How To Use Good Debt To Build Wealth

About this Video

• Video Title: How To Use Good Debt To Build Wealth
• Channel: Loral Langemeier
• Speakers: Loral Langemeier
• Duration: 00:11:45

Introduction

This video challenges the conventional wisdom of avoiding all debt. Loral Langemeier argues that strategically using "good debt" (low-interest debt used for high-yield investments) can accelerate wealth building. The video covers distinguishing between good and bad debt, how to manage credit cards responsibly, and common mistakes people make.

Key Takeaways

• Bad debt stems from outspending income: High-interest debt, especially credit card debt with high APRs, becomes problematic when income doesn't cover repayments.
• The key to managing debt is learning to make money: The speaker emphasizes generating sufficient income to cover expenses and debt repayments. High income allows for utilizing debt without high-interest burdens.
• Good debt is a tool for wealth building: Low-interest loans can be used to invest in assets that generate a higher return than the interest paid, creating wealth.
• Strategic credit card use: Using credit cards responsibly and paying them off in full each month avoids interest charges and builds credit history.
• Avoid debit card overuse: Debit cards directly deduct from bank accounts, leaving you vulnerable to financial loss from fraud or errors. Credit cards provide a buffer and consumer protection.