3 reasons the rich use debt as a weapon (and you probably don't)
1. Leverage = control more with less
You have ₦100M. Buy one ₦100M property or control ₦400M in assets with ₦300M borrowed?
Rich pick option 2. Returns scale on ₦400M, not ₦100M.
But if that portfolio drops 20%, you're down ₦80M on your ₦100M equity. Leverage cuts both ways.
2. Borrow against assets, never sell
Need ₦100M liquidity? Don't sell your ₦500M property.
Borrow against it. Keep the asset, get the cash, create the debt.
Kiyosaki 101: never sell appreciating assets. Borrow against them.
Asset stays yours. Cash flows in. Debt is just a tool.
3. Inflation eats your debt, not your assets
Borrow ₦100M at fixed rate. Years pass, inflation crushes purchasing power.
Your debt? Still ₦100M nominal.
Your asset? ₦150M → ₦300M → ₦500M. Rents up. Debt worth less in real terms.
Fixed debt + productive assets = inflation works for you, not against you.
This is how wealth compounds while debt shrinks in real value.
1. Leverage = control more with less
You have ₦100M. Buy one ₦100M property or control ₦400M in assets with ₦300M borrowed?
Rich pick option 2. Returns scale on ₦400M, not ₦100M.
But if that portfolio drops 20%, you're down ₦80M on your ₦100M equity. Leverage cuts both ways.
2. Borrow against assets, never sell
Need ₦100M liquidity? Don't sell your ₦500M property.
Borrow against it. Keep the asset, get the cash, create the debt.
Kiyosaki 101: never sell appreciating assets. Borrow against them.
Asset stays yours. Cash flows in. Debt is just a tool.
3. Inflation eats your debt, not your assets
Borrow ₦100M at fixed rate. Years pass, inflation crushes purchasing power.
Your debt? Still ₦100M nominal.
Your asset? ₦150M → ₦300M → ₦500M. Rents up. Debt worth less in real terms.
Fixed debt + productive assets = inflation works for you, not against you.
This is how wealth compounds while debt shrinks in real value.