Why Debt Can Be Your Greatest Wealth-Building Tool

Garrett Gunderson
Debt, Your Greatest Wealth-Building Tool
Debt, Your Greatest Wealth-Building Tool
I’m a billionaire in debt, and I’m proud of it. While that statement might shock you, it reveals one of the most powerful wealth-building strategies I’ve used throughout my career. The conventional wisdom about debt being dangerous isn’t just oversimplified—it’s potentially keeping you from building significant wealth. Let me be clear: I pay minimal taxes because I borrow money strategically. This isn’t about avoiding my civic duty; it’s about understanding the rules of the financial game and using them to my advantage. The tax code rewards certain types of borrowing, and I’ve built my wealth by mastering this approach.

The Leverage Secret Most People Miss

My friend Dave Ramsey preaches living debt-free. While I respect Dave, I fundamentally disagree with his approach. When I say I’m a billion in debt, I’m not confessing a financial failure—I’m revealing a wealth strategy that has worked for decades.

This strategy isn’t about drowning in consumer debt. It’s about controlling billions in assets by using other people’s money. It’s called leverage, and it’s how the wealthy play a different game than everyone else.

Here’s how it works in practice:

The beauty of this system is that I’m not personally paying back the loan—the property is. The tenants are. Meanwhile, I get the cash flow, own the asset, and watch it appreciate over time.

Breaking Free from the Scarcity Mindset

Most people are stuck in what I call the “scarcity trap”—scrimping, saving, sacrificing, delaying, and deferring. They believe the only way to build wealth is to accumulate money slowly over decades. This mindset keeps them playing small.

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I play a different game altogether. My approach focuses on utilization, not just accumulation. It emphasizes control, not just ownership. This distinction is crucial for anyone seeking to accumulate substantial wealth.

When done correctly, strategic borrowing creates a win-win-win scenario:

This approach enables me to manage a significantly larger number of assets than I could if I relied solely on my own capital. It’s how I’ve been able to scale my wealth exponentially rather than incrementally.

The Tax Advantage Most People Never Use

The tax code is designed to incentivize certain behaviors, including specific types of borrowing. When I borrow against appreciating assets rather than selling them, I avoid triggering capital gains taxes. The loan proceeds aren’t considered income, so they aren’t taxed.

This strategy allows me to access the value of my assets without the tax consequences of selling them. It’s perfectly legal and available to anyone who understands how to use it.

The wealthy don’t just earn differently—they borrow differently. They use debt as a tool rather than viewing it as a burden. This perspective shift alone can transform your financial future.

Changing Your Relationship with Debt

I’m not suggesting everyone should immediately go into massive debt. Strategic borrowing requires knowledge, skill, and the right investor DNA. Not everyone is cut out for real estate investing or other leveraged investment strategies.

What I am suggesting is that you stop believing the lie that you need only your own money to get rich. The path to significant wealth rarely involves just saving your paycheck. It involves understanding how to use financial tools—including debt—to your advantage.

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The next time someone tells you all debt is bad, remember: the wealthy don’t avoid debt—they master it. They understand the difference between destructive debt, which drains your wealth, and strategic debt, which builds it.

Are you ready to stop playing by the rules designed to keep you financially average? The first step is changing how you think about debt. It’s not inherently good or bad—it’s a tool. And like any tool, its value depends entirely on how you use it.

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Garrett Gunderson is an entrepreneur who became a multimillionaire by the age of twenty-six. Garrett coaches elite business owners in the financial services industry. His book, Killing Sacred Cows, was a New York Times and Wall Street Journal bestseller.