Debt: for most people, it feels like a burden. A weight that holds them back. They work harder to pay it down, only to feel trapped in a never-ending cycle of repayments and interest.

But what if debt wasn’t the enemy? What if it could actually be the tool that sets you free?

For the average person, debt is used to buy things—cars, clothes, gadgets—that lose value and provide no financial benefit. This mindset leads to financial enslavement, where every dollar you earn is eaten up by repayments.

The wealthy, however, play a different game. They use debt as a tool to fund assets that generate cash flow and grow their wealth. This mindset shift allows the wealthy to create financial freedom, while the average person works harder just to stay afloat.

In this blog, we’ll explore Wealth Rules 3 and 8:

• Rule 3: The average person uses debt to buy things. The wealthy use debt to make money.

• Rule 8: The average person dreams of being debt-free. The wealthy dream of maximizing income-producing debt.

By the end, you’ll understand the critical differences in mindset—and how you can start using debt to create your own financial freedom.

How the Average Person Uses Debt

For the average person, debt is a necessary evil. It’s used to:

• Buy cars, which lose value the moment they leave the lot.

• Fund vacations, which provide memories but no financial return.

• Purchase clothes, gadgets, or other items that add no value to their future wealth.

The result? High-interest debt payments that consume a significant portion of their income.

Here’s what happens:

1. They take on debt to fund liabilities that lose value over time.

2. They work harder to pay down these debts, while interest drains their earnings.

3. When the debt is repaid, they’re left with nothing to show for it.

For many, the ultimate dream is to become “debt-free.” But this mindset focuses on avoiding debt rather than using it strategically. In the end, the average person works harder for money—while money (and opportunity) slips away.

How the Wealthy Use Debt to Build Financial Freedom

The wealthy view debt completely differently. To them, debt isn’t a burden—it’s a tool for building wealth.

The wealthy use low-interest, strategic debt to fund assets that generate cash flow and grow in value. These assets include:

• Real Estate: Rental properties provide passive income and appreciate over time.

• Businesses: Whether starting a business or investing in one, the wealthy use debt to create income streams that multiply their wealth.

• Insurance-Based Strategies:

  • Kaizen Plans and Premium Financing allow the wealthy to leverage borrowed funds to fund life insurance policies.

  • These policies build substantial cash value, grow tax-efficiently, and provide a financial safety net while generating wealth.

The wealthy ensure that the return on these investments is greater than the cost of borrowing, turning debt into a servant that works for them. Instead of avoiding debt, they “hire” it to work for them and grow their wealth.

The Critical Mindset Shift—From Enslavement to Empowerment

Think of debt like hiring a worker. Imagine you have a worker who goes out every month and makes you money. Sure, you have to pay them a salary (repayments and interest), but this worker builds you wealth while you sleep. Would you fire this worker to save a few dollars? Of course not. You’d want to hire as many of them as possible.

This is the mindset of the wealthy.

• They use strategic debt to “hire” workers (income-producing assets) that generate cash flow and build wealth.

• These workers work for them, not against them.

Now, think about the average person:

They also hire workers (debt), but these workers only do one task—like paying for a car, new clothes, or a vacation. Unlike the wealthy’s workers, these workers don’t generate any income or add value. Yet, the average person has to keep paying their salary (repayments + interest).

If you hire too many of these non-productive workers, you’ll end up broke.

• The Average Person: Becomes a slave to debt, paying for liabilities that lose value.

• The Wealthy: Use debt to “hire” assets that make them money, creating financial freedom.

The mindset shift is simple but powerful: Don’t fire the workers that make you money—hire more of them.

How You Can Use Debt Like the Wealthy

Ready to start thinking like the wealthy? Here’s how to use debt strategically and transform your financial future:

1. Evaluate Your Current Debt

   • Identify high-interest consumer debt (like credit cards) and work to eliminate it first.

   • Shift your focus toward using low-interest, strategic debt to fund income-producing opportunities.
     

2. Focus on Income-Producing Assets

   • Use debt to acquire assets that generate cash flow, such as:

     • Rental properties.

     • Dividend-paying stocks.

     • Businesses.
       

3. Leverage Insurance-Based Strategies

   • Explore tools like:

     • Kaizen Plans and Premium Financing: Use borrowed funds to fund life insurance policies that grow in cash value, generate tax-efficient wealth, and provide financial security.

     • These strategies allow you to safely amplify your wealth-building efforts while protecting your financial future.
       

4. Adopt the Wealthy Mindset

   • Stop dreaming of being “debt-free.” Start focusing on how you can use debt as a tool to fund assets that pay for themselves and build your wealth.
     

5. Work with Experts

   • Partner with financial advisors who specialize in strategic debt and wealth-building tools. They can help you identify the right opportunities and avoid unnecessary risks.

Conclusion

Debt can either be your greatest burden or your greatest tool—it all depends on how you use it.

The average person uses debt to buy liabilities that lose value, leaving them stuck in a cycle of repayments and financial stress. The wealthy use debt to acquire assets that generate income, grow in value, and build long-term financial freedom.

The mindset shift is clear: Stop working for debt and start making debt work for you.

When used strategically, debt becomes a “worker” that builds wealth while you sleep. Don’t fear it—hire it to fund your financial freedom.

Ready to learn how to use debt like the wealthy?
Download our Black Diamond Money Moves Report to discover proven strategies, including how tools like Kaizen and premium financing can help you turn debt into a powerful wealth-building engine.