How To Use Debt To Create Wealth Like Rich People

Warning, warning. Debt free can be a trap. It's interesting to me how many people focus on being debt free. And there's not necessarily anything wrong with that, depending on what your motive is. So I want to talk to you today about this subject. Rich debt, poor debt. How rich people use debt to create wealth. Did you know there's a difference between how rich people and poor people view debt? There's a difference between how rich people and middle class people view debt. And so today, what I'm going to do is I'm going to give you all of the perspectives and the poor person's perspective of making money and et cetera, using money and borrowing money. I'm going to give you the middle class person's view, and I'm going to give you the rich person's view. And then you get to pick one. Because I believe you're smart. And hopefully you believe you're smart. So that makes at least the two of us. And so I'm gonna give you a different perspective because people say all the time, well, Maren, I don't wanna borrow money because I'm almost debt free. But I've got news for you. Maybe you've never thought about this before. Debt free is still zero. Now, I remember the first time I ever saw a rich person borrowing money. And I was so confused, like, why would you borrow money? You're rich. Like, you could just write a check for it. And. And so a lot of times those of us who are wealthy, when we buy things, we could pay cash for it, but we borrow the money for it instead. And I'm going to tell you a little bit later on when I get to the rich people part, why we do that. So I want to talk to you first and foremost about poor people.

So first thing we're going to do is we're going to talk about poor people. And.

Number one, poor people.

Calm down, my Aaron, I know you're excited. Okay? How poor people make money, how poor people spend money, and how and why poor people borrow money. So how and why do poor people make money? How and why do poor people make money? How do poor people make money? Well, how. How do poor people make money? How? Well, they exchange time for money because they believe this lie that time is money. So poor people make money by exchanging time for money. They'll say, I'll work for you for X amount of dollars an hour. And by the way, there are some middle class people who also exchange time for money. But we'll get to that in a minute. But Poor people, basically, one of the reasons they're poor is because their own effort over time is the only resource they have to use to make money. So if you think about wealth, if you think about wealth as a spiritual outcome, right? Wealth, abundance, spirit is abundant, right? Like there's no limit to spirit. It's limitless. It's abundant, right? There's so much that there's more than enough for everybody to have more than enough. There'll still be more than enough leftover. It's like oxygen, right? But because wealth is a spiritual outcome.

If you are using a limited. By the way, it's not only spiritual, it's an unlimited spiritual outcome. So if you look at the four levels of value, being the lowest level of value.

Is implementation.

The resource that you use on that level is you use your muscles.

Over time. In fact, I'm going to do it this way. Use your muscles over time to create wealth. Which means you're moving something, you're lifting something, you're carrying something, you're driving something, you're fixing something, you're building something, you are using your muscles over time. Implementation is the lowest level of value. And so muscles are a what, physical or spiritual resource? Which one? Physical muscles are physical.

Time limited or unlimited resource limited. So what you're doing is you're multiplying a physical resource times a limited resource and hoping for an unlimited spiritual outcome. This is why working for money, this is why this can never make you rich. Now, you can do this and get rich, but you won't get rich because you did that. Okay, you can do this as you are creating wealth, but you're not going to do this and get rich because you did this. So the lowest level of.

Value, because wealth is the result of value creation, right? So the money that you make is the result of the value that you create for somebody other than yourself. I did a video a long time ago called Money is not wealth. And if you want to know more about that in detail, go watch the video. But money is not wealth. Well, if money is not wealth, what is wealth? Wealth is your ability to create value for someone other than yourself. The greater value that you can create for the greater number of people that are not you, the more wealth you have. Because that's what wealth is. Wealth is your ability to create value for somebody other than yourself. So this is the lowest level of value. So you multiply a limited resource times a physical resource, and then what you get is you get a limited outcome.

Why? Because that's all it can produce. Everything Reproduces after its own kind. And so poor people make money by selling their time. And then what do they do? Because.

Oftentimes, at least this was the case when I was poor. Oftentimes when you don't have enough money to do the things that you dream about. What you do is when you come home from working for money is you anesthetize yourself by doing activities that don't have the ability to make your life better. Like watching tv, like drinking a can of beer, like hanging out with your buddies at the bar, like joining a bowling league. There's nothing wrong with joining a bowling league. There's nothing wrong with in of itself watching television unless you're broke.

Right? Then the television is electronic income reducer. So what happens is we anesthetize ourselves. What do I mean? We attempt to alleviate our pain by either drowning it in some substance or watching somebody else live a fake life vicariously on the electronic income reducer. So what we could do instead with that discretionary time is we could have some discretion and do something during that time that's not going to be exchanging time for money. We can learn a new skill during our discretionary time. We could build some new relationships with some different people during our discretionary time. Right? And so we could build a system with our discretionary time. So how poor people make money is by exchanging time for money. Why do poor people make money? Poor people make money for one reason. So if you look at my concept in trash man to cash man of the financial house, right? You've got your income window, right? Most people get their income from their job. This is the trade time for money. So that's these people. So the income comes into the income window. Then you have your IPA window.

And then down here you have your outgo window. And then up here, in here you have your. Over here you have your WRL window. So ipa, what's that stand for? Income producing assets. Poor people don't have any income producing assets. That's why they're poor. They are their only asset. Wealth reducing liabilities. Well, they don't have good enough credit to have a lot of wealth reducing liabilities. So don't really have a lot of those either. Maybe a car, maybe they own their own house. But the primary purpose of a poor person making money is to pay bills.

Do you like your job? What do people say? What do poor people say when you ask them? Do you like your job? I gotta pay the bills. Think about it. That's what I used to say, you gotta pay the bills. So it doesn't matter if I like my job or not. I gotta pay the bills. So I'm gonna go do this work that I don't wanna do because I gotta pay the bills. Okay, cool. So this is how poor people make money. This is how why poor people make money. And then when it comes to borrowing money, how and why do poor people borrow money? This is really sad.

And I know this because I used to be poor. How do poor people borrow money? Poor people. When they borrow money.

Poor people borrow money. Poor people.

People borrow.

At high interest rates. In fact, I'm just going to put that at high interest rates. H I R. High interest rates. And that looks like a B, but it's an R, trust me. Okay, so high interest rates. And they borrow money to buy depreciating liabilities.

And oftentimes because they don't have. Generally don't have good credit, they get intro credit cards with higher interest rates, like 24% or higher, 28% or. I don't know if any of y' all remember this. Like, if you have bad credit, you can start building your credit by.

I don't know if any of y' all remember that. Get the Fingerhut catalog. You order some stuff on Fingerhut. Anybody remember that? Anybody on YouTube remember that? And so what happens is you buy stuff on Fingerhut. So you could. They'd sell it to you on credit, charge you an insane interest rate. But then you start developing some credit, and then you get a Sears card or J.C. penney's card or a Boscov's card if you live in Harrisburg, Pennsylvania. Right? And so you get your department store cards. And then all of a sudden you work up and you get a Visa card. It's got an $800 limit on it. And you're like, so excited because I got a Visa card. And then you go buy a bunch of junk, and then you're late and your credit's still bad. So credit borrowing money for poor people is generally a trap because they don't have a strategy for borrowing money. They're just borrowing money to buy stuff that they don't have the money for. Not a good idea. This is how poor people make money. This is why poor people make money. This is how poor people use credit. And why they use credit is because they want stuff that they can't afford to buy. Okay, well, that's not. That's not where you want to be. Like, you don't want to be buying stuff out of a Finger Hut catalog. No, I mean, no shade to fingerhut. I mean, they gave me my first opportunity to buy stuff on credit. Okay, so. So you don't want to use the Fingerhut catalog. So middle class people, let's look at middle class people. Why and how, like how, why and how do, or how and why do poor people, middle class people borrow money? So middle class people make money by same thing. They either sell their time, right? Selling their time, just like.

And they may have, they may have some investments, some small investments. Middle class people don't have a lot of investments. Some small investments. They might invest in a little Airbnb or they might invest in, they might invest in.

A couple of stocks and they're saving towards retirement. The objective of making money for middle class people, Financial house. Again.

They got their income window from their job, right? And they have a very small IPA window. They got a couple of investments in there and they have really good credit. They pay their bills on time so then they can buy wealth, reducing liabilities that make them look rich. Because then at least people won't know that I don't have money. So I'm going to buy a more expensive car than I need and I'm going to live in a more expensive neighborhood than I need to live in and I'm going to buy designer clothes. I'm going to do all of this on credit. And so what happens with middle class people and then you have the outgo window is they borrow money to buy stuff and they pay their bills on time and so they accumulate a bunch of stuff that becomes worth less over time and then that goes out the door in the form of bills. So poor middle class people are focused on building their credit to buy things.

Like I use credit cards, I don't use debit cards. I'm going to get to that strategy in a minute. I'm going to show you when I show you why the reason rich people borrow money is very different than the reason poor people borrow money. Okay? So.

This is why, this is why. This is how they make money. They sell their time and they might even get a salary. Maybe they're not selling their time by the hour. They may have a salary, right? And now they make even less money than they'd make if they had a, if they were selling their time for money. And so then what happens is they do this so they can build up a lot of credit. They borrow a lot of money. Some of them still have college debt, so they might be a little bit more educated, but they're going to Take. It's going to take them 20 years to pay off their college debt. And so they're working all this time for this magical time in the future called retirement.

I don't even know, I'm not exaggerating when I say this. Retirement. I don't even know any rich people who desire to retire.

Like, I'm 63 years old. Are you gonna retire in two years? Retire and do what? Like.

What am I gonna do when I retire? Sit around, do nothing? Like, why is that inspiring to people? Like, why does, why is that an aspiration? I want to get to a place where I don't have to work for money. Well, get to a place where you don't have to work for money. But, like, don't wait to do that. You can start, you can stop working for money now and start working for other reasons now. Like, I work to build relationships. I work to build systems. I work to learn new skills. I don't work for money. The money's just a byproduct of creating a lot of value for other people. Okay, so.

Poor people, middle class people, they borrow money and then they pay their bills on time, but they don't ever really just pay off their. They don't. Like, I'm not debt free, but I pay my credit cards off every month. I have no desire to be debt free. In fact, in 2025, I fully expect to accumulate hundreds of millions of dollars of debt. And I know, like, when I say that, that's like, what did you just say? Yeah, that's what I said for a whole bunch of reasons. Wait till I get to it. So that's middle class people. But let's get to the part that we've all been waiting for. Rich people.

Why do rich people borrow money? Rich.

Rich people, debt. Why do rich people borrow money? Well, first of all, before we do that, let's talk about how rich people make money. How do rich people make money? Well, we don't make money by selling our time, okay? And we may sell some of our time, but it's not what you do to create wealth. So how do rich people make money? Here's how we create money, and here's why we create money. How, how we create money is by creating.

Value.

For.

Others.

Now that may sound kind of esoteric, so I'm going to break it down to you. So what do I mean when I say creating value for others? First of all, you can't create value for someone until what, you know, what's valuable to someone? So the first thing I've got to do is I got to discover what's valuable to you. If I know what's valuable to you, then I've got at least got a chance of creating value for you. Right? So what creates value? Like, where do values come from? Like, where do your values come from? The people in this room, the people on this YouTube, watching me on YouTube right now. Where do your values come from? There are three places values come from that come to mind. Like, top of mind. Are you ready? Number one. Values come from past perceived voids. Past perceived voids create present, pursued values. Past perceived voids. What does that mean? That means something that you felt like was missing in your past.

You desire that. That's valuable to you because you always desired it but never had it. So I remember when I was a kid, my good friend Stan, his brother lonnie, had a 68 Pontiac GTO. I love that car. I wanted to buy it from me. He wouldn't sell it to me. I love that car so much. I'm like, I want a Pontiac. A 68 Pontiac GTO. It's a car I've always wanted. I know that sounds crazy. Like, why would you want a 68 Pontiac? You know? Because you drive down the road, it does this thing, you know, it's crazy. Okay? That's how it feels when you're in the car. It's like. It's like a floaty, boaty, right? And so I found one on Facebook. Marketplace. 1968 Pontiac convertible. Pontiac GTO convertible. And I bought it, got my dream car. So exciting. Why? And I drive it. It's the worst driving car I have, but I still like driving it. I like to put the top down on a nice cool day and drive around and go to the golf course in it or drive to the restaurant or whatever. It's like. It's like, oh, man, that car is so cool. But I already know it's cool. I knew it was cool before anybody told me. Why? Because it was a past perceived void for me. I'll attract it. So if somebody feels like something was missing in their past, if you figure out a way to create that and present it to them in the present, they will more than likely say yes. But you have to care enough about their past perceived voids instead of using them to fulfill your past perceived voids. You have to stop thinking about yourself long enough to create value for somebody other than yourself. Are y' all with me? Okay, so, so. So creating value for others, past perceived voids is one place that value comes From. Where's another place value comes from? It comes from present perceived virtues. What does that mean? Things that people in the present perceive as good or virtuous, as valuable. People who go to the gym. You know why they go to the gym and pay for a gym membership? Because they perceive fitness as value as a virtue in the present. So therefore, a gym can sell them a membership. Like, I'm 63, and, like, my cells don't regenerate as fast as they used to when I was 33. So when I injure myself, I go to my regenerative medicine doctor, and I might get, like, a $50,000 treatment.

Well, why would you pay $50,000 and insurance doesn't cover it? Why would you. Why would you. Why would you buy a $50,000 treatment so that your shoulder stops hurting? Because not having pain is a present perceived virtue for me. Are y' all tracking? Okay? And so people will spend money for in the present. Things they are value that they value in the present. Okay? So if I want to create wealth as a. If I want to be wealthy, I have to be empathetic enough to care about what other people value, and then I have to be perceptive enough to conceive what other people value, and then I've got to be creative enough or productive enough to create what other people perceive as valuable. Are y' all tracking? And so what I do is I'm like, oh, they would like to have this result. I know how to get that result. I'll just show them how to get that result and let them pay me. Are y' all tracking? So wealthy people create value for others. That's how. That's how we. That's the primary way we create value. If you think about flat, like, Elon Musk created the Tesla truck. Now, I don't want an electric truck. I don't want an electric car, but a lot of millions of people do. So many people wanted a Tesla cybertruck. Elon said, tell you what, you send me $100, I'll put your name on the waiting list. You can have your money back if you decide you don't want it. But you put your name, and millions of people send $100.

You get a million people to pay you $100, that's $100,000,000. If you get 10 million people to pay you 100 dollars, man, that's like a billion dollars. That's probably enough to build a factory, to build a bunch of Tesla trucks.

Even if a bunch of people cancel, right? So he created something that People perceived as virtuous in the present electric vehicles. And so because so many people believe that that's virtuous or good right now, made him the richest man in the world. Okay? So creating unique, creating value for other people is how rich people create debt or create wealth. Okay? Unless of course, there's some kind of shady, underhanded, illegitimate criminal. And there are people like that too. But that's, that's not who I'm talking to. I'm not. You have no desire to be those kind of people. And if you did, I don't have the ability to teach it to you. So that's not who I'm talking to. Okay? So, so we create wealth. We, we create value for other people. Another way we create wealth is making.

Our.

Money work.

What do you mean making your making our money work? So we like, we invest money so money can work for us when we're not working.

We build systems and invest in things that can make money for us when we're not working. See, poor people, middle class people can only make money when they're working. I can make money when I'm not working. Why? Because my money that I have invested never takes a coffee break, never goes on vacation, never takes time off, never gets sick. It just keeps on making money. How many are tracking way back? Me, My peeps. Okay? And so what we have to do is we have to figure out a way. How can I get my money working for me? Wade B. Cook, I got this phrase from him. The reason you have to have a job is because your money is unemployed.

Get your money out of the unemployment line and make it work for you. You worked for it. Make it work for you. Okay? So why do rich people make money? Well, that's how rich people make money. Why do we make money? Here's why we make money. The primary purpose, like when I'm. When I'm building my financial house, so we have our income window. And our income comes from.

Our creativity. We come up with these ideas, right? And that idea makes money. And then, so if we have our. I'm going to change that. We're going to. We have our IPA window, our income producing asset window. This is our income window.

And then we have our wealth reducing liabilities window. And then we have our outgo window. Okay? Poor people, when they get money, it comes down here and goes out there. Middle class people, when they get money, it comes down here and then goes through there and then goes out there. Rich people, when we get money, here's the first thing we do with it. Take that money and put it over there. Takes that money and put it over here.

When I first put that money over there, nothing happens. This is why, that's the number one reason I believe most people never get rich. Because when you first start, we don't put all of our money over there. I mean, when you first get started, some of your money will go down here and some of your money will go down here, but you'll put some more money. Then you get some more money, put it over there. You put some more money over there and eventually one day, all of a sudden this thing starts giving this thing starts giving it back to you and it says, oh, okay, you're going to do that, I'll do that. And then you keep doing this. And then the amount that this window gives you, this window starts getting bigger. It starts getting bigger, it starts putting more money back here. And eventually this window gets so big that not only does it give you money, but it also pays all your bills. It also pays off all your credit, all your debt. This is how rich people think. This is why we make money. We make money to feed our income producing asset window, so our income producing asset window can pay all of our bills and pay off all of our debts and provide us income. That's like now, most people never think about this, right? But when it comes to money, this is all I think about. How can I make money to go buy something? I don't ever want to make money to buy something.

That doesn't make any sense to me. If I want to buy something, I'll go come up with a new idea. I'll let that new idea make me some money, and I'll take some of this money and go buy some. But the primary objective of every, all the cash comes in here. The primary objective is to put it over here. So it keeps on and this window starts kicking off so much cash that eventually this window becomes so big that it makes all of the other that wind. Like, I mean, not that window but this window and this window. They become nebulous, they don't matter. They're so insignificant. They're like less than a mosquito bite.

That's the, that's why we make money. Now why do rich people borrow money? Because that was confusing to me. I remember first time, my friend, he's, he grew up in a family where they had owned an oil field. And so the guy's rich. He said, yeah, I'm borrowing money to do it. Like you're borrowing money, what are you borrowing? Money for. You have money?

Well, see, what rich people realize is the money that we are putting in our income producing asset windows. This money that I'm putting in this window makes so much money and it makes so much money that it doesn't make sense for me to take money out of here to buy something.

So I can either take money out of my income producing asset window to go buy something or I can borrow money from a bank. So let's say I borrow the money from a bank and let's say the interest rate is terrible. Let's say the interest rate that, let's say I'm borrowing money to buy a car and let's say I've got to pay 7%. That's a crazy interest rate for a car, right? 7%. But it's 7% simple interest. It's 7% per year. So let's say it's $100,000 car. Okay, so if I'm borrowing, if I'm borrowing $100,000 to buy a car.

Right? And that $100,000, I'm paying $7,000 per year in interest. Well, the first year, because the last year I'm also paying down the principal. So the next year the interest, the amount I'm paying in interest is going to be a little less and the year after that's going to be a little less and the year after that's going to be a little less. But If I have $100,000 invested, so I did not because of this, but I did some calculations just on the returns of my crypto investments in the last two months. By the way, if somebody reaches out to you from Instagram or YouTube or TikTok and they say they're me and they're selling you a crypto thing, it's not me, it's somebody pretending to be me. Like I don't reach out to people, I don't inbox people and offer them sales, some stuff for sale. So don't get scammed by somebody who's imitating me. Okay, cool. Okay, so if, but if I take, I did some research and here's what I figured out, here's what I found out. My invest, my crypto investments in the last two months has made me about 6.5% per month. So if you multiply 6.5. Okay, let's just go ahead and do that.

And by the way, this is not simple interest. This is compound. But we're going to, we're going to treat it as simple. If you multiply 6.5 and I'm going to do it here because my phone's over there. I don't want to walk off camera. See a calculator? Yep. Give me the calculator. So If I take 6.5 and I multiply it times 12.

That'S 78% that I'll just. That my crypto investments will make me this year, which means if I take money out of my crypto account.

And $100,000 to pay for that car, instead of using the bank's money, instead of it costing me $7,000 in interest, it cost me a loss of 78%. So 78% of $100,000, it cost me $78,000 that I would have made. So I'm now $71,000 worse off because I use my money instead of the bank's money. You say, Myron, what are you saying? Here's what I'm saying. I'm gonna put it in a simple sentence for you. You ready? Rich people borrow money because we can always use the bank's money cheaper than we can use our own.

And that's why we don't focus on getting out of debt. So that's one reason we borrow money. One reason we borrow money is because we can use the bank's money cheaper than we can use our own. Another reason we borrow money is because when I borrow money now, this is now. When I talk about borrowing money now, now I'm talking about a different kind of debt. I'm talking about consumer debt, credit card debt. Why do rich people use credit cards when we have cash? Why would I use a credit card.

When I have cash? That doesn't make any sense. Why do we use credit cards? The reason we use credit cards is because credit cards have these things called points. Now, what are points?

Points are a fancy word for dollars.

Fancy word for dollars. What does that mean? Points are a fancy word for dollars. So I'm gonna look at it now. I know that in the last 30 days.

So I paid my American Express card off last month. Okay? I paid it off last month and the month before that and the month before that and the month before that. Oh, and the month before that. Okay. Just want to make sure you understand. So I literally right now have a balance on my American express card of $141,396.32 that I spent in the last 30.

My American Express business platinum. But some of you say, well, why did you do it? And I'm going to pay it off, and it's due on the 22nd I'm going to pay it off before the 22nd. Say, why would you borrow that much money? Here's why. Because they give me these things called points.

And I use my points all the time. Right now, just on that card, I have 3,414,000 points. How much is that? $34,000. I can go on Amazon and buy $34,000 of whatever I need for my business, and it cost me zero.

Because I use points instead of cash. You have a Marriott card. You put points on your Marriott card. You can go stay in a suite. That would cost you $16,000 for free.

Rich people, we borrow money because it makes us money. If I would have spent that same money, if I would have spent that $141,000 by writing checks or by putting it on a debit card, I would have earned no points. But if I earned 2 1/2 points, and I don't know if it's 2 1/2 points or whatever it is, might be 1.75, depending on what. Let's just say I earn 1.75 points on $141,000. How much money did I make? And you're saying, but you didn't make it. My ear. And they, okay, I'm gonna let you believe that. Oh, by the way, I forgot to tell you. When I borrow that money on my American Express card and they charge me a fee, I get a tax deduction for that fee. And because everything that I bought on my American Express card is for my business, I get a tax deduction on the whole 141,000. Okay, yard tracking. But if I say, well, you know what, Myron, let's take that 141,000, we'll just make it even. 141,000 times 1 point.

Seven percent.

I made 200. That made me $239. You say, but it's only $239. Right. That's the difference between how rich people think and how poor people think. So you think it's only $239? I think it's only another $239.

Are y' all tracking? Now?

The other reason we borrow money.

Is sometimes we borrow money. We borrow money as income.

What does that mean when you borrow money as income? If I own a real estate property, I can withdraw. I can borrow against the equity.

Of that property. I can use that equity as cash and I pay zero tax on it.

Say, but don't you have to pay it back? I do. But the tenants who rent the property Pay off the debt.

Wait, so you're telling me that you can borrow money, use it as tax free income, and somebody else pays it off? Yes. And every time I borrow to buy real estate, every time I borrow to buy real estate, I get appreciation. What does that mean? The property that you bought becomes worth more over time. Why? Because the money in your pocket becomes worth less over time. So the house that I bought in 2016, that I live in right now, that house that I bought in 2016 for $405,000 if I wanted to sell it right now, but I'm not really interested in selling assets. But if I wanted to sell it right, I could sell it for over a million dollars.

Which means the money that I paid in mortgage payments over the last 2016, eight years, I get that back and a whole bunch more if I wanted to sell it. But I don't want to sell it. Why? It's an asset. Why would I want to sell it? I can borrow against it, and I can use the money that I borrow against it as income.

Oh, oh, by the way, I didn't even tell you the best.

I can rent that house to my business.

And I can use it as a podcast studio.

And I can use it as a YouTube set, and I can build a YouTube channel. And the YouTube channel makes enough money to pay the rent to me, which I use to pay the mortgage.

And it just becomes a cash machine. It becomes a perpetual cash machine.

Are y' all seeing the like. Poor people are afraid of debt. Middle class people are used by debt. Rich people, we use debt to create wealth. So.

So we borrow. We borrow as income. We use debt as income. Borrow as income. It changes the game. But poor people are afraid to. But, but how much are the payments? Stop asking how much stuff costs and start asking how much is stuff worth.

It'll change the game for you. Change the game for me. So borrows income. Okay, so I'm gonna give you one last play. I'm gonna give you one last play for those of you who have a house and you have a mortgage. I'm gonna give you the play. Run this play.

It's called.

I did this in 2008, the first time.

A heloc. What's a heloc? Home equity. Line of credit. This is the most important word in that whole thing. Line.

It's not a loan, it's a line. What's the difference between a loan and a line? A loan is a one way door. You can put money in it, but you can't take money out of it. Like, you borrow the money. When you put money in the pay off that loan, you can't come back and say, hey, that money I paid you last week, I want some of it back. But if it's a line, you can put money in it and you can take money out of it. In fact, when you get a home equity line of credit, they give you this really cool thing called a.

What, a checkbook. Some of them will even give you a debit card against your equity in your house. You say, why would I do that? Because it makes sense.

If I. So here's what, here's what, here's what I would be willing to do if I had equity in a home. Let's say you've got.

$200,000 of equity in a home. The bank will give you a line of credit up to 80% of that $200,000 worth of equity. So they'll give you a home equity line of credit for $160,000. Okay?

If you have that much. If you have, like, let's say you only owe 100,000 on the house, you owe 100,000, they'll loan you 160, 80% of the value. So now what you do is you take the home equity line of credit, which is you get the whole 160, you pay off the 100,000. So, in fact, I'm going to draw it for you. So you got your house. The bank owns 100,000 of the house.

You own 160,000 of the house, 160,000 of the house. The bank says, we will give you a line of credit for the part of the house you own. You say, okay, I'll take it. So you take the 160,000, and the first thing you do is you pay off the 100,000. So now how much do you have Left? You have $60,000.

And you paid off your mortgage, but you got access. You have access to $60,000. So now let's say you make take home. I don't know. I don't know what people make. But look, let's just say you make $5000 per month.

If you make $5000 a month and you take the $5000 a month that you make as income and you pay down, you put it into your home equity line of credit. So now you pay that $5,000 in. So now some of it went to interest. So let's just say now you owe 156,000, let's say thousand dollars that went to interest, right? So you owe 156,000. Okay, so 156,000 is what you owe. But now, now you have bills, but you took your whole paycheck for that month and you put it into your home equity line of credit. Let's say your bills are 3,000, okay? So you take 3,000 and you pay your bills. So now that takes us back up to 159,000. Right.

But then the next month, you pay the 5,000 in again, and it takes it down to 150. 156,000.

Actually, it'd be less than that because you'd have some principal, let's say 154,000. And then you just keep on doing this. And what happens is, because you paid off this loan, this debt here, the money that you're borrowing, the money that you borrow out of your home equity line of credit to pay your bills every month, this $3,000 that you borrow every month. But every month you're also taking this $5,000 and you're paying down this equity. What happens is you end up paying off this mortgage. Instead of it taking you 10 more years to pay it off, it might take you four more years to pay it off. So you're using debt to eliminate. You're using a home equity line of credit to eliminate your debt. Now you want to take this to, like, the ultimate extreme.

Like, this is the ultimate extreme. You ready? When you buy your house.

Buy it as a duplex.

And so you live in this side, this is your house.

This is your tenant's house.

And then tenant pays the note, and that note pays off both properties. So you get to live here for free. And then when you borrow home equity line of credit now, you don't even have a mortgage anymore. You just have electric bill, gas bill, insurance, et cetera. This is why rich people borrow money. This is why I've had a home equity line of credit since 2008, and I use my home equity line of credit to pay down debt faster.

It'll change the game for you. In fact, here's why banks want you to refinance your house at a lower interest rate.

You think they want you to refinance at a lowest interest rate because they care about you having a lower payment? Yeah, we want to help you out. We're going to give you a lower payment. That's the sales pitch.

That's the large print that giveth. Do you all want to know what the small print that taketh away says when you refinance your house at a lower interest rate? You just started the whole 30 year amortization process, period over again. And the majority of the money that you pay in the beginning of the loan, the majority of it goes to interest. So even though your interest rate is lower and you're making a smaller payment, you're paying them more interest over time than you would have had you not gotten a lower interest rate with a small, had you not refinanced your house and got a lower interest. So instead of getting a home equity loan or instead of refinancing your house, get a home equity line of credit and, and use your line of credit to pay your debts and your bills. And don't use the buy junk because then you defeated the whole purpose. Use your home equity to buy things that make you money. The last thing I'm going to say is this. The primary. Just like when we borrow money, just like when we make money, the primary purpose that rich people the primary purpose that rich people use to borrow money is rich people borrow.

Borrow.

To make.

Money.

Why do rich people borrow to make money? To create.

To create.

Wealth.

Faster.

When I bought this building in 2022, I could have paid, I could have written a check. I could have just wrote my check. Why would I do that? Why would I take to pay off a building? So I can. But I'm debt free.

And.

When the bank said, we'll loan you money to pay for this building, you only have to pay us 5. Instead of paying the whole 625,000, why don't you just pay us however much I paid down? I think I paid 200 something thousand dollars down. And then pay us $5,000 a month. Okay.

Well, our two YouTube channels that we produce out of this studio this month will make us $70,000.

This is what I mean when I say we use. So.

Whether it be in your business or in your personal finance, if it's the financial house of your business or the financial house of, of your personal finances.

The velocity.

Of this window and the velocity.

Of this window need to be faster than the velocity of this window and this window.

Now, I've said this before, I'm going to say it again.

Wealth is measured more in time than it is in money. Let me say it again because some of y' all didn't get it. Wealth is measured more in time than it is in money. What does that mean, Myron? Well, if you make a million dollars, are you rich? It depends. What does it depend on? How long does it take you to make it? If you make 25,000 a year.

And you work for 40 years, you made $1 million. Are you rich? No, you're not rich, but you made a million dollars. How are you. How come you're not rich? It took you too long. If you make that same million dollars in a year, are you rich? Yes, you are. Now, you ain't Bill Gates rich, but you're rich. A million dollars a year, you're rich. Trust me. It's $84,000 a month. You're rich. You have to be really, really dumb or really, really extravagant to blow 84,000amonth. Okay, so you make a million dollars. You're rich if you do it in a year. If you make a million dollars a year, you're 40 times richer than that person.

40 times. What is time? Time is a measurement of time. 40 times. Wealth is measured more in time than it is. Both the person who makes it in one year and the person who makes it in 40 years both made the same amount of money. How come this person is richer? Because they made it faster. If you make a million dollars a month, you're 12 times richer than this person and 480 times richer than that person.

Not because you made more money, but because you made it faster. So if that's real, and I believe it is, then the secret to you creating wealth is not you making more money. It's you making money faster. In fact, I submit to you that everybody listening to me right now, if you make any money at all, you make enough money, you just make it too slowly. What does that mean? Well, see, you spend money all day, every day, right? Because right now you're spending money. I'm not spending money right now. If you live in Florida and you have an air conditioner in your house, the sun is out, it's hot out there. You're spending money because your air conditioner is running and you have a refrigerator and that's running. And you might have a sprinkler system and that might be running. You spend money all day. Every time you flush a toilet, you spend some money. Money down the toilet. Okay? Every time. Every time you spend money, every time you flush a toilet, every time you open your refrigerator door, every time your air conditioner comes on, every time your heat comes on, every time you drive your car, you are spending money all day, every day. And, and you think it's okay for you to get paid once a month or once a week or once every two weeks, and you're not willing to do something to increase the velocity with which you get paid. That's why you're stuck because you're focused on making more instead of making the same amount faster. If you take your annual income, you start making that every month, you're 12 times richer. You take your monthly income, start making that every week, you're four times richer than you used to be. And so don't think so much about increasing the volume of your wealth creation. Think more about how do I increase the velocity of my wealth creation? Because if you increase the velocity of your wealth generation, the volume of your wealth creation over time will automatically get bigger. That changes the game for you. And this is what I mean when I say rich debt, poor debt. There's a difference between why rich people borrow money, why and how poor people, middle class and rich people make money, spend money, and borrow money. So I hope you will, like, sit down with this video with a notepad and a paper in your hand, make some decisions based on this new awareness. Set a new intention based on this new awareness that you're going to start getting richer today because you're going to start doing things with your money that, that make dollars and not just cents. Thanks for watching. I appreciate y' all being here. Stay blessed by the best and we'll see you in the next video. Bye for now.

Richard.