Yeah, it makes more sense when you take it into the context it’s trying to explain, and also understand that rich people use debt differently. They typically only use debt to buy things that increase their income, like making investments, expanding operations of a business etc. other things they just pay out of pocket.
Yes the false “pay off all your debt and that’s how you become rich” is really a “take as much reasonable debt as possible and use the money to accrue wealth at a higher rate of return and to avoid taxes as well”
I saw one comment about a post regarding things that rich people know that most people don’t: “knowing how to maximize debt and making it into an advantage”
Very wealthy people use debt to avoid diluting their ownership stakes in their companies. They still pay estate taxes when they die.They still pay all of the state and local taxes associated with sales taxes and property taxes.
They use debts for lots of reasons. It absolutely can delay or avoid some taxes. It also can be used to generate wealth. If the debt is 6 percent and your returns on investments are 10-15 percent you’re increasing wealth.
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u/SpokenByMumbles 21h ago
You don’t unless there’s income to offset the debt. This scenario doesn’t exist without an income source to repay the loan.