The Shocking Truth… Most Wealthy People Do Have Debt! (How they plan and use their money differently)

Available for Interviews: Lauren Oschman

Lauren Oschman, CFP® is a certified financial planner specializing in financial strategies, tax planning, and is an expert in helping physicians manage their finances.

What Lauren Oschman can say in an interview on
Debt Strategies of the Wealthy:

      • Public opinion puts a lot of emphasis on being debt-free, but interestingly when you look at many wealthy and financially successful people’s balance sheets, they DO have debt, and sometimes lots of it! 
      • The secret to wealth doesn’t lie in being debt-free, but rather in using each dollar to accomplish its most valuable purpose. 

      • There is a difference between “good” debt (student loans, mortgages, and car loans are great examples) and “bad” debt (namely credit cards). Wealthy people know the difference. Using and maintaining “good” debt can allow them to put their dollars to a more valuable purpose.  
      • I’ll share 2 examples where many wealthy people would choose to use or maintain the debt: 

New home. Let’s say you have the opportunity to pay cash for a new home or to take out a mortgage. Your mortgage would come at a 3.5% interest rate for 30 years, whereas your investment account has been averaging 8% p/year for you over the past 10 years. Because the mortgage costs you less interest than you make in your investment account, fast forward 20 years and you have built more wealth by remaining invested and using debt to float your house. Many wealthy clients I work with would finance that home and let their investments continue earning them exposure to the higher return.

Student loans. Let’s say you have $100k of student loans that you have refinanced at a 4% interest rate. Your diversified investment account is projected to earn you a 8% p/year on an average rate of return if you base it on historical data. If you have additional funds beyond your minimum payment, you could save yourself the 4% by paying off your loans early, or you could invest and likely earn a higher rate of return. Again, many of my financially successful clients are maintaining their student loans and favoring investment contributions because they feel that will earn them more return on their money over time. 

      • A huge caveat here is you have to manage your cash flow! If you are in over your head, you can’t get wealthy by using debt to get above water. However, if you have a good handle on cash flow and are looking for the most valuable use of your cash to build wealth over time, especially in 2021’s low interest rate environment, debt can be a great tool to help you make best use of the dollars you have to put to work.

 

Interview: Lauren Oschman

Lauren Oschman, CFP® is a financial advisor for some of the nation’s highest caliber physicians. She holds an economics degree from Vanderbilt University and completed her financial training at Emerson University. Along with these prestigious degrees, Oschman has over a decade of expertise in financial matters for high net worth individuals. 

Oschman delivers financial education programs to medical residents & fellows nationwide (Vanderbilt, Dartmouth, Rush, OrthoCarolina and many others), has built a $1 million revenue financial planning business, and co-founded Vestia Personal Wealth Advisors, and is an expert in helping physicians attain their financial goals—and has a niche passion for working with high-caliber female surgeons, and volunteers as a CFP® WIN (Women’s Initiative) Advocate to raise awareness about the profession for young women.

Her decade-long experience as an accomplished financial advisor and executive has led to her being a sought-after speaker for financial workshops throughout Alabama, Georgia—and Tennessee, where she has happily resided with her husband and two young children.

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Jo Allison
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Jo@SuccessInMedia.com

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