Risks WHEN TACKLING DEBT
My father and I had an amazing nine year run as successful entrepreneurs, building a two-time Inc. 500 company, then 2008 hit, and we suffered devastating losses. Within six months, we went from owning one of the 500 most successful, fastest growing private companies in the United States; to losing everything - and I mean EVERYTHING.
I was only 44 and I had time to recover. However, my father did not. He had just turned 65 years old, and in a blink of an eye he lost virtually everything he worked for his entire life. 40 years of work, sacrifice and savings - and in six months, it was all but gone. I understand, first hand, the devastating impact when losses are incurred... at the wrong time.
CASH FLOW Risk
Paying off too much debt too quickly can leave you without enough money for daily expenses or emergencies. Without proper budgeting, you may end up relying on credit cards or loans again, creating a cycle of debt.
FLEXIBILITY Risk
Putting all your money into debt repayment without considering future financial needs can limit your options. If an opportunity arises, like buying a home, investing, or starting a business, you might not have the financial flexibility to take advantage of it.
EMERGENCY Risk
Using all available funds for debt repayment without keeping an emergency fund can be dangerous. Unexpected expenses like medical bills or car repairs can force you to take on more debt, setting you back even further.