physicianfinancialsuccess.com/garrett-gunderson-best-selling-author/ Josh Mettle: Possibly the hardest for me to learn personally as I began accumulating rental properties. One day I had the realization as we were sitting down, going over our monthly profit and losses for our rental properties that my monthly debt on those properties, the debt service on those mortgages was greater than my personal non-rental income. That was kind of a scary moment, and so Garrett, I want you just to volley this one back at me. Obviously, we know debt is bad, debt is dangerous, and debt is scary. We should keep out of it altogether, right? Garrett Gunderson: What? Well, check this out. We have to define debt first of all because everyone, it’s kind of like you know how there’s a tissue and there’s Kleenex, and one of them is a brand, but we kind of refer to them either way, and they both mean the same thing. That’s maybe not the best example, but we do the same thing with debt and loan. We confuse debt and loan, and so here’s the technical definition of debt by generally accepted accounting principles, by textbook definition, debt is simply when we look at a balance sheet, which is your assets and your liabilities. If you have more liabilities than assets, that’s called debt. That is a bad place to be. You know it means than you owe more than you have if you liquidate everything. That’s scary. That’s something to definitely avoid, but when you have more assets than you have liabilities, you actually have equity, more assets than liabilities is equity. Let’s just say that you have a neighbor and they’re like, “We need to sell our home today. We’re willing to sell it for half of the appraised value.” If you have to get a loan to buy that home, are you in equity or are you in debt? I would say you’re in equity if you bought it for half of the appraised value. To see the rest of this transcript, please visitphysicianfinancialsuccess.com/garrett-gunderson-best-selling-author/. www.freedomfasttrack.com www.askthemoneynerds.com To subscribe to Physician Financial Success, please go to: itunes.apple.com/us/podcast/physician-financial-success/id840402872 www.utahphysicianhomeloans.com Offering physician home loans (and loans for non-physicians, too!) in AL, AR, AZ, CA, CO, FL,GA, ID, IL, IN, IA, KS, KY, LA, MI, MN, MS, MT, ND, NE, NM, NV, OK, OR, SC, SD, TN, TX, UT, WA, WI, WY Contact us today! 801-747-0200 Josh Mettle 801-747-0200 NMLS #219996 CA-DOC #219996 Equal Housing Lender 801-747-1210 Citywide Home Loans NMLS #67180 801-747-0200 Copyright© 2014 JLM Industries All Rights Reserved

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