The Value of Debt
How to Manage Both Sides of a Balance Sheet to Maximize Wealth
Published on 3. September 2013
272 pages
978-1-118-75863-2 (ISBN)
Description
A New York Times bestseller and one of the Ten BestBusiness Books of 2013 by WealthManagement.com, this bookbrings a new vision of the value of debt in the management ofindividual and family wealth
In this groundbreaking book, author Tom Anderson argues that,despite the reflex aversion most people have to debt--anaversion that is vociferously preached by most personal financeauthors--wealthy individuals and families, as well as theirfinancial advisors, have everything to gain and nothing to lose bylearning to think holistically about debt.
Anderson explains why, if strategically deployed, debt can be ofenormous long-term benefit in the management of individual andfamily wealth. More importantly, he schools you in time-testedstrategies for using debt to steadily build wealth, to generatetax-efficient retirement income, to provide a reliable source offunds in times of crisis and financial setback, and more.
* Takes a "strategic debt" approach to personal wealthmanagement, emphasizing the need to appreciate the value of"indebted strengths" and for acquiring the tools needed to takeadvantage of those strengths
* Addresses how to determine your optimal debt ratio, or yourdebt "sweet spot"
* A companion website contains a proprietary tool for calculatingyour own optimal debt ratio, which enables you to develop apersonal wealth balance sheet
Offering a bold new vision of debt as a strategic asset in themanagement of individual and family wealth, The Value ofDebt is an important resource for financial advisors, wealthyfamilies, family offices, and professional investors.
More details
Other editions
Additional editions
Book
10/2013
Wiley
€39.50
Shipment within 15-20 days
Person
Thomas J. Anderson has an MBA from the University of Chicago and a BSBA from Washington University in St. Louis, where he majored in finance and international business. He has participated in programs at the London School of Economics, Cass Business School at City University London, ESCP Europe, and the Wharton School of the University of Pennsylvania. Tom worked in investment banking in New York before moving into private wealth management. Tom has received multiple distinctions and prominent national recognition for his wealth management accomplishments. His extensive academic studies at some of the top schools in finance and economics, international experience, and institutional background bring a unique perspective to delivering advice to the individual and on The Value of Debt.
Content
- Intro
- The Value of Debt: How to Manage Both Sides of Your Balance Sheet to Maximize Wealth
- Copyright
- Content
- Foreword
- Acknowledgments
- Introduction
- Not about Buying What You Can't Afford, but about Strategy
- The Book's Real Goal
- Part 1: The Value of Debt in the Management of Wealth
- Chapter 1: Strategic Debt Philosophy: An Overview
- How This Book Can Add Value to Your Life
- The Five Tenets (or Action Principles) of Strategic Debt Philosophy
- First Tenet: Adopt a Holistic (Comprehensive)-Not Atomistic-Approach
- Second Tenet: Explore Thinking and Acting Like a Company
- Third Tenet: Understand Limitations on Commonly Held Views of Personal Debt
- Fourth Tenet: Set Your Sights on an Optimal Personal Debt Ratio
- Fifth Tenet: Stay Open-Minded, Ask Questions, and Verify What Works
- Chapter 1: Summary and Checklist
- Checklist
- Chapter 2: The Basic Idea: Limiting the Costs, the Impacts, and the Duration of Financial Distress
- Risk of Financial Distress
- The Direct and Indirect Costs of Financial Distress
- The Impact of Financial Distress: Five Levels
- The Duration of Financial Distress
- The Four Indebted Strengths: A First Look
- The One Thing You Must Consider!
- Chapter 2: Summary and Checklist
- Checklist
- Chapter 3: Strategic Debt Practices: An Overview
- Understanding and Taking Advantage of Strategic Debt Philosophy
- Achieving and Maintaining an Optimal Debt-to-Asset Ratio
- Calculating Your Debt-to-Asset Ratio
- Should Your Primary Residence Be Included in Your Debt Ratio?
- When to Pay Down Your Debt, and When Not To
- Advanced Practices and Scenarios
- Chapter 3: Summary and Checklist
- Checklist
- Part 2: The Assets-Based Loan Facility
- Chapter 4: The Value of an Assets-Based Loan Facility (ABLF)
- What an ABLF Is and How It Works
- The Many Advantages of Having an ABLF in Place
- Why Virtually Every Company Has a Line of Credit
- Surviving Storms and Other Natural Disasters
- The Criticality of Being Proactive and Assessing Risks
- Family Finances: First Bank of Mom and Dad
- Elder Care Bridge Loan
- Taking Advantage of Opportunities and Distressed Sales
- Average ABLF Usage and the Win-Win-Win Scenario
- Chapter 4: Summary and Checklist
- Checklist
- Part 3: Scenarios for Success
- Chapter 5: Long-Term Wealth Amplification through Capturing the Spread
- The Basic Concept: Inherent Risks with Great Potential Rewards
- Three Key Factors to Consider
- Some Scenarios for Capturing the Spread
- Synching with Your Investment Strategy
- Chapter 5: Summary and Checklist
- Checklist
- Chapter 6: Holistic Financing of the Expensive Things You Need and Want
- A Better Way to Buy: In the Company of Holistic Financial Thinkers
- Four Principles When Financing the Purchase of a Desired Item
- A Better Way to Purchase a Vehicle (or Almost Anything Else)
- Purchasing a Second Home: Pluses and Minuses
- Depreciation
- Taxes and Operating Costs
- Cost of Funds (direct or opportunity cost)
- Up-Front Transaction Costs
- Liquidity (the ability to sell at a good price when you want or need to)
- 100 Percent Financing: The No Down Payment Real Estate Purchase Option
- Chapter 6: Summary and Checklist
- Checklist
- Chapter 7: Generating Tax-Efficient Income in Retirement or Divorce
- Introduction: Three Goals (and Some Disclaimers)
- An Opening Scenario for No Taxes in Retirement
- Borrowing Versus Selling to Access Your Money
- A Better Alternative to a Familiar Story
- Tying It Back to Capturing the Spread
- Revisiting Tax Issues
- Making Use of Strategic Debt Strategies and Practices in Divorce
- Chapter 7: Summary and Checklist
- Checklist
- Chapter 8: Conclusion: What This Book Is Really About
- What We Hope You Have Taken Away
- Strategic Debt as a Financial Engine over the Decades
- Paradoxes of Plenty: Some Surprises in Maintaining an Ideal Debt Ratio
- Investing in the Future: A Cautionary Reminder
- A Final Thought
- Chapter 8 Summary: A Recap of the Book's Significant Lessons
- Part 4: Appendixes
- Appendix A: The Varieties of Debt
- Appendix B: Strategic Debt Practice for the Young and Those with Limited Assets
- First Guideline: Now You're in the Accumulation Phase
- Second Guideline: Beware of Ongoing Credit Card Debt
- Third Guideline: Keep Enough Liquid Cash Reserves on Hand
- Fourth Guideline: Maximize Your Retirement-Related Investment Opportunities
- Fifth Guideline: Focus on Accumulating Investment Assets
- Sixth Guideline: Deprioritize Paying Down Your Mortgage
- Seventh Guideline: Consider Renting instead of Owning
- Example 1: The Lucky One
- Example 2: The Unlucky One
- Eighth Guideline: Lower Assets May Be Okay for an ABLF
- Appendix C: No Guarantees: Limiting the Risks of Investing in a Crazy World
- Risky Business
- Are You Prepared for the Future? (Expanded from Chapter 5)
- Summary Steps Worth Considering
- Official Statement of Disclosure and Understanding
- With Respect to ABLFs
- Additional Important Notes
- Appendix D: Some Examples of Ideal Debt Ratios
- Scenario 1: "I'm an Accumulator-No Debt for Me!"
- Scenario 2: More Established, Still Working
- Scenario 3: Higher Net Worth, Loves Real Estate
- Scenario 4: Ultra-High Net Worth Family
- Never Pay Down Debt?
- Glossary
- Bibliography
- About the Author
- About the Companion Website
- Index
