Debt Paradox: Why Do the Rich Owe More?

Robert Kiyosaki said a heartbreaking thing: those who think about being debt-free often remain very poor.

This guy is worth over a hundred million, and his logic is: the understanding of debt is completely opposite between the rich and the poor. The poor see debt as a trap, while the rich see it as leverage.

Good Debt vs Bad Debt

The difference is very simple—

• Bad Debt: Spending money to buy consumer goods (auto loans, credit cards)
• Good Debt: Borrowing money to buy income-generating assets (real estate, business)

For example: you have 100,000 yuan.

Plan A: Buy a house to rent out, monthly rent is 800 yuan, annual return rate is 9%.

Plan B: Divide into 5 parts, with a down payment of 20,000 for each, borrowing 80,000 from the bank to buy 5 houses. Calculating with the same rental income, the annual return rate directly doubles to 18%.

The money borrowed is actually being repaid by the tenant on your behalf. This is the power of good debt.

But the risks really exist

However, Dave Ramsey fired back: You assume that assets are always making money. What if they don't? In the year of the 2008 housing crisis, how many landlords were left holding their rental properties, with tenants running away, while they still had to make their mortgage payments?

So the path of Qingzhai is only suitable for:

1. First, clear the bad debts (credit cards, consumer loans)
2. Increase the credit score
3. Only then can one borrow good debt at low interest rates.

In other words, ordinary people need a stepping stone to play this game of the wealthy.