People don't often think of debt and asset protection in the same context.

Take for example 2 real estate investors, each with a single rental property worth $100k

THREAD:

If you were a Karen trying to find somebody to sue, would you rather go after:

Jim Equity that owns the property outright with no mortgage?

or John Debt that owns the property but has an outstanding mortgage for $80k?

You can bet your sweet booty that Karen is going to get her lawyer Bill to file a claim against Jim Equity! If Karen & Bill win the claim, they'll gain full access to all $100k worth of property

Whereas if they had decided to go after John Debt, they would need to pay off the bank their $80k, and only be left with $20k.

If Bill Lawyer is charging Karen $200/hour and it takes 50 hours of work to complete this case, Karen owes Bill $10k, so she ONLY WALKS AWAY WITH $10k FOR HERSELF.

COMPARE THIS TO THE $90k SHE CAN WALK AWAY WITH IF SHE GOES AFTER JIM EQUITY.

The lesson here:

Debt is not always bad and can have a really powerful silver lining when it comes to asset protection.

The same principles here can apply to your personal residence or anything you own, not just investments. I bet Karen would love to lay claim to that flashy boat you paid all cash for

// END THREAD

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