12/08/2026
Why the rich borrow to build, while the poor borrow to consume.
Debt isn't good or bad. It's a tool, and the difference is what you're using it for.
The rich borrow to build:
They take a loan to buy a delivery van, stock a shop, or acquire assets that appreciate. The asset generates income, and that income repays the loan often with profit left over. The debt pays for itself.
The poor borrow to consume:
A loan for a phone, a wedding, or a holiday. Nothing is generated to repay it so the salary that would've built savings now services debt instead. The debt eats income.
So before borrowing ask yourself this question:
"Will the reason youre borrowing put money back in my pocket, or will it just take money out every month?"
If the answer is "it'll pay for itself" that's productive debt.
If the answer is "I'll just have to pay it back from my salary" that's consumption debt.
Not always avoidable, but know what you're signing up for.
A simple rule: Borrow for things that pay you back. Save for things that don't.
