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Today's question comes from Eric. Great question by the way, he's wondering if his future real estate plan is reasonable and he writes in and says, hello, Marco, I have been listening to your podcast for a couple of weeks and have found your delivery of information, very easy to understand, thank you for your time and teachings, Eric.

Thank you. And you're welcome.

My current future plan is to purchase a townhouse in the next two years, start a family and then purchase a longterm home within the five following years, I intend to rent out the townhouse to provide another source of income and help pay off the new home. My conservative side wants me to only have one mortgage at a time due to a fear of having too much debt. And so I can have a higher cash flow. Therefore I would pay off the townhouse completely before starting a mortgage on a new home. My goal is to own four paid off income properties to supplement my job's income. Do you think this plan is reasonable and has the potential to generate a cashflow over $2,000 a month for the townhouse and home or house? I am looking between 150,000 to 250,000 for the townhouse and 300 to 450,000 for the house, respectively.  Additional rental properties can vary from say 100 to $200,000 each. Thanks again - Eric.

Okay, Eric. Well, thanks for the question. So your plan overall is great. I have a couple of issues with it, but essentially you're thinking about settling down, getting a home, starting a family, purchasing a home with a longterm perspective, but also starting off with a townhouse, which is less expensive and keeping it as a rental. That's a great way to start. So here is my comment. You're talking about your conservative side and having too much debt. So the first thing that flashed in my mind was Dave Ramsey and Susie Orman. You know, the issue I have with people saying that debt is either bad or I have too much debt is they're not defining it properly or at all. And that really leads to a problematic mindset. When you make a subtle mental shift in how you see debt and whether it's a tool or a weapon, then you will start to understand how you could use it because let's face it. You know, debt can be good or bad. It cuts both ways. When you look at debt that is used to acquire income-producing assets. It's a good thing. When you look at debt as something that you spend on what Robert Kiyosaki calls due dads, but essentially things like cars, vacations items that depreciate and become worth less or worthless, completely worthless over time. Then that is a reflection of poor decisions and using debt for things that really don't make any sense.

So first of all, define how much debt is too much, but more importantly, is define what the debt is and how it's being used. Because if you asked me the question, well, let me turn it around. Let me ask you the question. If I could lend you as much money as you want at a low-interest rate, a very low-interest rate, but you can make at least twice as much in return by borrowing that money and investing it. How much of that would you want? And if you thought about it, I mean, if you ask me, I would say as much as I could possibly get, and you kind of need to look at it that way because your uncomfort with it essentially is because you are looking at this incorrectly.

You need to learn to be comfortable with debt and not fear it because debt and leverage is your friend. It can be and is your friend when used properly. So there's no such thing in my opinion of having too much debt if that debt is actually one being paid off by other people in this case, your tenants, number two is generating passive income, monthly and annual income for you., three is increasing your wealth because your equity and net worth is grow...