6 Ways Rich People Use Debt To Make Money

(this video is sponsored by Blinkist)

Today we talk about debt and how wealthy people use it to build wealth. Debt can be a hot topic because for many debt can be detrimental to their finances but for many others debt can allow them to accomplish more than they can just by themselves.

So here are 6 ways rich people use debt to build wealth:

Business debt; may businesses use debt to help with the growth and expansion of their business allowing them to attract more money.

Leverage: Many investors use debt in their investment portfolios to boost their earnings.

Shorting: Many investors and hedge funds use this debt strategy to make money during market drops by borrowing not money but by borrowing stock to sell in the open market.

Interest Arbitrage: If an investor can borrow money at a low interest rate, instead of purchasing something with cash, it can make more sense to finance the item and invest the cash if the potential return is higher than the loan’s interest rate.
Real Estate: One of the most common ways the average person can take advantage of debt is through Real Estate. This allows you to buy and leverage an asset without actually having the cash to buy it.

Tax Avoidance: One of the most important ways rich people use debt is to avoid taxes. By borrowing money instead of selling an asset they are able to bypass capital gains tax and enjoy their wealth tax free. Then as an added bonus they can use the Step Up Basis to eliminate their debt tax free in a strategy that many call Buy, Borrow and Die.

Let me know in the comments which of these points resonated with you the most.

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[wildepartment]

Wow!!! this amazing vid!! mind blowing! 🤯
thank you, i've learned a lot !.

[thepursuerofdreams]

Omgggg I love you!!!! Thank you so much for this . Myyy this is life changing

[dannysamuel]

Most people venture into crypto to be a millionaire, meanwhile, I just want to be debt free

[albertjohansen]

Successful people don't become that way overnight. What most people see at a glance-wealth, a great career, purpose-is the result of hard work and hustle over time.

[earlybirdfinance]

The leverage effect can support you enormously to increase the net worth faster. But as with all borrowings, caution is of course required.
Nice Video !👍

[willlifter-motivationchann]

That tax avoidance advice and real estate and banking combinations are great!

[michaelpatras]

One thing I learned from this video is that I will never live in California.

[kabirsuda]

​ @The Better Men Project Hey, I didn't get that Collateral part at all. Could someone explain it to me?

[gurukid]

This is a good video but I am so lost right now. 😅😅😅 I'm definitely not rich so some of the numbers I'm seeing is not something I just have laying around. So I feel like none of these would work for me. I'm still trying to learn all of this stuff. I'm just trying to make more money, you know?🤷🏾‍♂️ That's why I subscribe to this channel. Hoping I can learn a thing or two about making money.

[TheFKLife]

Consumption vs Controlling assets
Comtrolling money making assets with debt creates cashflow - cashflow expands wealth creation
Consuming on debt is a spiral that ends in killing all cashflow and going bankrupt unable to make interest payments let alone principle payments

[epictcg]

Dang the real estate debt and the last 2 advice are the ones that seems to be the most reliable. Remember people, use debt and credit to buy asset. Not liability.

[PhillipS]

The greatest wealth-building tool is your income. With debt, you overpay and lessen the power of your income.

[alexandergurin]

Could you please cover the book think and become rich ?
Thank you

[CritterCamSoCal]

Well done. Did the one with my car borrowed at 1% interest invested in the market ca Ching $$

[banbana]

Awesome video 😍What program do You use to create this video?☺️

[DavidRamirez-fiev]

ive learned more on here than in school about taxes. that should tell us something..

[theburmeseinvestor]

Using good debt is great to get tremendous amount of money, but the most important fact to consider is ''time'' and ''certainty''.

[investorpuff]

There are two paths people take when seeking to achieve financial freedom. The first path is the short-term investing path and the second is the long-term investing path. If you were to choose a path based on the timeline alone, the short-term investing path will be the obvious choice. But that will be an unwise decision to make. The wiser decision is to ask yourself if there are more important criteria to consider than timeline; and there are. For example, you need to ask yourself; why am I investing and what end goal am I trying to achieve? You also need to know which of these two investment paths will deliver your desired end results faster. And finally, you need to know the path that possesses the most guarantee of delivering your desired result. Answering these questions will give you a better perspective on which path to choose and follow.

[yathishmoolya]

I have a question.. How do u pay off the debt which u borrowed from bank using your real estate property as the collateral?

[MultiDynamic]

Learning to convert liability to assets is the ladder step to be rich ..