This post is sponsored by LightStream, but the content and opinions expressed are my own.
A lot of friends and family were shocked when we abruptly sold our home in California, but here's the thing: it paid off. It paid off REALLY well, thanks to something called purposeful debt.
Today we're partnering up with Lightstream again to share how smartly-utilized loans can actually increase your wealth dramatically.
Let's back up, shall we?
Nate and I are home renovation ninjas. Back in San Diego, we bought a rundown old house and slowly fixed it up, mostly-DIYing our way through everything from painting to installing a hot tub, busting down walls and expanding windows and more.
A Complete Change in Our Life Path
Then, my sister passed away. I have no words to describe that experience so we'll leave it at: that sucked a lot. Losing her threw everything into harsh perspective. When you realize how short life is, you want to make sure you're on the right track to living out your goals. Nate and I could see that we weren't creating the life we truly wanted. We'd long talked about moving back to the Pacific Northwest, homeschooling, spending more time outdoors, living at a slower pace.
Using Purposeful Debt to Improve Your Life
We did things backwards at this point. We stumbled on our dream property in Idaho, bought it, Nate retired from law enforcement, we pulled the kids out of school and spent a summer in our RV making sure it would be feasible to build there. Decided to sell our California home and go ALL in.
Just one problem: there was this pesky issue of a ton of unfinished renovations that would dramatically decrease our selling price if we didn't wrap them up. So we took out a loan, knowing that this would be “purposeful debt,” which allowed us to effortlessly flip the place and walk away with a ton of equity to funnel into our new home build.
Remember that Money Decreases Due to Inflation: Use it or Lose it!
Then, well, you know… the whole world changed. It became clear that a build would NOT be feasible in 2020, and we couldn't live in the RV indefinitely. So we stuck a pin in that, took the money earmarked for our home and quickly funneled it into the little Boise house where we are now.
This place needs a TON of renovations, and we've done what we can on a shoestring budget: painted everything, refinished cabinets, ripped up carpets, furnished the place. Now we're looking at tackling the bigger projects that this place needs – new appliances to replace broken ones and a full bathroom gut to remove rotted floorboards – with another “purposeful debt” loan.
Again, we view “purposeful debt” as debt that furthers our lives. A debt taken to buy a home, for example, is typically a purposeful debt. Depending on the market, there are instances where even if you can pay cash for things, your money may be better off invested elsewhere, while you leverage a personal debt loan to make a savvy, fast financial move.
What Makes Debt Purposeful
Ideally, purposeful debt is debt that will actually help us make more money. In this instance, fixing up our Boise house will give us the freedom to once again leverage our home for our future. We're not sure if we're going to rent this place out, sell it, or just use it as a sort of office for working away from the house we eventually build on our property across town.
In any case, we know that investing in home improvement is purposeful debt in that it is thoughtful, intentional borrowing of money to improve our circumstances.
How LightStream Loans Can Be “Purposeful Debt”
LightStream’s home improvement loan is a smart financial tool to help responsible consumers pay for their renovation. LightStream is rooted in the belief that consumers who have established a good credit score have earned the right to a simple loan process and excellent rates.
They're the perfect option for people like us who responsibly manage our money, and want a lender who is on the same page in terms of utilizing loans to further positive change in our situation. I feel empowered knowing that there are people on our side who understand and support our financial approach.
The LightStream website is incredibly straightforward, with fixed rate loans ranging from $5,000 to $100,000. They even have a chart breaking down interest rates based on loan purpose and term – without putting in personal information.
They put ALL of the data at your fingertips, so you can make the most-informed decision for yourself in a completely transparent process. And they don't just do home improvement loans! They have loans for practically everything, and even offer co-applicant loan options.
Have you ever used purposeful debt to improve your life?