Richard and Angela provide you with a roadmap to determine what types of debt you’ll really want to avoid, while highlighting situations where taking on debt is not only a good thing, but can provide an effective return on investment that you won’t likely achieve when you stick to a “cash is king” mentality.

And, because so many of us tend to associate carrying debt with a thoroughly compromised credit rating, they’ll also provide a clearer picture of how credit ratings are calculated, what you can do to maximize your credit rating, and, if you find yourself in more challenging financial circumstances, the steps you should consider in order to dig yourself out of the hole.

Some other talking points we will touch on include:

  • What constitutes wise uses of debt vs. the types of debt that should be avoided to ensure your financial well-being.
  • Examples where borrowing money can provide a substantially better accelerated rate of return than paying only with cash.
  • Why debt, if taken on prudently and used for the right purpose, can actually be a hedge against today’s prevalent inflation.
  • What you should do as a matter of regular practice to ensure your credit health, as well as the steps you should consider if your debt level is becoming unmanageable.

And more!

Our goal with this episode is to help you better understand why you shouldn’t automatically fear debt and how debt can be a helpful tool to increase your net worth when it’s used wisely.

P.S. Looking to meet with Richard or Angela at our office in Alamo, CA? Want to discuss more of what you heard in this episode? Wondering where the heck you need to get started or what all of this means for your retirement plans? Schedule a free 30-minute session and find the peace of mind you deserve for the rest of your life. You can also reach us by calling 925.736.6410 or sending an email to

“The Dave Ramseys of the world preach that debt is a bad thing. That one size fits all — if you have debt, you should get out of it as soon as possible. We do not agree with that, and we’re going to explain why. Sometimes it IS a terrible idea, of course, as we all know, but sometimes it can actually be really great.”

We’re proud to present you with our “Know Your Possibilities Guide,” a tool and free resource for you to take notes, review, keep on hand, or even share with your friends and family. So, grab your copy, click the play button and follow along. You’re just minutes away from discovering your next Place of Possibility.

A Glance at this Episode:

0:00 Introduction

2:00 People often obsess about their credit rating. It’s definitely important, but a discrepancy of this sort isn’t a big deal.

2:48 A number of financial pundits — Dave Ramsey being the most prominent — preach this outlook toward debt. We don’t agree. Start listening now to find out why.

3:12 The first example of where the use of debt makes financial sense, if it is structured properly, is when you’re buying a house or a rental investment property.

3:32 Get ready for some mathematical gymnastics, folks, as Richard talks us through how you should look at the relationship between interest rates and our current inflation scenario.

4:39 Even if interest rates don’t go down anytime soon, here’s how they stack up from a historical perspective.

5:42 Take a look at this hypothetical scenario comparing a home purchase using all cash vs. financing with 5% down.

6:55 Fast forward five years into the future and check out where those numbers would stand.

8:20 People often lose sight of this important fact when investing in real estate.

8:38 Investment in real estate features a debt dynamic of its own, especially because your tenants are paying the mortgage off for you. Let’s see how the numbers play out.

10:33 Here’s the benefit for wise investors who understand how to structure their debt. Hint: It has to do with you building wealth.

11:32 Using properly structured debt to purchase investment properties? Watch out for your interest rate! Here’s what you need to know.

12:06 Let’s have a look at some other good uses for debt. Press play now!

12:46 Student loan debt can be a mixed bag, depending on its purpose. Don’t worry, we’ll clarify.

13:45 Car loans? They can be either good or bad debt. Here’s the determining factor.

14:20 Credit cards are an example of wise debt that can actually put free money in your pocket . . . if used responsibly.

15:00 Have a young child? Here’s another use for credit cards that give you cash back and help you save for college!

15:29 We often hear about this financial acronym – OPM, Other People’s Money. Start listening now for how you should use those borrowed bucks.

15:33 Now, let’s look at some examples of bad debt.

16:44 We’re featuring a new segment on the podcast — Moments of Possibility, sharing anonymous client case studies that feature tips and tricks you need to know.

17:20 When deciding to buy or hold onto a property, you have to look at the whole picture and remember to get a second opinion, just like our client Carrie in this Moments of Possibility case study.

20:02 Let’s have a closer look at credit – including credit scores, how to build credit, and how to keep it.

20:38 What goes into a credit score? It’s based on these factors.

21:14 Interested in improving your credit score? Consider these seldom-discussed steps.

22:55 If you are concerned that having available credit is too much of a temptation, do this instead of canceling an account.

23:28 Missed a payment on your credit card? If it’s something that you don’t frequently do, you can call and ask them to remove it from your record. This tip may not always work, but it’s definitely worth a try.

23:50 Have you heard that you can get a higher credit score by not always paying your cards off? Yes, letting one or two run over once in a while can help, but again it’s not something that should be overused.

24:36 Wondering how long bad credit events stay on your record? Angela shares all the details, plus one very important distinction that may determine how you approach a longer standing debt.

25:43 Do you have creditors calling you? Don’t give them ANY information, no matter what. We suggest you tell them to put you on their Do Not Call list.

27:58 Tune in here to find out more about credit repair companies. How do you know if they will help or get you in more trouble?

29:28 Using a credit repair company has its downsides. It often makes more sense for people to use a snowball payment plan instead.

30:30 Let’s look at some best practices to maintain a good credit rating.

32:24 Monitoring your transactions is a simple step that can go a long way toward preventing any unpleasant credit surprises.

34:00 Are agencies like Lifelock really worth the money? Richard and Angela weigh in.


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Links/Resources Mentioned in this Episode:

“One-size-fits-all” won’t fit you here! The Del Monte Group team understands that everyone’s financial goals are unique. That’s why we always provide customized advice. No matter where you are in life, you can depend on our proven expertise to provide financial planning support for long-term success. Ready to get started? Schedule a meeting with Richard or Angela in our Alamo, CA based office today or we can meet via Zoom! >> You can select a date and time that works for you via our calendar, call us at 925.736.6410, or send an email to We can’t wait to help you!

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