Good Debt Follow Up
After our inaugural broadcast we thought it would be a good idea to break-down the premise of “good debt” here on the blog where it is a bit easier to see. By way of definition (for those who haven’t listened to Our Pilot Episode):
Good Debt - Debt used to create more wealth than is lost due to interest on the debt. (Debt that works for you.)
Some examples of good debt are quite simple: taking out a loan from the bank at 5% per year, to invest something that pays 12% per year. It’s important to make sure that whatever you invest in has as little risk associated with it as possible with a near-guaranteed pay-out. This way, you won’t be on the hook for money that you lost. (This is, of course, unless you wish to risk the money for a potentially higher return. Risk always equals reward.)
Some examples of bad debt are also really simple: credit card debt for new clothes, car loans - and any other debt you are paying interest on with no return to yourself or your pocket book.
There’s an expression that James used in the show, “debt is money”, debt can be used to make money - or you can use it to help make banks rich. It’s your choice. So - what’s your debt doing for you?
Going Green
It’s no big surprise that there is currently a huge cultural and social movement toward “green”. Like any movement, there is apparently money to be made, as Tim Ferriss points out in a recent blog post. The financial angle on this post caught my eye and I thought it an interesting read, and worth sharing with Debt Today Money Tomorrow fans: “The Unusual ROI of Going Green“.
My First Million Launches
James White’s second book, My First Million, is being released at The Book Expo of America this coming May 29 to June 1, 2008. The BEA is a massive book convention and James will be there to meet the attendees and talk about his latest book venture.
Debt Today Money Tomorrow will also be along for the ride recording a special episode while on-site at the convention. Our booth number is 607, so if you happen to be attending the expo, be sure to stop by our booth. We’ll be talking to authors and taking financial questions from the guests.
If you aren’t attending the expo, you can still pre-order your copy of My First Million by visiting amazon.ca, or amazon.com
My Meeting With Mark Victor Hansen
Wow! The past few days have been a complete blur down here in Los Angeles. This event (the BEA) was ridiculously huge - over 30,000 people and hundreds of exhibitors. I won’t bore you with all the little details (suffice to say James signed a ton of books and met a lot of people), but I will tell you about the highlight of the event for us: meeting Mark Victor Hansen of Chicken Soup for the Soul fame. He was at the conference promoting his new project, youpublish.com.
Mark stopped by to introduce himself to James and talk about a few projects. James shared his knowledge of banking and finance and Mark talked about the publishing industry. As he was leaving we took this picture and got this great testimonial from him. Check it out…
“I see James as the smartest, wisest and most brilliant, young, value-creating entrepreneur on the planet. He is destined to create financial freedom for all.”
-Mark Victor Hansen
Creator of Chicken Soup for the Soul
MarkVictorHansen.com
We also took the time to create a profile for Debt Today Money Tomorrow at Mark’s new web-site. You can see our profile here.
And I’ll be posting again in a couple of days with some video clips.
Question & Answers from James T. White
James and I love receiving your questions here at DTMT and via our phone system (888-307-2226). We work hard to include most of these questions in our program and a lot of them are coming up in future episodes but every so often a few questions don’t quite fit into the show. Don’t worry - we still want to help…so with us flying down to the BEA to launch James’ book it gave us some time to go over two such questions…here are the questions (with answers from James):
What’s your view of young entrepreneurs starting businesses online such as eBay stores or just their own interface? I am a 23 year old business degree student and run several online stores. Do you think that this a good pursuit or would you recommend something else that is more in my field (management). Thanks.
James White’s Answer: As far as online stores it a great idea, because generally you can keep the same markup on products, and maybe even beat your competitors store prices because your overhead is low – the only problem with online stores in my opinion is that it takes a great deal of marketing dollars to drive people or leads to the web site, and then those leads have to be converted in order to sell the products and therefore many people have a hard time with advertising dollars and don’t do as well as possible. One of the reasons why only some stores such as amazon.com or eBay have done so well is they have completed IPO or have raised millions of dollars to drive people to the site, and from their visitors experiences it drives back customers – I would suggest you stick to your guns and try and make it work, figure out great ways to advertise the site.
From an analysis of your web site, I notices that the contact information under “contact us” only has your e-mail address and is not even the site address, it’s a Hotmail address with no mailing or phone number. The only problem is as a consumer it does not make me feel safe, even if it is, the perception is far different and may drive away customers.
As far as your career questions, I would do what you feel comfortable with, but always follow your dreams, even if not successful right away, follow your dreams, and the worst thing that can happen is you use your degree to fall back on in a worst case scenario (a job).
What is your position on the Canmore real estate market? (Note from Donovan: Canmore is a town about an hour outside of Calgary, Alberta, Canada - James’ home town - which a lot of tourists and skiers visit every year. Also, a personal favorite vacation spot of mine.)
James White’s Answer: Canmore is very close to where I live and I know a little bit about the real-estate market in Canada and the United States. My opinion is real-estate is one of the highest risk investments you can buy, even higher risk than stocks, bonds, or mutual funds, the reason? Stocks and other equities you can generally sell quick for cash, with homes it is harder because people have to qualify and if economy is not that great you may never sell it, with stocks you may take a loss but you generally can sell the equities. If you’re buying a vacation home or revenue property do some analysis on expenses and income, if you’re going to be a personal property then that’s your choice, but think about the economy and the risks associated with buying in a region where the jobs cannot support the home or commercial real-estate prices.
Thanks for the questions - keep them coming!
