S2E9: How to Get Rich Using Good Debt

Most people view debt as a four-letter word. We have been conditioned that all debt is bad. We’ve been taught to fear debt. But not all debt is bad. There is good debt too.

Bad debt is debt that makes you poorer, such as credit card debt, car loans, and more. This is the type of debt used to buy liabilities. Ironically, this is the debt that those who say debt is bad get rich from by selling to the poor.

Good debt is debt that makes you richer, such as a loan for investment property or to purchase equipment for your business that will make you a return. This is the type of debt that is used to buy assets. The rich use this kind of debt to buy assets or create products that they sell to the poor, who often take out bad debt to buy them.

Alexandra Gonazalez-Ganoza explores the difference between good debt and bad debt and how the rich use good debt to get richer. Understanding good debt, and utilizing it, is an essential part of attaining financial independence.