In this video, we break down why bad debt buys liabilities while smart debt buys assets, and 2 of the strategies the top 1% use with debt.
If you borrow money to buy a luxury car, it loses value while the interest keeps growing. If you borrow money to buy a cash-flowing rental property or a business earning more than the interest, the asset helps pay back the debt. The top 1% also don't sell their investments when they need cash. Instead, they borrow against their stocks or real estate as collateral, letting their investments keep growing while getting the cash they need, often avoiding capital gains taxes from selling.
The full video explains the complete debt architecture the wealthy use to build long-term wealth, including real estate leverage, business financing, and the buy, borrow, die strategy.
This is Part 18 of The Money Formula's Millionaire Behaviors series — subscribe for daily videos on money mindset, wealth building, and financial freedom.
This content is for educational purposes only and is not financial, investment, or tax advice.
