Brad Hart explains why wealthy people use debt strategically. He shows how borrowing at low rates to invest at higher returns lets you buy more properties with the same money, using a rental property refinance as an example.
Chapters
Does debt equal wealth? Well, no, but the wealthy do often have a lot of debt. But let's look at this good debt versus bad debt. See, all 99% of the planet grew up with debt is bad. Don't have credit cards, don't get loans, don't borrow money in any circumstance. And in some cases that's true, but overall, mostly totally false. See, wealthy people have debt because they use good debt. So here's an example. If you buy a house as a rental, you put it on Airbnb, you might borrow money at, say, 6%, but make 20% a year after expenses. Maybe you save up that excess money for two to three years, then remodel the place, increasing the value, then refinance the whole thing and pay down the debt, releasing even more cash with which you can buy more properties and rinse and repeat. That's how you create money using other people's money. That's all debt is, really. You secure debt at a lower rate than what you can safely invest it at. That's called arbitrage. Using your own money is slow, slow, and every force is working against you, like inflation. The only way to really get ahead is to increase your income drastically, save on taxes, and use other people's money and debt to leverage bigger gains, all while not taking on too much risk yourself. Now, we know how to use good debt, and we know how to leverage it. It's called arbitrage. You need to learn this if you want to be truly rich. So if you have any questions, message me and obviously follow me, because I'll be dropping really good stuff like this, and I want to teach you to be rich.
