The wife and I have been working through the Total Money Makeover (affiliate) and I’m happy to say we’re debt free (which doesn’t count the mortgage). Now we weren’t ever in huge amounts of debt. We had a car payment, but that’s about it. We haven’t carried credit card debt in years.

Now read this paragraph out of a great article about founders:

A person who is $50k in debt has a very hard life. They have no budget for luxuries or means to try and improve their life. They eat the cheapest foods and aren’t able to travel. A person with $0 debt, but $0 savings has a quality of life worlds different. They may not have luxuries, but they have way more comfort and abilities to improve their life. Somebody with $50k in the bank is again dramatically better off than somebody with $0… And the quality of life dramatically increases again when you have something like $500k in the bank. That person is able to enjoy high quality foods, travel, live in luxurious comfort and use their capital to try and make their and those close to them lives better. A person with $5M does enjoy a higher quality of life, but not as dramatically better… they might fly in chartered planes vs first class, or drive a $120k car instead of a $70k car, but overall their quality of life is similar. And the increase in quality of life dramatically tapers off as you get to somewhere like $50M. I’ve personally experienced most of these levels of wealth, and while I haven’t yet experienced the very top levels I’ve spoken to friends that are there and generally they agree.

The article has much more to say than this section on money, but I’m standing at the $0 in debt mark and I know it’s true. We went from always feeling like things were tight to feeling a sense of relief and freedom.

It’s not like we’re suddenly loaded and can just go purchase what we want, but we are on our way to building real wealth.

If you haven’t read the Total Money Makeover, it’s totally worth it. If you run a business you should take all of these items to heart as well. Save your business money, have lots of cash on hand so you can take advantage of opportunities as they come up.

A business in debt is a dead business.