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6 Ways Rich People Use Debt To Make Money
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- Опубликовано: 12 авг 2024
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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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Most people venture into crypto to be a millionaire, meanwhile, I just want to be debt free
That's very practical and smart goal, a wise man once said do everything you can to get outta debt, one of his tips to getting rich
Just do the right thing, by trading with an expert, I trust me you will be a millionaire and debt free
Assets that can make you wealthy
Gold
Crypto
Stock
Real estate
@Anthony Ramos When you invest in crypto you are buying a day you don't need to work.
Now is the best time to purchase and invest in bitcoin, stop procrastinating
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.
I totally agree with you
I have been trading offshore. I'm yet to make my first $5000, any recommendable expert to trade with?
Rather get an expert to trade with giving you the required mentorship for a successful profit outcome.
piece of advice
But I learnt the hard way, blowing over $3,000 account side trading with no mentor or expert
I am new to trading and my presumptions is that I will be needing an expert as you would lose all your capital and you drop off the market
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 !👍
100% agree 👆🏻
@@TheBetterMenProject I didn't get that Collateral part at all. Could someone explain it to me?
One thing I learned from this video is that I will never live in California.
I have been watching some videos and I was thinking about investing in bitcoin or forex , but still don't know where to start from, any recommendation?
Wow!!! this amazing vid!! mind blowing! 🤯
thank you, i've learned a lot !.
Omgggg I love you!!!! Thank you so much for this . Myyy this is life changing
Debt + Risk = things go wrong!
GREAT VIDEO!!!!
The greatest wealth-building tool is your income. With debt, you overpay and lessen the power of your income.
Yes, but a single stream of income won't really help us along the way, so it's always wise to find a way to create multiple income streams.
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
TQ Sir GOD bless you and family
Great video!
That tax avoidance advice and real estate and banking combinations are great!
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.
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.
This is helpful,thanks
Or you can set up your investment vehicle in such a way that you can generate offsets for the vast majority of the generated benefits.
Rich people own nothing but control everything. A great multi year education is worth the 10 years learning. At what age do you think most rich boys, yes mainly males, start learning about money? I am told today bits begin on their 10th birthday. One concept a month by age 20 and they are light years ahead of most others.
Also choose your teachers/ mentors very carefully. If you are the smartest guy in the room you are in the WRONG room.
Using good debt is great to get tremendous amount of money,but the most important fact to consider is ''time'' and ''certainty''.
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.
@The Better Men Project Hey, I didn't get that Collateral part at all. Could someone explain it to me?
Learning to convert liability to assets is the ladder step to be rich ..
This is the often disregarded thing by the people, they just treat liabilities as liabilities or a burden to pay off. I hope people can all turn their liabilities to assets.
Awesome video 😍What program do You use to create this video?☺️
ive learned more on here than in school about taxes. that should tell us something..
There is so much to learn out here! Schools are definitely less efficient at teaching this stuff
Well done. Did the one with my car borrowed at 1% interest invested in the market ca Ching $$
That’s great interest arbitrage! Great play Phil.
I like how they make this shit sound so easy but when you go to the fucking bank you can’t get nothing
You need a business, if you want to get a loan easy go to a credit union
Could you please cover the book think and become rich ?
Thank you
I made a summary for this book a little while back. Here it is! ruclips.net/video/enzteWv3chY/видео.html
Business debt in this context is known as accounts payable in accounting.
The principal method of using debt to invest positively is the use of leverage to exponentially multiply your returns. What is leverage exactly? Leverage is using borrowed money to increase your return on investment. Leverage can allow you to achieve returns that you thought were impossible but at a greater risk of losing your capital.
Using this technique or strategy can be a dangerous thing to some, as not all people can successfully hurdle their way out of leverage. It's either you lose big time or win a lifetime with leverage.
What about inheritance tax how do the wealthy get round that?
I have a question.. How do u pay off the debt which u borrowed from bank using your real estate property as the collateral?
Rent a couple of rooms
casted
Ok. Buy, borrow die scheme. I understand I borrow agains my property (remortgage?). But in normal circumstances bank will ask me to start paying that back after 1 month. So do I start paying with the money I just borrowed?
There is a major difference between refinancing one’s home and an investment portfolio.
If the real estate properties you are borrowing against produce positive cashflow that can be used to repay the loan amount.
Wish I new this before 😔😔
AMC 💎🦍
Tom doesn’t lose money in bad years unless he realizes that loss by selling his stock. Tell the whole story.
I have been watching some videos and I was thinking about investing in bitcoin or forex , but still don't know where to start from, any recommendation?
Same here ,It's strange how people talk about all the profits, they've been making through trading of bitcoin, while am here not making any profit at all. Please can Someone put me through on the right path.
Most time having knowledge or insight about a particular activity can as well be a pleasing exercise. I can boldly say that forex and crypto trading is one of the profitable money exchange services that elevates investors and their financial status.
That's true most people today have been having a lot of failures in forex and crypto sector because of poor orientation or bad experts
You don't make money on forex or crypto by holding your coins rather you trade to make gains
I believe your view
oh yeah
You never mention margin interest that you have to pay for borrowed money when ur trading on margin. And you don’t talk about interest you have to pay on borrowed money during the step up basis if you are funding old age with borrowed money. If you’re borrowing $100k against your property for 20 years at 4% then you’ll owe $80k in interest payments alone. This is flawed information you’ve provided so you can sound smart. You would have been better off paying the 30% tax. Obviously you don’t have first hand experience with what you are taking about
Not really, It could be slightly different, the 30M real estate could be rented in some form, to generate for the life style, and the stepup process, helped the inherited children to sell without tax , But I will research and understand this, never thought of death 😂
Moreover higher the collateral, smaller the interest rate
I get it now
Awesome
When we talk about the rich, we usually think about people who have enough money to live comfortably without any worry.
What if someone tells you that some of them use debt to make even more money?
Debt is a form of borrowing and it’s designed for making money.
Yes! You read that correctly! Debt can be used as an investment.
The wealthy use debt such as mortgage loans, car loans, credit card and personal loans to invest their excess money that they don’t need right now.
When you borrow something from a bank, and you repay the loan with interest in time, then you earn money on it.
The best decision I ever made in my life was investing in financial market. Trust me guys, it pays alot. And I have come to realize that investing in Digital Assets is more profitable than holding it and waiting for it to skyrocket.
Investing is key! Check out Financial Nutrition for more finance content!
Every family has one person who turn things around, you can be that person.
Invest now on real estate and watch how you become a millionaire in 3-4years, I’m a realtor I can help you .
Investing in the stock market portfolio is pure gambling. It's very easy to lose everything.
🙄🎶
Real estate is a great way to become homeless.
😂
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