Learn How to Use Debt for Real Estate Investing

Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business

The Rich Dad Company

Entrepreneurship, Business, Investing

4.1 • 3.9K Ratings

🗓️ 19 September 2024

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode, Jaren explains the powerful but often misunderstood topic—how to use debt strategically to grow your wealth. While many view debt as a liability, when used correctly, it can be a game-changing tool for growing your wealth, especially in real estate. If you're serious about building wealth, this episode is for you.
The Power of Debt
Debt doesn’t have to be a burden. In fact, taking on debt, like a mortgage for real estate, can yield returns that far surpass the cost of the loan over time. This strategy allows you to build equity, generate cash flow, and watch your property appreciate in value. Mastering the use of debt can unlock incredible financial growth.

The Six Pillars of Real Estate Investment

Leverage: Use borrowed funds to invest in properties and amplify your returns with minimal upfront capital.
Cash Flow: Rental properties provide consistent income, helping cover expenses and leaving you with positive cash flow.
Appreciation: Real estate typically appreciates over time, boosting your net worth.
Tax Benefits: Take advantage of tax deductions on mortgage interest, property taxes, and depreciation.
Equity Build-Up* Paying down your mortgage increases your property’s equity, a key component of your wealth.
Hedge Against Inflation: Real estate is a strong hedge against inflation as property values and rental incomes rise over time.

0:00 - Introduction: Harnessing the power of debt
3:15 - The six pillars of real estate investment
8:30 - Using leverage and maximizing cash flow
12:45 - Tax benefits and equity build-up
16:00 - Real estate as an inflation hedge
20:00 - Conclusion: Embrace debt as a wealth-building tool

Transcript

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0:00.0	Today we're talking about how you can use debt to grow your wealth.
0:05.0	So I want to break down the power of debt, plus the other six pillars of real estate.
0:10.0	Welcome back to the Rich Dad Radio Show where we teach you the good news and the bad news about
0:16.2	money.
0:17.2	I'm your host, Jaren Sustar, and today I want to talk to you about how debt can make you rich.
0:23.9	I don't know what you guys think of when you hear the word debt,
0:26.7	but for me I think my initial thought tends to be taboo.
0:30.2	Like debt is bad.
0:31.6	We've associated with debt and bad, but that may not always be the case.
0:36.3	And when I think about where does that association come from, where do we automatically
0:40.0	hear the word debt and think bad, I think it goes back to the middle class.
0:44.2	We a lot of us grow up middle class myself including and what does the middle class
0:49.0	preach? Save your money and stay out of debt. Save your money, stay out of debt.
0:53.6	Well, they tend to do neither.
0:56.1	They don't save any money.
0:57.4	They definitely don't invest.
0:59.3	And they just go and continue to get into debt.
1:02.3	A lot of times, when they're getting into debt,
1:03.9	tell me if you guys know anybody like this,
1:05.9	it's an impulse buys.
1:07.7	I deserve X.
1:10.1	I've been working so long at my age,
	...

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