When it comes to debt most people have a reflex aversion to it.  It's not surprising considering that most popular financial sources all claim that you should get rid of all of your debt as soon as possible.  I recently read "The Value of Debt" by Tom Anderson.  Anderson takes a different view of debt.  He explores how to use your personal balance sheet to enhance your net worth.   He has five tenets on how an individual or family should approach debt.  One of the tenets is to Explore Thinking and Acting Like a Company.  The goal or most if not all companies is to make a profit.  A lot of the principles that CFO's use towards strategically using debt are applicable to families, but rarely used.  An example of a company using debt when you wouldn't think they would need to is Apple issuing $39 billion in bonds since 2013 even though they have $178 billion in cash reserves.  Anderson is not suggesting that families start selling their own bonds, but there are other strategies that can be utilized to achieve your goals.  The main one is creating an Asset-Based Loan Facility.

Anderson claims that the strategic use of debt will allow you to have:

1. Increased Liquidity - having more ready access to liquid funds or cash
2. Increased Flexibility - having more options for addressing the direct and indirect costs of financial distress
3. Increased Leverage - in good times, you have the ability to enhance and accelerate the accumulation of wealth
4. Increased Survivability - a diminished likelihood that real survival issues, to your way of life or to life itself will arise.

A couple of the strategies in the book I liked in addition to the Asset-Based Loan Facility were options on how to finance cars, 2nd homes, boats, or other luxury items as well as how to maintain an ideal debt ratio..  It's not about buying what you can't afford, but about implementing a strategy to better purchase things you can afford and how to maximize value.

PASSIVE INCOME - SEINFELD STYLE

The most popular ways to generate passive income are things like interest from bonds, dividends from stocks, or rent from real estate.  In a recent interview former Mets first basement Keith Hernandez talked about an unusual passive income stream that he currently is receiving money from.  In 1992 he was a guest star on a Seinfeld episode.

Keith Hernandez | Seinfeld | TBS

It used to be almost $1,000. It diminishes as the years go by. So it gives me around $3,000 per year. I'll take it. For doing nothing. So you can imagine what Jerry gets. The principal actors, what they get.

They are.

Maybe staring is a TV series isn't in the cards but there are other ways to generate passive income in addition from investments.  Here are 40 ideas on things that can generate passive income - http://www.greatpassiveincomeideas.com/

DINNER ON DEAN SMITH

It was major news in the college basketball world when legendary North Carolina basketball coach Dean Smith passed away in February.  This past month it came out that before he passed away he set up a trust that would leave $200 to each of the 180 basketball players he had coached to have a dinner on him.

The payouts came not from Mr. Smith's will but from his revocable living trust.  Revocable trusts are becoming more popular these days as people look to keep the details of their estate private (details of Smith's generosity was only made public by players receiving the checks).  A will is available to anyone who searches public records, trusts are private. The "revocable" part of the name means that if you change your mind and want to dissolve the trust at some point, you can do so without a problem.  

Here is a quick comparison of revocable trusts and wills - http://www.nolo.com/legal-encyclopedia/living-trust-v-will.html

INVESTING IN UNICORNS

In the financial world a unicorn is a private company worth $1 billion or more.  They used to be as rare as seeing a real unicorn.  Nowadays there are more and more private companies reaching that valuation. For example Uber has been valued by venture capitals at $40 billion, Airbnb at $20 billion, Snapchat at $15 billion, and Spotify at more than $8 billion. Because they are private companies it's not that easy to get in on the investment.  You can't open up a Schwab or Fidelity account and invest in them.  You could invest through a venture capital fund, but it may take a sizable investment and you would have to be a qualified investor.  Your other option is to wait until the company has their initial public offering, but by that time the company's stock price may have doubled or tripled from what it's value was prior to going public.  Etsy was a recent example of a company that started trading at double it's IPO price.

Things are changing as Barron's magazine recently published an article that stated that popular mutual funds from companies like Fidelity and T.Rowe Price have been building up sizable investments in private companies and thus making it more accessible to the public.  Fidelity's $113 billion Contrafund mutual fund alone owns more than $162 million more of Uber and $142 million of file-hosting company Dropbox.  The T. Rowe Price Growth fund recently reported a $63 million stake in rental marketplace Airbnb and $74 million in Dropbox. 

WATERCOOLER

The TSA collected $638,000 in loose change last year.  In their rush to get to their destinations, travelers left $638,142.64 in coins and currency in the bins and bowls at airport checkpoints in 2013, according to TSA data. That was almost $107,000 more than what passengers left behind in 2012, and more than $150,000 than 2011. At this rate, it will only be about three years until the Transportation Security Administration can count on a cool million! The TSA Loose Change Act was a bill intended to require the Transportation Security Administration to give the money left behind by passengers at TSA checkpoints to private charities that provide travel-related services to the members of the US military and their families.  The bill passed the United States House of Representatives during the 113th United States Congress, but died it died in committee in the Senate. 

Entertainment stars are not just on the big screen or on your favorite tv series.  AdAge recently published a ranking of the top YouTube stars according to their estimated monthly earnings.  The top earner in the food and cooking genre is a channel called CharlisCraftyKitchen, which features videos of an 8-year old named Charli sharing baking tips.  According to estimates, Charli's channel generates an average of $127,777 in ad revenue per month.  So much for lemonade stands.

KIT-KAT CHRISTMAS CAKE with m&ms - Cake Decorating Tutorial by Charli's crafty kitchen

Are you covered?  Kiplingers magazine recently published a quiz with ten scenarios, all assuming you have a typical homeowner's, auto, or health wealth.  See how well you know when you're covered or when your wallet could be left out in the rain.  I scored a 9 out of 10.

Take the quiz.  http://www.kiplinger.com/quiz/insurance/T065-S001-are-you-covered/