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 debt, arguing that strategic use of "good debt" can accelerate wealth building. The speaker, Loral Langemeier, explains the difference between good and bad debt, how to manage credit, and common mistakes people make with their finances. She emphasizes the importance of learning to make money as a foundation for financial success.

Key Takeaways

• Good debt vs. bad debt: The video differentiates between "good debt" (low-interest loans used for high-yield investments) and "bad debt" (high-interest debt, often from credit cards, exceeding one's ability to repay).
• Importance of income: The core principle is that the key to managing debt is increasing income to a level that comfortably covers expenses and debt repayments.
• Credit card strategies: Using credit cards strategically (paying them off in full monthly, aiming for 0% interest) can be beneficial, whereas relying on debit cards directly reduces financial flexibility and protection against fraud.
• Debt payoff strategy: A debt payoff method is suggested, focusing on paying off one card fully each month, to improve credit score while maintaining financial activity.
• Leveraging good debt for investment: The video advocates using low-interest debt to invest in high-yield ventures (e.g., real estate, business), allowing the investment returns to far exceed the cost of borrowing.