Thoughts on debt

I've paid for all of my coaches (so far) with a credit card. I used my credit cards as start-up capital for my business.

…did your palms get sweaty at the thought of putting that much money on credit?

For a few minutes, I want to challenge everything you've ever thought about debt. This isn't just about interest rates and responsible spending. This is about racism, sexism, and who has access to wealth. This is about the ways we use neutral circumstances (like debt) to tell ourselves we are bad, not good enough, or irresponsible.

It's important. Stay with me.

Good vs. bad debt

1. Mortgages, student loans, and small business loans are traditionally considered responsible, good forms of debt. It makes sense to us that to build long-term wealth, we have to take on some short-term debt in these specific instances. These forms of debt come with some of the lowest interest rates available. Consider, for a minute:

• Who, traditionally, has always had access to ‘good’ debt?

• Historically, who determined interest rates and eligibility?

• Who, traditionally, was not allowed access to these forms of debt?

• Who used ‘good’ debt to build intergenerational wealth?

2. Credit card debt is traditionally considered the worst type of debt. It’s often associated with impulse buys, irresponsible budgeting, and living outside of your means. It also comes with some of the highest interest rates of all debt available.

• Who, traditionally, has only had access to ‘bad’ debt?

• What systems or groups of people would benefit from people believing that credit card debt is irresponsible or bad, even if it's the only form of debt available to them?

Let’s pause here quickly.

There's always risk associated with debt. I'm not a financial advisor. I am not advising you on your finances. But I want you to consider this:

It is convenient, at the very least, that the debt that is most available to the majority of humans and minority groups also comes with the highest interest rates and the worst reputation.

Debt has always been a short-term tool used to create long-term wealth.

The richest 10% of the global population take home 52% of the world's income. The poorest half of the global population take home 8% of the world's income.

You won't earn enough money to qualify for the good debt. And you'll be irresponsible if you use the debt available to you.

This is a rigged game.

For many people, credit card debt is the only form of start-up capital available to do what you love. If I hadn't invested when I did, I'd still be saving to work with my first coach, I'd never have gotten certified, and my business would be a pipe dream.

Credit card debt is not inherently irresponsible.

It's inherently irresponsible that we still have a system where low-interest debt is inaccessible to everybody. It is inherently irresponsible that we've associated different types of debt with moral goodness or badness.

Yes, there is always a level of risk associated with debt.

But it might be the right start-up capital for you.

You get to decide.