Why Debt Can Actually Make You Rich (Sorry, Dave Ramsey)

Here's a confession: I used to be a Dave Ramsey guy. Yep, my wife Emily and I cut coupons, stuffed cash into labeled envelopes each week, and religiously followed his debt snowball method.

And you know what? It worked. We eliminated our credit cards, paid off student loans, knocked out car payments, and even cleared my second mortgage within a couple of years. We were debt-free warriors living like no one else (as Dave would say).

But then we graduated. And that's the part Dave doesn't talk much about.

Because here's the uncomfortable truth: slavishly following the "all debt is bad" mantra can actually prevent you from building serious wealth.

Money Matters: The Debt Distinction

Let me be painfully clear: there's a massive difference between "bad debt" (high-interest credit cards) and "good debt" (strategic leverage that builds wealth).

When you're drowning in credit card statements, car payments, and student loans, Dave's system is a life raft. But at some point, you need to climb out of the life raft and board a yacht.

Let me explain with a real example from our own financial journey:

After we'd cleared our "bad debt," we faced a choice. We could follow Dave's system to the end and aggressively pay down our mortgage (effectively earning a 5% return on that money)... OR we could use those same dollars to invest in assets that would likely yield 10-15%.