In 2007 the U.S. national debt was a mere $9 trillion ($9,000,000,000,000). Today, in the year 2021, the U.S. national debt figure towers above $28.6 trillion ($28,600,000,000,000).
This trend represents a 317% growth rate over the last 15 years. During that same time period, the U.S. annual GDP increased by just 51%.
Therefore, America’s federal debt has been growing at a clip 6 times faster than the total of the entire country’s annualized economic output.
To any rational human being, this is purely insane and clearly unsustainable!
The sad part is that America has been following this never ending creation of debt for many decades.
Recently, U.S. household debt increased by a record $313 billion just within the 2nd quarter of 2021 and now stands at roughly $15 trillion.
To compare, the growth rate in U.S. household debt over the last 3 months has been increasing at the fastest growth rate since 2007 – which just so happened to be the year just prior to the beginning of the 2008 Great Financial Crisis.
This long-term trend shows that we are on a clear path to insolvency and bankruptcy.
Yet the only solution that any high ranking politician can come up with is to print more money and go further into debt.
It does not make sense.
Who knows what the future may hold, but I would bet on there being huge consequences to these irresponsible policies at some point in the future.
What does make sense is taking control of your choices to make rational decisions concerning a more sustainable future.
Like becoming an entrepreneur and learning how to easily finance these best low cost startup businesses!
Anybody can creatively finance startup businesses – you just have to think outside of the box.
Not All Debt is Bad
The corporations that control the mainstream media have a vast amount of sway over the content that is pushed into the minds of many people.
The influencers in this space are literally telling us what we need on a daily basis.
In addition, the ease of payment options today is much more advanced than at any point in history.
Any type of product or service is financeable in-store, can be purchased via credit card(s), or allows applications that orchestrate a swath of payment options dujour.
It’s really a no-brainer as to why household debt hovers near record-breaking levels.
But not all debt is bad. In fact, I like to differentiate good debt from bad debt.
Good debt is the type of debt associated with assets that appreciate in value and provide a return on investment.
If you start a business, you would finance your inventory and marketing. If you acquire a rental property, you will carry a mortgage. And, if you invest in the stock market, you can purchase shares on margin.
These are all examples of acquiring appreciating assets with good debt.
Bad debt is the type of debt associated with assets that depreciate in value and do not provide a return on investment.
Purchasing the new 55” OLED LG 4K TV with a credit card. Buying a brand new 2021 Nissan Frontier by dealership loan. Shopping for food products at the online grocery store via paypal.
These are examples of acquiring depreciating assets with bad debt.
Now that you understand the difference between good debt and bad debt, let us look at a few business ideas for launching a low cost startup.
Low Cost Startup Ideas
It is really not that difficult to bring a product or service to the market.
I would even argue that you don’t even need expert knowledge on the product or service to become profitable – Although I recommend you do strive to eventually obtain the knowledge.
With a simple internet connection we can literally open the door to a vast amount of business opportunities.
That is why I like affiliate marketing. At the core it’s really a simple process:
- Choose a niche
- Build a website
- Market to high-traffic keywords
- Make money
Finding high-traffic keywords can be complicated if you do not have any prior experience.
I recommend Jaaxy for your keyword research – a game-changer in the industry.
To learn more about Jaaxy Click Here
The amazing thing about an affiliate marketing business is that the start-up costs very low. Ideally, you can begin with less than $200.
Now that you have your low cost startup, let’s look at different ways to finance the deal – As with any business deal I would consider these options.
Other People’s Money
I began my journey as an entrepreneur with a very small amount of capital. That is why I’m a fan of using other people’s money (OPM) – In fact, I always look for OPM first when considering financing.
As Robert Kyosaki states, “If you are using your own money you are being lazy”.
I would suggest assembling a professional business plan before you make your pitch – first impression is everything.
In any negotiation, thinking outside of the box and creatively structuring the deal can be a huge plus – it should always be win-win. And, you should always be on the lookout for concessions and numbers revealed by the other party.
When entertaining OPM you have the choice of bringing on a partner, joint-venture, or private lender. This is where you must decide whether you want to give up equity in the deal, or pay the money back with interest – Good debt.
Both can be profitable.
If you can structure an OPM deal you will be taking on less risk and persevering more of your capital for future deals.
Credit Cards Are Huge
If OPM is not an option, I will consider using credit cards next.
A savvy entrepreneur should have access to ample credit to finance their ventures – Good debt.
I have financed business deals, purchased real estate, and traveled on points because of credit cards.
It took me roughly five years to build $135,000+ in both corporate and personal credit cards – And I’m not even counting mortgages, helocs, and business loans.
There are many gurus who will teach you the art of building both corporate and personal credit for a fee – The investment is well worth it.
You’ll want to be on the lookout for yield-spread when using credit cards – What does it cost to borrow the money vs. what kind of return or cashflow can you create with the money?
If I don’t have access to OPM or credit cards I will consider using cash.
Cash is king.
Although I would rather use the cash to service the debt that I used to acquire an investment, a cash purchase can result in negotiation of a more favorable price.
Buy low, sell high.
If my portfolio yields a 20% return while my borrowing costs are 5% I would rather have more of my cash in my pocket.
The Barter Economy
Lastly, barter can be a good option. However, it may be more difficult to find.
I have bartered a particular service that I have offered for a particular good or service that I needed.
The only drawback was that I had to find a party with what I wanted and wanted with what I was offering.
The time value associated with this type of deal can come at a premium.
As an affiliate marketing entrepreneur you can see that your financing options are limitless – If you choose to think creatively.
And, with a low startup cost of less than $200 you can easily finance this deal and start taking action to build out your business.
If you have found this article helpful, please leave comments below and/or share on social media.
To your passive income lifestyle,
Justin Ash, Founder/ Member