If Loans Are Bad, Why Do Rich People Use Them

Описание: Is debt always the enemy of financial freedom? Most personal finance advice treats all debt as a sin, but the reality is more nuanced. Debt is a lever: used poorly, it crushes you; used deliberately, it can accelerate your net worth.
In this video, we break down the difference between toxic liabilities and strategic assets, backed by data from the Federal Reserve and the OECD.
👇 What We Cover in This Video:
• The "Debt Lever" Concept: Why unserviceable, short-term debt is dangerous, while cheap, long-term debt can actually improve lifetime wealth.
• The Math of Interest: How high-interest debt compounds against you (like credit cards at 18–25%), while low-interest fixed debt compounds for you when assets grow.
• The Inflation Secret: Why inflation punishes savers but quietly rewards borrowers who hold fixed-rate debt.
• Consumption vs. Assets: The critical difference between using debt to "pull consumption forward" (risky) versus using it to build long-lived assets.

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📝 The 3-Question Debt Framework
Before taking on any new loan, use this simple checklist to determine if it is a trap or a tool:
1. Safety: Can I service this debt comfortably even if my income stalls for 6–12 months?
2. Math: Is the interest rate below my long-term earning or investment growth?
3. Purpose: Does this debt build assets or future earning power?
If the answer is NO, it is likely consumption debt that will hurt your financial future.

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📊 Key Stats Mentioned:
• Mortgages make up ~70% of household debt but have the lowest delinquency rates.
• Households with high debt-service ratios (cash-flow stress) are more fragile than those with high absolute debt volumes.
• Debt becomes "toxic" when it is variable, short-term, or used to fund lifestyle inflation.
#PersonalFinance #WealthBuilding #Investing #MoneyManagement #FinancialLiteracy #Debt #Inflation