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<p>Foreword xi</p> <p>Acknowledgments xv</p> <p>Introduction xvii</p> <p><b>Part 1: The Value of Debt in the Management of Wealth 1</b></p> <p><b>Chapter 1: Strategic Debt Philosophy: An Overview 3</b></p> <p>How This Book Can Add Value to Your Life 3</p> <p>The Five Tenets (or Action Principles) of Strategic Debt Philosophy 4</p> <p>Chapter 1: Summary and Checklist 14</p> <p><b>Chapter 2: The Basic Idea: Limiting the Costs, the Impacts, and the Duration of Financial Distress 21</b></p> <p>Risk of Financial Distress 22</p> <p>The Direct and Indirect Costs of Financial Distress 23</p> <p>The Impact of Financial Distress: Five Levels 24</p> <p>The Duration of Financial Distress 25</p> <p>The Four Indebted Strengths: A First Look 26</p> <p>The One Thing You Must Consider! 26</p> <p>Chapter 2: Summary and Checklist 29</p> <p><b>Chapter 3: Strategic Debt Practices: An Overview 33</b></p> <p>Understanding and Taking Advantage of Strategic Debt Philosophy 34</p> <p>Achieving and Maintaining an Optimal Debt-to-Asset Ratio 37</p> <p>Calculating Your Debt-to-Asset Ratio 41</p> <p>Should Your Primary Residence Be Included in Your Debt Ratio? 43</p> <p>When to Pay Down Your Debt, and When Not To 45</p> <p>Advanced Practices and Scenarios 47</p> <p>Chapter 3: Summary and Checklist 49</p> <p><b>Part 2: The Assets-Based Loan Facility 53</b></p> <p><b>Chapter 4: The Value of an Assets-Based Loan Facility (ABLF) 55</b></p> <p>What an ABLF is and How It Works 56</p> <p>The Many Advantages of Having an ABLF in Place 59</p> <p>Why Virtually Every Company Has a Line of Credit 61</p> <p>Surviving Storms and Other Natural Disasters 62</p> <p>The Criticality of Being Proactive and Assessing Risks 64</p> <p>Family Finances: First Bank of Mom and Dad; Elder Care Bridge Loan 67</p> <p>Taking Advantage of Opportunities and Distressed Sales 68</p> <p>Average ABLF Usage and the Win-Win-Win Scenario 70</p> <p>Chapter 4: Summary and Checklist 71</p> <p><b>Part 3: Scenarios for Success 75</b></p> <p><b>Chapter 5: Long-Term Wealth Amplification through Capturing the Spread 77</b></p> <p>The Basic Concept: Inherent Risks with Great Potential Rewards 77</p> <p>Three Key Factors to Consider 79</p> <p>Some Scenarios for Capturing the Spread 83</p> <p>Synching with Your Investment Strategy 93</p> <p>Chapter 5: Summary and Checklist 93</p> <p><b>Chapter 6: Holistic Financing of the Expensive Things You Need and Want 99</b></p> <p>A Better Way to Buy: In the Company of Holistic Financial Thinkers 99</p> <p>Four Principles When Financing the Purchase of a Desired Item 100</p> <p>A Better Way to Purchase a Vehicle (or Almost Anything Else) 108</p> <p>Purchasing a Second Home: Pluses and Minuses 111</p> <p>100 Percent Financing: The No Down Payment Real Estate Purchase Option 117</p> <p>Chapter 6: Summary and Checklist 119</p> <p><b>Chapter 7: Generating Tax-Efficient Income in Retirement or Divorce 123</b></p> <p>Introduction: Three Goals (and Some Disclaimers) 123</p> <p>An Opening Scenario for No Taxes in Retirement 124</p> <p>Borrowing Versus Selling to Access Your Money 125</p> <p>A Better Alternative to a Familiar Story 127</p> <p>Tying It Back to Capturing the Spread 128</p> <p>Revisiting Tax Issues 130</p> <p>Making Use of Strategic Debt Strategies and Practices in Divorce 138</p> <p>Chapter 7: Summary and Checklist 143</p> <p><b>Chapter 8: Conclusion: What This Book is Really About 149</b></p> <p>What We Hope You Have Taken Away 150</p> <p>Strategic Debt as a Financial Engine over the Decades 153</p> <p>Paradoxes of Plenty: Some Surprises in Maintaining an Ideal Debt Ratio 158</p> <p>Investing in the Future: A Cautionary Reminder 162</p> <p>A Final Thought 164</p> <p>Chapter 8 Summary: A Recap of the Book’s Significant Lessons 164</p> <p><b>Part 4: Appendixes 169</b></p> <p>Appendix A: The Varieties of Debt 171</p> <p>Appendix B: Strategic Debt Practice for the Young and Those with Limited Assets 175</p> <p>Appendix C: No Guarantees: Limiting the Risks of Investing in a Crazy World 185</p> <p>Appendix D: Some Examples of Ideal Debt Ratios 209</p> <p>Glossary 225</p> <p>Bibliography 229</p> <p>About the Author 231</p> <p>About the Companion Website 233</p> <p>Index 235</p>

<p><b>THOMAS J. ANDERSON</b> worked in investment banking in New York before moving into private wealth management. 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 <i>The Value of Debt</i>.

<p>Virtually every CFO of a large company recognizes that both assets and debts can be sources of financial strength. Yet the vast majority of high-net-worth individuals are either perilously over-leveraged or, more commonly, tragically under-leveraged. <p>In this groundbreaking book, author Tom Anderson argues that, despite the reflex aversion most people have to debt, wealthy individuals and families, as well as their financial advisors, have everything to gain and nothing to lose by learning to think holistically about debt, the way CFOs do. <p>Viewing amortization as the enemy of good financial sense, with only a few notable exceptions, Anderson explains why, if strategically deployed, debt can be of enormous long-term benefit in the management of individual and family wealth. More importantly, he schools you in time-tested strategies for using debt to steadily build wealth, to generate tax-efficient retirement income, to provide a reliable source of funds in times of crisis and financial setback, and more. <p>Taking a Strategic Debt approach to personal wealth management, he emphasizes the need to appreciate the value of "Indebted Strengths" and for acquiring the tools needed to take advantage of those strengths for increased liquidity, flexibility, leverage, and survivability. <p>But, as he explains, before you can begin to leverage your indebted strengths, you must first determine your optimal debt ratio, or what he refers to as your debt "sweet spot." To that end, he describes methods CFOs use to determine their companies' debt sweet spots, and he shows you how to apply those methods in finding yours. <p>Anderson then supplies you with a set of advanced techniques for leveraging your indebted strengths, including: <ul> <li>Capturing the spread, or, in other words, profiting from the difference between the value of an investment and cost of the debt incurred to make it</li> <li>A discussion on second homes (including renting versus buying) and a framework for how much of a second home you can afford (and how much of it should be financed)</li> <li>Better ways to purchase and finance cars, boats, and luxury items</li> <li>How you can help your children and grandchildren by using your balance sheet</li> <li>How access to the right kind of debt can help you and your family be better prepared for an emergency</li> <li>The best way to do eldercare transitions including bridge loans for you or someone in your family</li> <li>Alternative means of financing home improvements, college, real estate, raw land, and business investments</li> <li>Ways to create tax-favored income in retirement and divorce</li> </ul> <p>In addition, on <i>The Value of Debt</i> companion website you'll find a proprietary tool for calculating your own optimal debt ratio. With inputs for assets and liabilities, it enables you to develop your personal wealth balance sheet and to compare it to examples provided by the author. <p>Offering a bold new vision of debt as a strategic asset in the management of individual and family wealth, <i>The Value of Debt</i> is an important resource for financial advisors, wealthy families, family offices, and professional investors.

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