The NY Fed, Federal Reserve, Bureau of Economic Analysis, and Morgan Stanley put out a series of fascinating household debt charts we should all be aware of.
Excessive debt is what makes extremely rich people go broke. Leverage is what crushed the economy once the music stopped playing in 2008. But boy is debt nice when properly used to grow one’s net worth in a bull market.
Everybody should have the goal of being debt-free by the time they are no longer able or willing to work, no matter how low the interest rate. Having enough passive income to cover all your expenses while owing nothing to anybody is financial freedom at its finest.
Let’s take a look at the charts and see if we can uncover some wisdom.