How I Think About Debt

Japanese businesses called "shinise" have endured centuries due to their high cash reserves and low debt. Debt limits the ability to withstand life's uncertainties, which are inevitable. As debt increases, the range of endurable outcomes narrows, reducing flexibility and options. Shinise's financial resilience highlights the importance of holding cash and avoiding debt. Debt not only affects financial vulnerability but also psychological well-being, limiting one's ability to endure challenges. While debt can be a useful tool, it must be used cautiously, recognizing its potential to constrain future choices. A comprehensive understanding of debt as a narrowing of endurable outcomes fosters a responsible approach to its use.