Episode 26: How to Use Debt like a Rich Person

May 18

In today's episode, we delve deep into the topic of debt. I'll tell you a little secret: I currently find myself in a whopping 1.3 million dollars of debt. I might have had a heart attack if someone had told me this seven years ago. You see, my perception of debt has evolved drastically over time. Nowadays, I embrace debt as a powerful resource in various aspects of my life. I utilize mortgages for rental properties, a primary mortgage, a home equity line of credit (HELOC), a car loan, and even credit cards. Debt has become an integral part of my financial strategy.

Join me today as we explore the multifaceted world of debt. I will walk you through the three key ways to harness debt effectively and transform debt from a weapon used against oneself into a valuable tool. Moreover, we'll explore the concept of strategic leverage with debt, a strategy employed by the financially prosperous. You'll learn to utilize debt to accelerate your wealth-building journey by the end. So, let's embark on this enlightening journey together!

Key highlights

[00:00:00] Holistic Money Podcast intro

[00:01:00] Introduction to today’s topic: Debt

[00:02:28] What is debt?

[00:05:35] Three main ways you can use debt:

#1: To solve an underearning issue

#2: Overspending

#3: Strategic leverage

[00:10:04] Kim Kardashian’s mortgage example of strategic leverage

[00:11:49] How strategic leverage has played a role in my wealth-building journey

[00:12:29] Three main asset classes in strategic leverage: Stock market, real estate & business

[00:14:23] Investing money in one’s self

[00:15:22] Quick overview of ways you can use debt

[00:16:48] Holistic Money Podcast outro

Notable Quotes

Debt is not bad. Debt is a wonderful tool that, as long as you're using it in a way that actually serves you in your future long-term interests, you can grow your wealth through debt. I know that is exactly what I did.
So you want to avoid going in with a preconceived notion or a preconceived bias that you shouldn't be using debt because there are amazing ways to use all kinds of debt. You will miss many opportunities if you're focused and locked in on this idea that debt is bad and you shouldn't have and shouldn't use it.
If you notice yourself as someone who is not making enough money to pay for your life, then using debt as a bridge for you to support yourself while you are increasing your income can honestly be a great way to use debt, and I am not one to shame this way of using debt.
There are so many interesting, fun, unique, and creative ways that you can borrow money to invest to get a return. Still, you have to be willing to be open to them, and you have to be willing to look for them instead of consistently telling yourself that debt is not a tool that you should be using.
One of the other places that I love to invest money is in myself. I always believe that my brain is my money maker, and for me to make more money and make great financial decisions, I need to invest in my brain and my education.