Sorry, Shakespeare
Don't listen to William Shakespeare...
He famously wrote, "Neither a borrower nor a lender be."
For more than 400 years, people have quoted this line as an argument for keeping your finances simple.
But like most proverbs or adages, it's just plain trash.
We remember old sayings like that because they're catchy or witty. They sound wise... But they don't always hold up to scrutiny.
And as longtime readers know, I love nothing more than challenging accepted wisdom.
Consider this one: "What doesn't kill you makes you stronger."
Absolutely not. We get that this is a plea for optimism in the face of adversity, but physical maiming or psychological trauma can certainly weaken you.
Or my least favorites...
"Curiosity killed the cat" and "ignorance is bliss."
Bah... Curiosity and the pursuit of knowledge are two things I choose to model my intellectual life around. More than that, they represent two of the most valuable virtues of human character. Without them, the world would be worse off.
So, just how destructive and sticky can these sayings be?
Shakespeare's line about borrowing and lending comes from a monologue in his play Hamlet. The speech by the character Polonius has spawned a number of phrases accepted as wise counsel...
"To thine own self be true"... "Give every man thy ear, but few thy voice"... "The apparel oft proclaims the man."
The trouble is that Polonius is the last person whose advice you'd want to take. He's an adviser to the story's villain... and essentially gets every judgment wrong in his own life.
The 19th-century literary critic William Hazlitt describes Polonius as "a busy-body, [who] is accordingly officious, garrulous, and impertinent."
We won't argue with the importance of being true to yourself. But don't take financial advice from someone Hamlet himself calls a "tedious old fool."
You see, in the modern financial world, careful borrowing can be a superpower. And even more, lending is one of the best ways to build wealth.
Over my entire career, I've always stressed the importance of having some of your portfolio in fixed income.
As a refresher, fixed-income securities are designed to pay a regular stream of income over a fixed period of time. At the end, you also get most of your initial investment (called principal) back, depending on what price you paid at the start.
Including safe fixed-income securities in your portfolio is a simple way to stabilize and balance your investment returns over time. For people with enough capital, locking up extra cash in fixed income is a great way to generate much more cash flow than parking that money in a checking account.
Bonds are one type of fixed-income security. Depending on your age and tolerance for risk, they sit somewhere between boring and a godsend. Personally, the promise of interest payments and an almost certain return of capital at a particular fixed rate lets me sleep well at night.
But bonds have been out of favor recently as interest rates got hiked to combat inflation. You see, bonds have an inverse relationship with interest rates. When rates rise, bonds fall, and vice versa.
Now, interest rates have started to come down... That means you should consider adding some exposure to bonds if you don't have any.
And if you want to earn higher returns on bonds, you should consider distressed corporate debt.
To help explain the opportunity, let's back up a little and talk about what a bond really is...
Bondholders, unlike stock investors, have a legal right to be paid by a company. If a company's balance sheet collapses, its share price collapses with it (and any dividend it pays will end).
Shareholders have no guarantees... but bondholders have much more safety.
Those interest payments are legal obligations. So if a company gets in trouble and still has to pay its bills, bondholders stand at the head of the collection line.
Even in the event of a bankruptcy liquidation, the remaining proceeds go to the secured creditors and bondholders. Shareholders get squat.
On top of all that, the capital-gain potential of bonds is widely underrated. If you can purchase corporate bonds at a discount – when they trade for less than face value – and hold them to maturity, you receive the full face value when the bond principal is paid off. That can be an incredible yet overlooked built-in capital gain... regardless of what the market or an individual company's stock has done.
As long as the company doesn't go bankrupt, bondholders get paid the full amount they're owed. It's that black-and-white.
When the credit cycle rolls over – something that my colleague Mike DiBiase believes will happen very soon – there are going to be tremendous deals available. In particular, you'll be able to buy "distressed debt" in the form of bonds.
To be clear, some distressed bonds aren't safe, but others are. It all depends on whether a company can afford the annual interest costs on all of its debt... and whether it will have enough cash on hand to pay off the bond at maturity.
Purchased at the right price, safe distressed corporate debt can make investors a fortune.
If you want to learn more about investing in safe distressed debt, click here to watch a presentation Mike just put together. With his knowledge and guidance, you could collect multiple triple-digit winners.
Act quickly, though. Today is the last day Mike's presentation will be available.
What We're Reading...
- Something different: Investors are making up the highest share of homebuyers in five years.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
October 8, 2025