
Anthony Bourdain on not having debt - bootload
https://www.wealthsimple.com/en-us/magazine/money-diary-anthony-bourdain-3
======
vinhboy
> Nobody likes paying high taxes, but I don’t mind.

How refreshing.

I agree with him.

Paying my taxes is a point of pride for me. It's a repayment for all those
years I was poor and the government paid for me to live and go to school.

~~~
refurb
Not sure if you're living in the US, but I do and I have the exact opposite
viewpoint. The amount of waste, corruption and poor planning by the gov't
makes me feel like I'm throwing money away. I'd rather give it a charity since
then I'd know a majority of it had an impact.

I think if the gov't was a bit more efficient and could be shown to be good
stewards of money I'd probably hate paying taxes a lot less.

~~~
p_eter_p
People always say this, but nobody can ever point to a solid example. Do you
have hard numbers that government social programs are less efficient than
charity?

~~~
marknutter
Ask yourself this: is the government efficient with its defense spending? If
the answer is no, why would it be any different with its social programs?

~~~
deadbunny
Just because one branch/department is wasteful doesn't mean others are. Trim
that military budget and you'll start seeing efficiencies simply because they
don't have that extra trillion to spunk up the wall.

~~~
duderific
A hundred billion here, a hundred billion there, pretty soon you're talking
about real money.

------
ianai
There was a point where financing the government was a patriotic act. People
would give other people War Bonds as presents. But now the patriotic thing is
to trash talk which ever party is in the administration and wax poetic about
governmental corruption. You can't have it both ways. You can't say no to
financing your government and scorn corruption. Either you're okay paying for
your government, you're okay with someone else paying for your government (to
possibly include other governments!), or you're okay with your government
paying for itself with printed money. (That last option, seignorage, leads to
hyperinflation.)

~~~
taurath
The government needs better PR frankly, instead of allowing itself to be a
punching bag all day. Nobody can even imagine how many things the government
and your tax dollars provide.

~~~
coderjames
I was thinking about this recently when I filed my taxes.

Maybe if they provided some kind of itemized receipt? "You paid $x in taxes.
This was distributed as $y to infrastructure, $z to education, $w to defense"
etc.

~~~
patrickaljord
Your tax dollar don't pay for $y, $z or $w. You pay for the national debt
mostly at this point. The government overspends and gets its money either from
debt or from over printing. Even if top 10 of fortune 500 paid 100% taxes, it
would still not cover spending. Just saying.

~~~
maxerickson
Interest on the national debt is a small portion of the US budget:

[https://www.nationalpriorities.org/budget-basics/federal-
bud...](https://www.nationalpriorities.org/budget-basics/federal-
budget-101/spending/)

Even if you just look at discretionary spending, debt payments are not a large
portion of spending.

New borrowing is also larger than the interest payments.

~~~
jazzyk
There is something off with the charts on the site you refer to (they don't
provide the actual numbers in the charts).

Simple calculation:

With $20T of debt, at 3% interest rate (30Y bond), the interest on the debt is
adding 600 billion dollars to the deficit per year (and it compounds).

600 billion with respect to the 3.8 billion federal budget is almost 16%.

And the interest rate is so low only because debt rates have been artificially
suppressed by central banks using financial tricks such QE, the Fed buying its
own's governments' debt, etc.

With interest rates bound to rise sooner or later, we are sitting on a
financial time bomb.

~~~
maxerickson
The US pays (on average) less than 3%. The debt is also just a bit less than
$19 trillion.

So we save $30 billion by using the slightly smaller debt and $120 billion by
using the interest rate of 2.4%.

$450 billion is still a huge budget item and it is a problem that interest
rates will rise.

------
grecy
I have always viewed debt as a promise of future labor.

i.e. if I have debt now, I must go to work in the future to pay it back.

Because I have no debt, I don't have to go to work, and can spend the next two
years driving around Africa.

I'm so passionate about saving money I even wrote an e-book on how to do it:
[http://theroadchoseme.com/work-less-to-live-your-
dreams](http://theroadchoseme.com/work-less-to-live-your-dreams)

~~~
harryh
Now turn it around. What is money? Money is someone else's debt. Money is a
promise that someone else will go to work for you in the future to pay it
back.

------
kevinmannix
I wish more people thought this way. Debt _can_ be be used effectively, but as
Uncle Ben said, "With great power comes great responsibility." It seems that
too much of America is wooed into a false sense of security by their ability
to obtain debt without judging their ability to _pay_ that debt off.

~~~
d_t_w
I agree with your sentiment, but it strikes me that there is safety and
opportunity in behaving badly when the bulk of your peers are swept away in an
orgy of debt fuelled spending.

Ten years ago I bought a small flat in London to live in. I paid a respectable
deposit and didn't over-leverage. We were at the end of decade long property
boom, there were huge concerns about the level of borrowing and ability to
repay, predictions of mass repossessions if the BoE raised rates by even a
quarter percent, the BoE would regularly "jaw-bone" the fact that the rate
must rise[1].

The bank wanted to lend me 5x the amount I borrowed. I could have bought an
entire 3 bedroom house rather than just a 1 bed flat situated in the same
property. I borrowed within my bounds, priced the debt relative to an upward
BoE rate, played it sensible.

What a missed opportunity! In retrospect I should have taken all the cash the
bank wanted to throw at me and bought the whole house. I would have been able
to manage the repayments fine, and financially I would be light-years ahead of
where I am now.

All because the government will literally burn anyone to keep those vested in
the housing market safe (particularly I reference the U.K/NZ/AU, I assume the
U.S.A is similar).

Behave badly in droves and the government will never raise that BoE rate. They
will burn savers, they will continue to inflate the housing bubble, they will
set fire to the hopes of anyone under the age of 30 buying a house to live in.
Literally anything to save the retirement nest-egg of a generation of baby-
boomers, aided and abetted by a generation of baby-boomer politicians.

Only external factors will bring an end. In the U.K that may be Brexit (as
external as that is), in AU that may be Chinese capital controls.

Until those external factors are applied you're fine misbehaving. For me,
behaving respectably was a mistake.

[1] The rate today is 0.25%, an all-time historic low. The rate when I bought
was 0.5%, at the time an all-time historic low.

Saving in the U.K the last decade? Sucks to be you:
[https://qz.com/750443/the-bank-of-england-just-cut-
interest-...](https://qz.com/750443/the-bank-of-england-just-cut-interest-
rates-after-seven-years-of-preparing-for-a-hike/)

~~~
verbify
Just because you got unlucky by being responsible doesn't mean everyone does
or will.

I've known people in places where the property market collapsed and its ugly.
And I know people think it can't happen in London, but 'it can't happen here'
is about as myopic as it gets.

~~~
pc86
The property market collapsing (locally, not nationally) is only an issue when
you want to sell. If you buy a house with an FHA mortgage (3.5% down), you
will be underwater for many years no matter what. But it's a 30-year loan, why
would you buy a house if you wanted to move in 3 years?

~~~
duderific
Plenty of people did this in the US (and I assume other countries) during the
Great Housing Debacle of the early 2000's, it's called "flipping." The problem
is when the music stops, and nobody wants to buy houses, you are stuck with
it, and either need to default on the mortgage or suck it up and live there.

------
nkozyra
Debt is a manifestation of risk. As general financial advice, "don't take on
debt" is akin to "don't take risks."

It depends. On a lot of things.

~~~
chjohasbrouck
Risk is one of the things that debt can represent, sometimes, but there can be
debt that doesn't involve any risk, and there are risks that don't involve
debt.

What's risky about using a credit card to buy a kayak?

And how does investing money you already have in small cap equities represent
a debt?

I think for the vast majority of individuals just trying to make good personal
finance decisions, "don't take on debt" is (on average) great advice.

~~~
mockery
(I don't really agree with the simplification of debt = risk. Despite that...)

> What's risky about using a credit card to buy a kayak? If you unexpectedly
> lose your job or are otherwise unable to pay off the card on the schedule
> you expected, you'll incur significant interest on the debt and end up
> having to pay far more than you originally planned. Compared with saving up
> money and paying in cash, there are clearly additional risks incurred when
> using the card.

(If you had the money to pay off the card already and are just using the CC as
a convenient method of payment, the risk is obviously far lower.)

~~~
hueving
>If you had the money to pay off the card already and are just using the CC as
a convenient method of payment, the risk is obviously far lower

Right, but you're still taking on debt for the month and then paying it in
full. What is the risk?

~~~
mseebach
As with risks, so with debts. There are large ones and small ones. Paying down
a balance on a credit card every month is pretty low risk, but not as low as
paying with a debit card in the first place.

Also, a credit card you're paying down monthly isn't really 'debt', isn't it
usually something you do for the air miles or cashback?

~~~
hueving
>Paying down a balance on a credit card every month is pretty low risk, but
not as low as paying with a debit card in the first place.

Not when you account for the stolen card scenario. When someone steals your
debit card and racks up charges, it locks up real money (your bank account
balance) that you can't use until it's resolved. A stolen credit card just
locks up a credit-line.

However, even if you ignore that, I'm still missing what risk you see with a
credit card that results in it being higher risk than a debit card. What is
the risk I'm missing?

>Also, a credit card you're paying down monthly isn't really 'debt', isn't it
usually something you do for the air miles or cashback?

It's very short term debt. I do it for two reasons, air miles/cashback, and
for better protection when things go south. In addition to the stolen card
scenario above, some credit cards (e.g. an amex I have) will provide
additional protection for things like rental cars (additional insurance) or
even stolen goods (refunds for electronics stolen from your vehicle).

------
mmastrac
This is fantastic advice for 95% of people. If you one of the few that can
manage debt responsibly, however, you'd be missing out on the opportunity for
leverage. In many cases a person can effectively trade their good credit for
additional returns.

Of course, you need to fully understand the risk/return profile of any
leveraged investment you make AND be careful not to be overleveraged at any
point. It's a fine line to walk, but it can be a valuable part of your
investment portfolio.

~~~
cortesoft
I think the important thing to consider is what you are taking on debt for -
are you using it for investment in something or for an expense? A house or an
education is an investment - it can be a good or bad one, of course, but the
idea of going into debt to obtain either of those should not be dismissed out
of hand. Both can provide a return on those investments greater than the
interest cost.

However, if you are taking on debt for an expense (a vacation, a new car when
you have a working one already, a new toy), then you are gaining nothing in
return for the interest. You could easily wait until you have the money saved
up, since those expenses have no extra return for purchasing early.

The worst debt, of course, is when you are taking it on because you simply
have more expenses than you do income. This is often the source of credit card
debt. If you are growing in debt but not growing in investments, you need to
take a hard look at your lifestyle.

~~~
chjohasbrouck
One caveat to this kind of thinking is that money is fungible.

One can easily pay for a vacation or years of eating at nice restaurants every
day all in cash, and also go into debt for an education.

Also, one individual taking out an auto loan and a loan from Sallie Mae isn't
1 good loan and 1 bad loan. You could've foregone the high-interest loan on
the big depreciating asset and used the savings to fund the education instead
of the loan from Sallie Mae. In that scenario both loans were probably a bad
idea, regardless of the return the education nets you.

I think another key metric beyond interest rate and rate of return, is degree
of necessity. That's harder to measure though.

------
appleiigs
Debt conversations always have these weird grandpa rules of thumb and words of
wisdom, as you can see in the other comments.

The proper use of debt is to match the debt with the asset. If you are buying
a house, a 25-year mortgage matches the value of the house. If you are buying
a car, a 5-year loan matches the value of the car. If you are buying a
sandwich with a credit card, well... you should pay off your credit card at
the end of the month because that sandwich is long gone.

~~~
CPLX
The general rule, really, is more like borrow only for appreciating assets
(often real estate, financing a new business) and not for consumables or
depreciating assets.

But both your idea and mine are still rules of thumb, notwithstanding how much
you wish to elevate yours to a different status.

~~~
runeks
> The general rule, really, is more like borrow only for appreciating assets
> (often real estate, financing a new business) and not for consumables or
> depreciating assets.

Note the gotcha: if enough people borrow money and buy something because they
think it will appreciate, it will. In other words, according to your rule,
speculation can make itself appear worthwhile.

~~~
CPLX
That's not really true. If everyone buys golf trips or ice cream cones the
chance they will turn into appreciatirng assets is zero.

That's still basically true for most things that look sort of vaguely like
assets, such as new cars, appliances, and whatnot.

Very few of the things the average person chooses to incur debt to acquire are
even remotely plausible as appreciating assets.

------
partycoder
The problem is that debt starts modifying your behavior.

If you are in debt you are more likely to tolerate conditions you don't enjoy,
e.g: if you live paycheck to paycheck, being happy at your job is not your top
priority.

------
bootload
_" Once I did that risky thing, leaving the only profession I knew to become a
professional writer and TV guy, I was, and continue to be, very careful about
the decisions I make every day."_

Sage advice. Here's the link to the book publishing mentioned ~
[http://www.eater.com/2012/2/22/6611779/the-lineup-for-
anthon...](http://www.eater.com/2012/2/22/6611779/the-lineup-for-anthony-
bourdains-ecco-imprint-roy-choi-texas-barbecue) /
[http://www.publishersweekly.com/pw/by-topic/industry-
news/pu...](http://www.publishersweekly.com/pw/by-topic/industry-
news/publisher-news/article/48650-anthony-bourdain-gets-his-own-book-line-at-
ecco.html)

------
Draiken
This is an interesting story and all that, but honestly, he only got to the
"debt free nirvana" after becoming rich and famous.

I pay my credit card, pay my taxes and my mortgage, but that takes almost all
my money away. So if I look at it my net worth it is basically negative.

Only way I'll get to the debt free nirvana is if I get rich somehow. It's not
a real choice. So the entire premise of the article is pretty weak.

~~~
mattcantstop
> Only way I'll get to the debt free nirvana is if I get rich somehow. It's
> not a real choice. So the entire premise of the article is pretty weak.

No, that certainly is not the case. Slow and steady saving and investing is
the way to become wealthy. Check out www.reddit.com/r/personalfinance or
www.mrmoneymustache.com as examples of this.

~~~
Draiken
I've seen the Mustache site before, but let's be honest here: this only works
if you live a frugal life style.

It might work if you are alone with no attachments or your SO has the same
views, but not for anyone else.

I'm trying to become less attached to things and have gone a long way, but
telling your wife and kid to not want to eat out, for instance, is almost
impossible...

------
doctorcroc
Bourdain is an OG. I've always admired his candor and ability to reflect on
the things most important in life (and he knows it first-hand, having traveled
nearly every where) -- time, lack of stress, and the enjoyment of good food
with good people. Cheers!

------
Mikeb85
If your return on capital is higher than the interest rate, you should take on
debt. If it's not (and for most it's not), then you shouldn't. Pretty simple.

Anyhow, the article is an interesting anecdote about Bourdains life, but has
little to do with money. He makes money from TV and books, can live
comfortably because he makes quite a bit, but he's no financial savant.

~~~
tonyedgecombe
The return on capital includes a risk factor, there is no risk that you won't
have to repay the debt (other than death or bankruptcy).

~~~
paulddraper
Death won't automatically void the debt, though of course it's only the
beneficiaries of your estate that will feel the effects.

------
wtvanhest
Off topic, but why did the creator of this site make the top bar move when
scrolling? That makes it 100% impossible to read for people who use the top of
the screen as a line to read along. Also, is their a chrome extension to
cancel that functionality?

~~~
wtvanhest
My question is serious. I cannot track text very well and rely on the top of
screens.

------
alistproducer2
> Nobody likes paying high taxes, but I don’t mind.

It's actually amazing how little most Americans pay in taxes yet we complain.
This year my effective tax rate was ~8%. Of course this is by using every
legal tax shelter available.

Considering what I get from the Federal government here in the US, I think 8%
is actually fair. If it spent more of my money doing thing like taking care of
home and quit with the empire building I'd be happy to pay more.

~~~
plandis
8%? You either live very close to (or under) the poverty line or are
fabulously wealthy. I'm assuming that you're rich since you mentioned tax
shelters.

TurboTax put my effective tax rate this year at 26%.

~~~
alistproducer2
Nope. 2 income, low 6 figures. There are pretty significant shelters for us
middle class folks. $36k available in 401k contributions alone.another $6.5 k
for HSA. $5k for childcare spending along with credits and deductions for the
same thing. The key is to have a cost of living where u can afford to take
advantage of them all.

------
strictnein
I've been to a couple of his tour stops, where he gives talks about various
topics (usually food and travel and his TV shows are the main things
discussed). If you find Bourdain interesting, you'll probably find his talks
quite entertaining.

Anyways, at one of his shows he straight up said that each of his stops pays
for a year of private schooling in NYC for one of his kids. Thought it was an
interesting way of looking at things.

------
2color
My response to the article: [https://medium.com/@2color/my-response-to-
anthony-bourdain-d...](https://medium.com/@2color/my-response-to-anthony-
bourdain-does-not-want-to-owe-anybody-even-a-single-dollar-
bc6d5b3db40e#.kao1e5c62)

------
vinceguidry
You obviously didn't read the article. Bourdain did not reach the magical 'no-
debt' world of wonder until after he got famous.

If anything it's a fake-cautionary tale. "Don't do what I did kids, even
though I'm rich and did more blow and had way more fun than you'll ever have
in your whole life!"

Ugh.

~~~
ethbro
I didn't read anywhere in there where he says don't do what he did.

He lived his life the way he wanted to, there were some rough times. Now he
has a family, different priorities and resources, so is taking those into
account but still generally living the same way.

My tl;dr would be "I was always in debt when I was young. Now I have a bit of
money and prioritize those I care about, but after that's funded I'd rather
have great experiences than a larger bank account."

~~~
varelse
As a long-time fan of his, his early life IMO (I've read and loved Kitchen
Confidential) was shortsighted hedonism that came to a crashing halt when he
became famous.

He has since settled for dating/marrying beautiful women, noticing that chain
smoking would probably kill him and started doing Krav Maga instead, and
becoming smart about money.

His dayjob's not so bad either.

------
Theodores
> I didn’t put anything aside, ever. Money came in, money went out. I was
> always a paycheck behind, at least. I usually owed my chef my paycheck:
> again, cocaine. Like I said, until I was 44, I never even had a savings
> account.

Anyone who has ever spent any of their money on class 'A' drugs is not in any
position to dispense any type of wise financial advice.

~~~
Bartweiss
I mean... there's even a note to that effect at the top of the article.
Bourdain says like five times that he makes decisions for convenience and
security over efficiency.

This isn't advice on how to maximize your wealth, it's a personal account of
how he lived and how debt and wealth influence him on an emotional level.

