How the Rich Use Debt to Get Richer (And You Can T

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Transcript

00:00Did you know that while many of us see debt as a burden, the wealthy often see it as a powerful tool?

00:05It sounds counterintuitive, but it's a key strategy they use to build massive fortunes.

00:10Here's how it works.

00:12Instead of spending their own cash on investments like real estate or stocks, they borrow money at a low interest rate.

00:17They then invest that borrowed money into assets that generate a higher return than the interest on their loan.

00:23For example, they might take out a loan at 4% interest to buy a property that yields a 10% annual return.

00:29That's 6% difference?

00:31That's pure profit, created with the bank's money.

00:34This strategy, known as leverage, allows them to multiply their wealth much faster than if they only use their own capital.

00:42It's about making debt work for you, not against you.

00:46If you found this helpful, be sure to like and subscribe for more financial insights.