Why Debt Is Dangerous, Diversification Matters, and Smart Choices Build Real Wealth

If there’s one lesson I’ve learned from decades in personal finance, it’s this: real wealth comes from discipline, not luck. That’s why when I talk about investing, I make it clear—owning individual stocks isn’t investing. It’s speculation. Betting on one company to carry your financial future is a high-risk move. I’ve seen it all—Pan Am, Lehman Brothers, Enron. Companies that were once giants disappeared overnight. That’s why I recommend diversified investing. Own the market, not a single story. Spread your investments across industries, sectors, and even countries. Sure, it doesn’t eliminate all risk, but it does reduce the chance of catastrophic failure. Over time, a well-diversified portfolio aligns with long-term financial goals and helps you stay the course during market swings.

Now, let’s talk about bonds. Interest rates today may seem high, but they’re nowhere near the 15-18% we saw in the 1980s. Still, rising rates hurt bond values, and the big bull market for bonds is over. Holding long-term bonds right now could mean real losses in the years ahead. I’ve seen too many investors ignore this, especially with municipal bonds. Maryland bonds, for example, might seem stable, but their value is dropping in this environment. If you rely on bonds for income, look for safer, more liquid alternatives.

Michelle Singletary has a clear stance on debt—and I agree with her 100%. Debt is bondage. It limits your choices, eats away at your future, and adds stress to your life. She calls it slavery, and it’s not an exaggeration. You shouldn’t borrow money for cars or vacations. And if you do need a car, pay cash if you can. Keep the old one running instead of upgrading to something flashy you can’t afford. As for student loans, they’re the next financial bubble. We’ve got to stop pretending college prestige is worth six figures in debt. Michelle makes a great point: her daughter can go to Harvard only if scholarships cover the cost. Otherwise, it’s in-state or community college. That’s not settling—it’s being smart.

In fact, we both believe the best financial decision you can make for your children is to teach them responsibility, not entitlement. A highly motivated student at a state school will go further than an average one drowning in Ivy League debt. And if you want to help your kids, don’t bankrupt your future trying to pay for theirs. It’s not selfish—it’s survival.

Financial planning doesn’t require a finance degree. It starts with a simple truth: every dollar needs a job. Michelle recommends budgeting with purpose—assigning every penny to savings, bills, or investments before it gets spent. Don’t waste money on inflated data plans, streaming bundles, or UberEats every night. If you just paid off a car loan, keep “paying” that same amount into savings each month. That kind of discipline builds resilience. That’s how you get ahead.

I also want to speak directly to young adults struggling to find their financial footing. It’s okay if things feel hard right now. I promise, financial security doesn’t happen overnight. Ric tells college students all the time: avoid debt, live simply, and find joy in what’s free. Libraries. Parks. Your dreams don’t require luxury—just time and effort.

And if you’re rebuilding after a major life event—like divorce or bankruptcy—there is still hope. One woman asked about her underwater house and debt after divorce. I told her: let it go. Don’t hang onto the house just for emotional reasons. Talk to your lender. Consider a short sale. Start fresh. Your health, your job, and your future are more important than a house that’s dragging you down.

We also covered a great question from someone whose portfolio had 30% in bonds, including 20% in Maryland municipal bonds. I explained that long-term muni bonds are risky in today’s market. During the 2008 credit crisis, even these felt the pain. It’s time to rethink your portfolio and prioritize liquidity and safety if you rely on that money for income.

At the end of the day, our message is clear: don’t chase the biggest house, the flashiest car, or the fanciest school. Choose what aligns with your values. Save more than you spend. Invest with a long-term lens. Say no to debt. And build a life that gives you freedom—not just the illusion of wealth.

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