Live 100% Debt-Free
The second step to take is to become and remain debt-free. The main goal is to eliminate wasteful outflows and build a proper foundation for our capacity to generate inflows.
The fiat standard has unfortunately accustomed many of us to living in constant state of debt. This can be easily seen by the widespread use of credit cards, auto loans, mortgages, corporate debt, government debt, buy-now-pay-later schemes, overdrafts, personal loans, and leases.
Prices always seem to creep up because every time new debt is issued, new fiat money is created, adding to its total supply. Similar to how gold is mined by digging underground or how Bitcoin is mined using electricity, fiat money is 'mined' by getting into debt. This is why debt is pervasive, and many are unfortunately 'drowning' in it.
I'd like you to picture being in debt not as something to be analyzed from a purely mathematical standpoint, but rather from a psychological and spiritual perspective. Being in debt or debt-free inevitably leads to changes in your decision-making qualities, which affect your ability to generate inflows, make wise spending decisions, and more.
Both states, in a sense, grow over time, like a seed that sprouts, takes root, and develops into a tree. One of the most important aspects of analyzing the effect of being in debt or debt-free is the amount of time spent in either state. The effects accumulate and grow stronger over time.
Being in debt is like having a constant drip of poison that slowly spreads throughout the system and accumulates over time. It leads to financial waste, misjudged valuations, and the destruction of productivity. Debt also becomes a source of anxiety, fear, restlessness, and other negative effects that can significantly impact a person's financial well-being over their lifetime.
Being in a debt-free state is like acquiring a metaphysical asset: a calm, free, and clear mind, which enables you to make correct decisions every time you interact with your money.
Debt is a source of immense waste in your life, and when paired with high Bitcoin volatility, it becomes an extremely dangerous combination. To transition to a full Bitcoin standard, it is essential to learn how to live completely debt-free and eliminate all debt from your life permanently.
Your Money Exists In The Past And In The Future
Do Not Ever, Under Any Circumstances, Spend Money From the Future
Simply put, the future is uncertain, which means nobody can predict what will exactly happen tomorrow, next week, next month, next year, or even in ten years. While we can plan and assign probabilities to certain events, we can never know with certainty what will occur.
Uncertainty often evokes fear of negative outcomes, but it also implies the potential for positive outcomes. We don't know what will happen, when, or how—whether good or bad. This inherent uncertainty makes it fundamentally unwise to spend future money.
The Risk of Spending Future Money
When you incur debt, you commit to future cash outflows without knowing your future income. This decision can create two main problems:
Increased Present Cash Outflows:
Negative Events: If a negative event occurs, such as losing your job, facing a decline in income, or experiencing a health issue, your debt situation worsens. Reduced income increases the risk of defaulting on your debt, leading to a cascade of negative consequences. For instance, financial stress is a major cause of marital problems and divorces, further amplifying the negative impacts.
Missed Opportunities: On the flip side, debt can prevent you from seizing positive opportunities. For example, you might miss out on a chance to switch careers or start a new business because you cannot afford to take the risk. These opportunities might temporarily reduce your income but could eventually lead to significant financial growth. Debt limits your ability to take such calculated risks, as your cash outflows are already committed to debt payments.
Subjective Valuation Changes:
Each time you make a transaction, you assess its value in the present. This valuation can change over time. An item you purchase today might seem worth the money now, but in the future, you might value the money more than the item. Subjective valuations fluctuate due to various unpredictable factors, making it risky to commit future money.
Given the uncertainty of the future and the potential for both negative and positive outcomes, it is unwise to get into debt. Debt increases your present financial obligations, making it harder to adapt to negative events and seize positive opportunities. Additionally, your subjective valuation of purchases can change, further complicating the decision to spend future money. Therefore, it is prudent to avoid debt whenever possible to maintain financial flexibility and stability.
Always Spend Only Your Past Money
Spending money you already have means you are fully aware of its opportunity cost because your money is already budgeted. You will always get a better deal when paying with cash compared to using credit, and you will avoid paying interest over time. Additionally, you should consider the future purchasing power of these savings if invested in Bitcoin.
For example, if you see an item with a $5,000 manufacturer’s suggested retail price (MSRP) and decide to buy it with cash, you may be able to negotiate the price down to around $4,500. On the other hand, if you finance it over five years, you would end up paying about $6,000 in total, or $100 a month. The $1,500 price difference should be adjusted for its opportunity cost if it were saved in Bitcoin over those five years. Even if we assume that Bitcoin's growth rate slows to ten times less than its historical trend, we are still looking at a compound annual growth rate (CAGR) of about 15%.
Furthermore, this analysis does not even consider the value of your potential to increase your inflows. By avoiding debt, you cultivate a spirit of freedom, peace, and clarity, rather than a spirit of slavery, restlessness, and confusion. This positive mindset can significantly impact your ability to grow your income over time.
Being In Debt Is A State Measured In Two Dimensions: Time And Depth
When you are in debt, you grow negative spirits, and there are two factors that determine the level of their growth. The first and most significant factor is the length of time spent in debt. This period is measured from the moment you incurred debt to the moment you became debt-free. For instance, you could be in debt for seven days, seven months, or seven years. The longer one remains in debt, the deeper the spirit of slavery becomes rooted.
The second dimension of debt is the depth of your debt, which is the ratio between the value of your assets and liabilities. If you have $100,000 in assets and $80,000 in debt, you are 80% in debt. If your liabilities exceed the value of your assets, such as if you have $100,000 in assets but $150,000 in debt, you have a negative net worth.
It is essentially impossible to completely avoid incurring debt because, even without entering into a formal debt contract with a lender, you generate liabilities during normal financial transactions. For instance, when you visit a restaurant, you typically consume the meal first and pay afterward. If you begin your meal at 7 p.m., finish it at 9 p.m., and then wait one hour to pay the bill, you are responsible for paying for that one hour. It is preferable to pay when you finish your dinner at 9 p.m. and settle the bill immediately.
Likewise, when your regular bills arrive, get into the habit of paying them off immediately, rather than waiting to do it. Let's say you receive the bill for last month's electricity usage on the first of the following month, with a due date of the 15th. Do not delay making the payment until the 15th; instead, make the payment immediately on the 1st. Always return to the first principle stated above: the time spent in debt breeds the spirit of slavery. Eventually, you will not want to delay paying off your debts any longer than absolutely necessary.
Age Your Money
The older your money, the more financial peace you have. Debt reduces the age of money. A higher age of money equals a lower time preference. A higher age of money allows for more time to research the purchase, resulting in a better purchase. With a higher age of money, you will enjoy your purchases more because more time was spent planning, anticipating, and overall appreciating them.
Two States Of Being (In Debt And Debt-Free) Generate 6 Different Spirits
Spending credit taints a person's psychospiritual makeup with the spirits of slavery, restlessness, and confusion. You can be either "In Debt" or "Debt Free" in your spiritual makeup. Each state cultivates the growth of different spirits: when you are in debt, you cultivate the spirits of slavery, restlessness, and confusion; when you are debt-free, you cultivate the spirits of freedom, peace, and clarity.
There is no such thing as "good" or "bad" debt, but there is a specific psychospiritual mechanism that one state cultivates over the other. It may be helpful to imagine your soul as soil, with seeds of various spirits inside that are lying dormant. When a seed is watered (in this metaphor, watering the seed is analogous to a specific practice), it sprouts and begins to grow. If you keep watering it, it will get bigger, stronger, grow roots and a trunk, and eventually produce fruit.
When you owe money (i.e., have a liability on your balance sheet), you begin to "water" the seed of the spirit of slavery, restlessness, and confusion. When you have no liabilities, that is, you owe no money to anyone, you begin to "water" the spirit of freedom, peace, and clarity.
In Debt Spirits
Spirit Of Slavery
Spiritually, the borrower is a slave to the lender. Slavery here is defined as the lack of freedom in deciding how to utilize time. The extent of this freedom reduction is measured by the amount of time needed to service the debt over its duration.
People can intuitively sense this spirit in you by observing how you spend your money, perform your job, and use your free time. Generally, the longer and deeper you are in debt, the less free time you will have, the more stressful your working life will be, and the more tightly you will need to restrict your spending.
The spirit of slavery emits a subtle energy of desperation that others can sense. This aura repels opportunities because no one likes to deal with desperation, as it makes them feel bad if they do nothing to help. A solution to this is to make giving a regular habit.
When a person lacks a well-established giving practice and senses desperation from the spirit of slavery in another, they will seek to avoid or minimize economic interaction with that person.
The spirit of slavery means you can't fully control how you spend your time; it will be partially or fully used to service the debt. The spirit of slavery grows stronger the longer you're in debt. Once you eliminate debt, it stops growing. The longer you stay out of debt, the slower it will grow back if you decide to incur debt again.
Imagine it as an obstacle that arises when you lose the spirit of freedom. Instead of being surrounded by fruitful trees, your environment is filled with thorns and weeds. The presence of the spirit of slavery intensifies every challenge you encounter. It consumes your sense of pleasure and magnifies your hardships.
Can you decide to dedicate the next six months of your life to a business venture that has an 80% chance of doubling your income in just one year? If you're already in debt for over a year and still have more than six months of payments to go, then it's unlikely to happen.
Because of this, the spirit of slavery incurs opportunity costs on both your future and past inflows during your time in debt. Once you attain a debt-free state, the opportunity cost vanishes, leading to higher inflows and lower outflows over time as the spirit of freedom grows.
Once you are debt-free for at least one year, you can dedicate the following six months to a business venture with an 80% chance of doubling your income in a year. Even if the inflow doesn't double (20% chance), you can repeat the process with the same time frames and odds. This time, having been out of debt for two years, you'll be able to plan your decisions for up to two years.
Spirit Of Restlesness
Being in a state of debt means constantly worrying about making the next payment on time, which produces a spirit of restlessness. The stability of your income source is crucial because debt repayment is your top priority. If your income source encounters financial difficulties, it will directly affect you. Whether you are consciously aware of it or not, this fuels your restlessness.
Your spirit of restlessness also affects those around you. Restlessness leads to impatience, disturbs sleep, and negatively impacts your health. Ultimately, it lowers your overall ability to earn money.
Spirit Of Confusion
The main cause of the spirit of confusion is the choice to spend money from an uncertain future. Humans can only make valuations in the present, informed by the certainty of their previous valuations. When you spend future money, you become confused about the value of what you bought. This is because you performed a present valuation on a present item using future money, but in the future, your valuation can change completely.
Confusion raises the cost of ownership of the purchased item because you are less likely to properly care for it. You don't properly care for it because it is not truly yours until you pay it off. During the payoff period, your valuation of the item may change, and you may value the money you are paying more than the item itself.
If you try to liquidate the item to pay off the debt, you may find that its depreciation, combined with reduced ongoing maintenance costs, has increased the cost of ownership so much that you cannot completely pay off the debt by selling the item. In other words, you are "underwater," as the asset you are trying to liquidate is worth less than your debt.
The spirit of confusion makes it more difficult to realistically assess the value of the item you purchased with debt. Knowing that examining the situation will only add to the confusion, you may avoid confronting it altogether.
Debt-Free Spirits
The spirit of freedom is a state where you are fully in control of how you utilize your ultimate resource: time. By staying debt-free, the spirit of freedom grows with time. Think of it as an asset, similar to a tree that flourishes and bears more fruit as it grows, as long as you remain debt-free. It needs time to grow. When you enter a state of debt, the growth of your spirit of freedom stops, and it resumes once you get out of debt.
The more spirit of freedom you have, the greater your ability to decide how to utilize your time. If your spirit of freedom is one year old, you have the ability to decide how you spend your time for up to a year. If it’s ten years old, you can determine how to allocate your time for the next ten years.
The longer you stay out of debt, the better you become at understanding and utilizing your remaining time in the future.
Spirit Of Peace
When you don't have to worry about your next debt payment, you can sleep peacefully and find serenity. When you have the spirit of peace, you can appreciate what you have more. The spirit of peace allows you to be fully present. The spirit of peace has the power to heal both your mind and body, leading to improved overall health. Your spirit of peace will bring peace to those around you.
Spirit Of Clarity
The spirit of clarity manifests as a heightened awareness of the value of each purchase you make. If you consider its value for you to be greater than the expense, you will choose to buy it. If not, you won’t. As your spirit of clarity grows over time, you will continue gaining a more heightened awareness of the value of your purchases for you.
The spirit of clarity will help you keep tabs on your belongings. Once you value an item less than the money it can sell for, you’ll choose to sell it. This will help you keep fine-tuning your net worth composition.
Debt Effects
How Your Debt Affects You
Your debt affects your spiritual blueprint. It impacts your ability to generate inflows and influences how you manage outflows.
This may seem obvious, but it should still be stated explicitly: when you spend on credit or enter a state of debt, you are still spending money; you are not receiving the item for free.
Often, we miss this point because we mistakenly believe that if we purchase something on credit, even if we don't have enough money to pay for it in full, we are getting it without having to pay for it. However, we will be making payments for it; they will just be spaced out over the length of the debt.
The fact that we have not yet made a single payment for this item gives us the impression that we received it for free. Even when we begin paying for it, we still have the impression that we obtained it without actually paying for it. Do you see what I mean?
Suppose that you have $10,000 in your bank account and make $4,000 per month. You are looking at a new automobile with a price tag of $50,000. You clearly cannot afford it; even if you emptied your entire bank account, you would still be $40,000 short. However, if the cost of this vehicle is presented to you as $650 per month over the next 84 months, you will only compare two numbers: your current monthly income of $4,000 and the monthly outflow of $650 for this car. Suddenly, it appears that you may be able to purchase and begin driving this vehicle. But there is a great deal of confusion here.
Starting out in this massive confusion, you will try to rationalize why you should actually go for it. You will use this car to get to work, your old car is in need of repairs, this new car will be better and more reliable, etc. You will earn more money in the future, and you really want it now.
However, the true calculation for this automobile is as follows: First, if you paid with cash, you would likely receive a price reduction, perhaps between 5 and 10 percent. If you multiply $650 payments by 84 months, you'll end up paying $54,600 for the car, as opposed to $47,600 (5% discount) or $45,000 (10% discount). We're talking about a $7,000 to $8,600 difference over 84 months.
After that, you must determine the opportunity cost of holding onto this difference if it was saved in Bitcoin. At the time of writing, if you held an $83 difference per month ($7,000 / 84), your purchasing power would increase 450%, resulting in around $36,000 worth of Bitcoin. If you do the same calculation for a 10% discount ($102 per month, $8,600 divided by 84 months), you would end up with around $44,000 worth of Bitcoin.
You should also calculate the depreciation of the vehicle over the next seven years and understand that the rate will likely be lower if you purchase the vehicle with cash instead of credit. This is because, in general, we tend to care for things more when we own them outright, as opposed to gradually gaining partial ownership as the item is used. There is a reason why leased and financed automobiles are typically in poorer condition after being driven by owners who took on debt to acquire them compared to the same automobiles driven by cash-paying owners who took better care of them throughout their use. The same is true for any other item you purchase with credit.
Your Outflows Are Increased Because Of Interest, Opportunity Cost & Misallocation
Spending credit is always more expensive than spending cash because humans have a positive time preference, meaning they prefer present money to future money. The cost of spending future money is expressed in the interest rate.
The price you pay over the life of the debt has two opportunity cost sources: the amount you would save if you paid for the same item with cash and the total interest you will pay over the life of the debt. Your opportunity cost should be calculated in terms of the appreciation of purchasing power if the money was saved in Bitcoin throughout the duration of the debt.
There is a third, frequently overlooked cost of using credit: the opportunity cost of financial decisions made under the influence of the spirits of slavery, restlessness, and confusion rather than the spirits of freedom, peace, and clarity. For instance, your next 30 years of inflows and outflows, as well as decisions regarding your net worth balance, will look very different and have very different outcomes if you a) have 50% of your net worth in debts or b) have no debts.
Your Inflows Are Reduced Because of Lower Risk Tolerance
Your inventory of time is the most valuable asset you have. You take on some level of risk whenever you choose to invest your time in a potential business opportunity; however, you do so with the goal of increasing both the quantity and quality of your available time.
Risk and return are facets of the same coin. Even with zero risk and a positive return of X, there is still an opportunity cost associated with taking greater than zero risk and gaining greater than X return. Because of this, there is no real way to avoid taking risks.
There are opportunities, both positive and negative, and both involve taking a risk. Every claim on your future time (debt) diminishes your ability to take risks with your time. At a debt-to-assets ratio of 100 percent, all of your time is spent servicing debt, and you cannot afford to take any risks with your time.
This is where you begin to incur significant opportunity costs because there will be risks greater than zero that will yield a higher return than what you have, but you cannot take them.
Debt Decreases Your Ownership Satisfaction
The time you put into working to save for something increases your satisfaction with the item when you buy it. This is because we care about the things we invest in. Our time investment in something makes it more valuable to us.
Consider the following scenario: you buy a car after saving for it for seven years. You were carefully setting aside a portion of your income for this savings goal over the course of these seven years, and you also had time to learn everything you could about the car and alternatives. The fact that you waited seven years to buy this car will make it more enjoyable and make you feel like you've upgraded from whatever you were driving before you bought it.
You were able to research everything about it because of the time it took you to save up for it. You were able to get a price reduction by paying cash. Additionally, when you began using it, you took care of it by assigning enough money to cover the cost of ownership. All of this influenced the overall ownership experience.
Now compare this to a situation in which you buy the car on credit now and pay it off over the next seven years. First and foremost, you will not have the sense of building up to the purchase of the car, the anticipation, and the time you put into saving for it. This gives you a completely different feeling than if you had saved up for it.
However, once you begin using the car, you start paying for it and investing your time in it. The feeling of liking the car increases because you are working for it and paying for it in installments, but this is offset by the discovery of flaws in the car that you didn't have time to research and investigate because you jumped into debt quickly beforehand.
You also don't have a full sense of ownership yet, so you don't take good care of the car. This raises the cost of ownership in terms of the depreciation curve, and you begin to avoid looking into the actual market value of the car in relation to your overall debt balance for it (it may already be underwater). After a while, you end up with a car that is gradually becoming a burden rather than a joy.
Debt Increases Your Cost Of Ownership
We take better care of things we own outright. Taking less care of a debt-purchased item means deferring maintenance costs into the future, which will only increase them later. Because of this effect, the depreciation curve on something you bought with debt will be steeper than on an item you own outright and properly maintain in the best condition possible.
Even worse, you don't really feel like you own the item during the duration of the debt, and when you finally pay it off, it has depreciated so much that owning it doesn't feel as satisfying as it would if you had bought it with savings.
How Your Debt Affects Others
If you incur debt through the creation of fiat money, it affects others who are forced by the state to hold fiat debt instruments.
Your Debt "Steals" Purchasing Power From People Who Hold Fiat
When you take out a bank loan, you create new fiat money. Fiat money ceases to exist when you repay the loan or default on it. The only reason this system works is because of the state's violent coercion, which mandates the use of fiat money in the marketplace through legal tender laws, tax collection in fiat money, and requirements for large financial institutions to hold a certain amount of government bonds in their portfolios.
This effectively means that the only reason debt is monetized globally is due to state coercion. Thus, when you incur debt through any of the fiat-licensed institutions, you effectively leverage the state's coercive power to transfer your credit risk to fiat money holders. Your credit risk will eventually manifest as widespread price inflation.
Inflation is the most regressive form of taxation because it disproportionately affects the poor. Poor people have the majority of their net worth in liquid fiat cash, whereas wealthy people have only a small portion of their net worth in liquid cash.
If the negative effects of debt on yourself aren't convincing enough, try meditating and reflecting on what your debt does to others. You can easily accomplish this by simply observing the world around you and drawing logical conclusions. Reading "Fiat Standard" and "Principles of Economics" by Saifedean Ammous will help with this.
Debt-induced economic distortions and societal decline include:
Real Estate Monetization: Overbuilding, ghost cities, and declining building quality.
Capital Misallocation: Zombie companies, "climate crisis" grifts, "fiat hysteria," state-adjacent parasitic business models, fiat food industrial complex, pharma-industrial complex, military-industrial complex, fiat academia/media complex.
Business Boom & Bust Cycles: Financial crises resulting from mismanaged debt.
Price Signal Distortions: Worsened economic calculations due to inaccurate market signals.
State Protectionism: Lowered competitiveness due to state intervention.
Funding of State Wars: Debt contributes to the financing of state-led wars.
State Welfare Programs: Funding welfare programs that perpetuate poverty.
State Bureaucracy Growth: Increased regulatory burden hampers innovation.
Funding of "Fiat Fuels": Contributing to overall energy use decline.
Civilizational Decline: Overall societal decline driven by misallocated resources and distorted economic incentives.
By incurring debt, you contribute to these broader economic and societal issues, exacerbating problems that affect everyone.
Debt and Bitcoin Are a Dangerous Combination
Having both debt and Bitcoin on your balance sheet is extremely risky for your net worth management. Staying in debt during Bitcoin bull runs could lead you to FOMO (fear of missing out) into more debt to increase your Bitcoin exposure. Staying in debt during Bitcoin bear markets could lead you to panic and reduce your Bitcoin exposure to stay solvent and avoid bankruptcy.
The only wise approach is to pay off all your debts first and then begin accumulating Bitcoin with zero debt on your balance sheet.
If You Have Debt And Hold Bitcoin, You Risk Losing in Multiple Ways
You may believe that you are profiting from the difference between the interest rate you are paying on debt and the annual growth rate of Bitcoin. However, if you believe this, you are overlooking or forgetting several issues.
Opportunity Cost of Stress: The stress resulting from this strategy has a significant opportunity cost. Managing debt and Bitcoin simultaneously can be mentally taxing and can affect your overall well-being.
Increased Cost of Ownership: Having less money for maintenance of the item you purchased with debt results in a higher real rate of depreciation. This means the item may lose value faster than if you had purchased it outright.
Missed Opportunities for Generosity and Income: Debt restricts your ability to increase the spirit of generosity and income. When you are burdened by debt, you have fewer resources and less freedom to invest in opportunities that could enhance your income and personal growth.
Moreover, your perception of the value of the item you financed may shift over time. If your initial assessment of a product is off, you may end up with something you don't like but are still obligated to pay for.
Additionally, Bitcoin's volatility can derail your plans. If Bitcoin's value rises and you haven't paid off your debt, you may feel compelled to take on even more debt to "chase the pump." Conversely, if Bitcoin's value drops, you may panic and sell at a loss to stay solvent.
The added pressure of having to make payments on an asset you can no longer afford means you'll be less satisfied with your possessions than you would be if you didn't have any debt to worry about. The only wise approach is to pay off all your debts first and then begin accumulating Bitcoin with zero debt on your balance sheet.
When You Become Debt-Free, the Transition from Fiat to Bitcoin Standard Eases for Everyone
When a commercial bank extends credit, it effectively increases the money supply. Conversely, when you pay off a loan or go into default, the money supply decreases. By repaying your bank loan, you reduce the supply of fiat money, boosting the purchasing power of those who still have fiat in their cash accounts. For everyone else, you raise the interest rate on borrowing, which lowers their desire to do so.
Living debt-free for as long as possible helps lessen the need for the printing of new fiat money. By being debt-free, you indirectly increase the cost of borrowing for all borrowers, which discourages debt accumulation.
People convert their current money to Bitcoin (increasing the Bitcoin spot price), but they can also convert their credit to Bitcoin (leveraged Bitcoin buying, going into debt to buy Bitcoin, or buying Bitcoin while still having debt on the balance sheet). However, credit-funded Bitcoin purchases result in more extreme parabolic price movements, which, when exhausted (when users can no longer take on additional debt), lead to even more extreme Bitcoin price crashes due to the liquidation cascade effect.
Without debt, the process of monetizing Bitcoin would be more stable. The greater demand you have for holding Bitcoin cash balance makes it more valuable, which encourages others to follow suit. If you do this without incurring debt, it becomes even more appealing for lenders to sell their loans and invest in Bitcoin instead.
If people had less debt, there would be less capital misallocation and less government funding, leading to more accurate free market signals and, ultimately, a more prosperous civilization.
There are three commonly discussed debt-reduction strategies:
Debt Snowball Method:
Order your debts from smallest to largest.
Make the minimum payment on all but the smallest debt, where you pay the most.
This method builds momentum by paying off small debts first, providing motivation to tackle the next one.
If you only have a choice between these three methods, I'd recommend this one.
Debt Avalanche Method:
Order your debts by the size of their interest rates.
Pay the minimum on all but the debt with the highest interest rate, where you pay the most.
Mathematically, this is the quickest way to get out of debt.
However, it can be the most difficult to maintain psychologically.
Debt Consolidation:
Take on new debt with a single interest rate and duration to pay off all your existing debts with different maturities and interest rates.
This is the easiest method, but it often involves choosing a longer maturity term for your debt, resulting in smaller monthly payments but keeping you in debt for a longer period.
My advice: Sell off whatever assets you can and pay off your debt as soon as possible. You will benefit most from spending the least amount of time in debt. After that, you can proceed to the next phase, which will increase your inflows by allocating 10% to 20% of your budget to the Giving category.
If you are not convinced about this approach, I would advise you to continue managing your budget and attempting to make ends meet while retaining your Bitcoin. You can try any of the three mentioned strategies to speed up the process. However, the volatility of Bitcoin may eventually force you to decide to pay off your debt for good, even if it means a big change in your lifestyle.
Stay Debt-Free
Never use credit cards.
Never borrow money under any circumstance.
Never use "buy now, pay later" schemes.
Only spend money from the past.
Have at least a third of your net worth in cash balance (high liquidity/salability).
Pay invoices immediately upon receipt.
Never try to collect airline miles or fall for cashback offers by credit cards.
Never try to get "deals" by making payments instead of purchasing the item outright.
Never fall for the idea that "there is good debt and bad debt." All debt will have the same spiritual consequences, which you want to avoid at all costs.
By following these guidelines, you can achieve and maintain a debt-free lifestyle, allowing you to focus on building wealth and improving your financial well-being.
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