The must-try money hack to boost your net worth while crushing debt

Here's the secret to maximizing your net worth while paying off debt.

Transcript

00:00What I have instructed my clients to do, which has worked really well, is gather anything

00:05that's going to grow your net worth into this one category called Strive.

00:09And so that includes the investments and savings, but it also includes paying down debt.

00:14And so what that really helps people realize is that there is a trade-off between investing

00:18and paying down debt.

00:19But specifically, if you pay down your debt and you make sure that you do it early enough

00:25and not let it linger forever, debt can become a short-term solution, not a long-term lifestyle.

00:29And so I really strongly encourage people to bucket everything that grows your net worth

00:33into that one same section of your budget so that you can see, well, maybe it is time

00:37for me to pause on doing investing just in the short term in order to pay down this very

00:41high-interest debt.

00:42Or it might also indicate to us that we might need more savings.

00:45In the book, I talk about having at least one month's worth of a cash flow cushion sitting

00:50in your checking account.

00:51What I found was that a lot of people get into credit card debt because they don't have

00:53enough cash on hand.

00:55And when they put it into a high-yield savings account or into a savings account, they almost

00:58feel like they have to break glass to go get it.

01:00And so they'll accrue stuff on the credit card.

01:02So if you have one month's worth sitting in your checking account that helps you stop

01:06living paycheck to paycheck, it reduces the likelihood that you'll get into credit card

01:10debt.

01:11And so building up that one month's worth of cash flow cushion helps you pay down debt

01:14faster.