Latest / Go Big with Gib Podcast / Ep 130. The Most Underrated Investment? Paying off Debt

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Ep 130. The Most Underrated Investment? Paying off Debt · Go Big with Gib Podcast

• 0:00
  SPEAKER_00: Welcome to the Go Big With Gibb podcast, where we talk to professionals, business owners, and entrepreneurs about their big wins.
• 0:09
  SPEAKER_00: Everybody wants to talk about the next big investment, the next crypto run, the next real estate deal, the next 10x stock.
• 0:16
  SPEAKER_00: But today I want to talk about something far less exciting and far more powerful paying down debt.
• 0:22
  SPEAKER_00: Because one of the biggest financial mistakes I see people make is chasing speculative returns while carrying expensive debt obligations in the background.
• 0:31
  SPEAKER_00: And sometimes the best investment you can make is the one that guarantees a return.
• 0:36
  SPEAKER_00: Here's the problem.
• 0:37
  SPEAKER_00: Most people emotionally associate investing with accumulation.
• 0:40
  SPEAKER_00: Buying assets feels productive.
• 0:43
  SPEAKER_00: It feels exciting.
• 0:44
  SPEAKER_00: Hosting a new deal gets attention.
• 0:46
  SPEAKER_00: Nobody brags online about paying off a line of credit, but financially, reducing high interest rate debt can be one of the highest yielding investments available.
• 0:54
  SPEAKER_00: Let me explain.
• 0:55
  SPEAKER_00: If you're carrying debt at 10% interest and you pay that debt off, you have just achieved a guaranteed 10% return.
• 1:02
  SPEAKER_00: Guaranteed.
• 1:03
  SPEAKER_00: No market risk, no volatility, no hoping, no praying that the market cooperates.
• 1:09
  SPEAKER_00: Meanwhile, people are taking borrowed money and deploying it into speculative investments, hoping to outperform their debt costs.
• 1:16
  SPEAKER_00: That works beautifully until it doesn't.
• 1:18
  SPEAKER_00: One thing I've learned over time is this people dramatically underestimate risk during good times.
• 1:24
  SPEAKER_00: They assume the market will continue rising.
• 1:26
  SPEAKER_00: They assume liquidity will always exist.
• 1:28
  SPEAKER_00: They assume that they'll be able to refinance later, but leverage compresses your margin for error.
• 1:34
  SPEAKER_00: And once you start paying significant interest expense every single month, your investments have to clear a high hurdle just to break even.
• 1:41
  SPEAKER_00: Think about this.
• 1:42
  SPEAKER_00: If you have a loan costing you 11% annually and you make an investment returning 7%, you're not actually winning.
• 1:49
  SPEAKER_00: You're moving backwards.
• 1:50
  SPEAKER_00: Now, yes, there are absolutely situations where leverage makes sense.
• 1:54
  SPEAKER_00: Long-term fixed rate debt on a quality real estate asset.
• 1:57
  SPEAKER_00: That can be incredibly powerful.
• 1:59
  SPEAKER_00: Strategic business debt, sometimes necessary.
• 2:02
  SPEAKER_00: But there's a major difference between productive leverage and consumer style financial pressure disguised as investing.
• 2:08
  SPEAKER_00: What people don't want to talk about enough is the emotional freedom that comes from reducing debt.
• 2:13
  SPEAKER_00: Your stress level drops, your required monthly burn decreases, your flexibility increases, and most importantly, you stop making desperate financial decisions.
• 2:23
  SPEAKER_00: A lot of investors are not making rational decisions.
• 2:25
  SPEAKER_00: They're making pressure-driven decisions because they overleverage.
• 2:29
  SPEAKER_00: And pressure destroys clarity.
• 2:31
  SPEAKER_00: I've experienced this personally.
• 2:33
  SPEAKER_00: When debt obligations get too high, every market fluctuation feels amplified.
• 2:38
  SPEAKER_00: Every downturn feels catastrophic.
• 2:40
  SPEAKER_00: But when debt is reduced, you gain patience, you gain staying power.
• 2:44
  SPEAKER_00: And staying power is one of the greatest advantages in investing.
• 2:47
  SPEAKER_00: So before you jump into the next speculative investment opportunity, ask yourself this What guaranteed return could I achieve by paying down debt first?
• 2:56
  SPEAKER_00: Because sometimes the smartest move is not chasing another investment, it's strengthening your foundation.
• 3:01
  SPEAKER_00: There's nothing flashy about financial discipline, but discipline is what creates long-term wealth.
• 3:06
  SPEAKER_00: If you enjoy this episode, share it with someone who's constantly chasing the next opportunity while ignoring the liabilities already sitting on their balance sheet.
• 3:15
  SPEAKER_00: And don't forget, subscribe to the podcast and join our newsletter.
• 3:19
  SPEAKER_00: Until next time, go big or go home.
• 3:25
  SPEAKER_00: Thank you for listening to this episode of Go Big with Gib.
• 3:28
  SPEAKER_00: If you haven't already, go follow us on social media at GibIons.
• 3:32
  SPEAKER_00: We'll see you next time.