Debt Is a Tool: The Three Types That Actually Build Wealth
Dave Ramsey is dumb.
He has said: "Debt is not a tool; it is a method to make banks wealthy, not you."
Wrong.
Also, "A credit score is nothing but an 'I love debt' score."
Also wrong.
And, "The only good debt is a debt that is paid off."
Just wrong.
Most people hear "debt" and immediately think of the trap. The sinking feeling. The weight.
And look—I get it. Debt can be those things. I've been there. My grandfather's signature advice to me was "Never go into debt."
But Dave and my grandpa were both wrong about debt.
My greatest gains of wealth and money has been the result of debt.
When I graduated from college, I watched my student loan balance loom over every financial decision I made. It felt like I'd borrowed from my future and now I was paying the price.
But here's what I learned after a decade of using debt strategically: Not all debt is created equal.
Some debt drains your wealth. Other debt builds it.
The difference isn't the debt itself; it's how you use it. Debt is a tool. And like any tool, it can be wielded effectively or abused recklessly. I don't demonize all debt. I categorize it. And once you understand the three productive types of debt, you can stop fearing it and start using it to accelerate your financial growth.
Let me show you exactly how.
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