- The speaker explains how rich people use debt to their advantage. Contrary to popular belief, debt can be a useful tool if used correctly. For instance, borrowing money to start a business can be a good option for traditional businesses. One can get a mortgage by making a 20 percent down payment and use the remaining amount for renovation. After the renovation, the property's value increases, and one can refinance the mortgage to get tax deductions. This is a smart trick rich people use to accumulate wealth through real estate.
- They want to make money through debt. In the real estate industry, investors can renovate a property and increase its value, then get an 80% mortgage and use the profit to rent out the property and generate passive income while avoiding taxes. Hedge funds, on the other hand, use debt to make money when companies fall or go bankrupt. They borrow a single stock and sell it when the price drops, then buy it back when it is cheaper, earning a profit. Forex trading allows one to borrow an additional hundred dollars for every dollar traded, which can result in huge profits if one can predict which currencies will rise or fall. Lastly, having a good credit score is essential in obtaining favorable interest rates, which can save one a lot of money in the long run.
- In this section, it is explained that borrowing money to finance purchase orders is a common practice for businesses and not necessarily a bad thing. It is suggested that building a track record of being a reliable borrower will help to minimize the risks and get a lower interest rate. The banks have billions, if not trillions, of dollars waiting to be borrowed, and they can even create money out of thin air. The video ends with a call to action for viewers to subscribe to the channel to learn everything there is to know about money and investing in the stock market.
5 Ways Rich People Make Money With Debt. Real estate investing for beginners
