{"id":5057,"date":"2026-03-01T02:10:09","date_gmt":"2026-03-01T02:10:09","guid":{"rendered":"https:\/\/ecodriveautosales.com\/us\/?p=5057"},"modified":"2026-03-01T02:10:09","modified_gmt":"2026-03-01T02:10:09","slug":"why-rich-americans-borrow-money","status":"publish","type":"post","link":"https:\/\/ecodriveautosales.com\/us\/why-rich-americans-borrow-money\/","title":{"rendered":"Why Rich Americans Borrow Money (Good Debt, Assets &#038; LTV)"},"content":{"rendered":"<p><!-- ===== Helper CSS (font & highlight only) ===== --><\/p>\n<style>\nbody{\n  font-family:system-ui,-apple-system,\"Segoe UI\",Roboto,Helvetica,Arial,sans-serif;\n  line-height:1.55;color:#111;\n}\n.styled_h2 {\n  font-size: 1.8em;\n  font-weight: bold;\n  margin: 1.5em 0 1em 0;\n  color: #333;\n}\n.styled_h3 {\n  font-size: 1.4em;\n  font-weight: bold;\n  margin: 1.3em 0 0.8em 0;\n  color: #444;\n}\n.q_underline1 {\n  background: #ffeb3b;\n  padding: 0 4px;\n  border-bottom: 3px solid #ffe900;\n}\n.q_underline2 {\n  background: #99f9ff;\n  padding: 0 4px;\n  border-bottom: 3px solid #99f9ff;\n}\n.q_underline3 {\n  background: #ffcccb;\n  padding: 0 4px;\n  border-bottom: 3px solid #ff99b8;\n}\n.video-container-long {\n  position: relative;\n  width: 100%;\n  max-width: 560px;\n  margin: 0 auto;\n  aspect-ratio: 16 \/ 9;\n}\n.video-container-long iframe {\n  position: absolute;\n  top: 0;\n  left: 0;\n  width: 100%;\n  height: 100%;\n}\n@media (max-width: 768px) {\n  .video-container-long {\n    max-width: 100%;\n    margin: 0;\n  }\n}\n.center{text-align:center;}\n<\/style>\n<h2 class=\"styled_h2\">Why Do Wealthy Americans Actively Take on Debt?<\/h2>\n<p>Hi, I&#8217;m Suzuki from Eco Drive.<\/p>\n<p>Today, let&#8217;s explore the topic of &#8220;Why do wealthy Americans actively take on debt?&#8221;<\/p>\n<p><span class=\"q_underline2\">Many people might wonder, &#8220;If they&#8217;re rich, they should have plenty of cash. Why would they need debt?&#8221;<\/span><\/p>\n<p><strong>Actually, there&#8217;s a big misconception here.<\/strong><\/p>\n<p>The idea that being wealthy equals having lots of cash isn&#8217;t necessarily true.<\/p>\n<p>In fact, it&#8217;s more often the case that wealthy people don&#8217;t hold much cash at all.<\/p>\n<p class=\"center\"><strong>Watch the video version here!<\/strong><\/p>\n<p><center><\/p>\n<div class=\"video-container-long\">\n    <iframe src=\"https:\/\/www.youtube.com\/embed\/cQSkPE61ALI?autoplay=0&amp;mute=1\" title=\"Why Wealthy Americans Aren't Afraid of Debt\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div>\n<p><\/center><\/p>\n<h3 class=\"styled_h3\">Looking at the Wealthy People Around Me&#8230;<\/h3>\n<p><strong>I have some wealthy people around me too, but surprisingly, they don&#8217;t hold much cash.<\/strong><\/p>\n<p>Instead, what they have are &#8220;assets.&#8221;<\/p>\n<p><strong><span class=\"q_underline1\">Wealthy Americans focus on owning assets rather than holding cash.<\/span><\/strong><\/p>\n<p>This is an extremely important point.<\/p>\n<p>The board game Monopoly might help you understand this concept.<\/p>\n<h3 class=\"styled_h3\">Learning the Wealthy Mindset from Monopoly<\/h3>\n<p><center><br \/>\n<iframe loading=\"lazy\" title=\"Lessons from Monopoly: Why Wealthy People Borrow\" src=\"https:\/\/www.youtube.com\/embed\/uEuhNhW3fgo\" width=\"282\" height=\"500\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><br \/>\n<\/iframe><\/center><\/p>\n<p><strong>Monopoly is a classic American game where the person who becomes the richest wins.<\/strong><\/p>\n<p>In this game, you can&#8217;t win just by collecting your salary and saving money.<\/p>\n<p><span class=\"q_underline1\">To win, you need to quickly acquire assets, leverage them, sell them, and gain more wealth.<\/span><\/p>\n<p><span class=\"q_underline2\">If you don&#8217;t buy assets, when you roll the dice and land on someone else&#8217;s property, you&#8217;ll end up paying hefty rent to them.<\/span><\/p>\n<p>That&#8217;s why the key strategy is to acquire assets before anyone else, collect rent from others, and ultimately cash out to win.<\/p>\n<h3 class=\"styled_h3\">The Key Is Converting Cash into Assets<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-18396 size-full\" src=\"https:\/\/www.ecodriveondemand.com\/wp-content\/uploads\/\u30a2\u30a4\u30ad\u30e3\u30c3\u30c18-5.png\" alt=\"Learning the Wealthy Mindset from Monopoly\" width=\"700\" height=\"440\" \/><\/p>\n<p><strong><span class=\"q_underline1\">The essence of this game is converting your salary (cash) into assets.<\/span><\/strong><\/p>\n<p>By having those assets &#8220;work for you,&#8221; you earn regular income and acquire even more assets.<\/p>\n<p><strong>This is exactly what wealthy Americans practice in real life.<\/strong><\/p>\n<p>What wealthy Americans understand is that &#8220;the sooner you acquire assets, the better.&#8221;<\/p>\n<p>If you wait, you&#8217;ll naturally end up buying after prices have risen, so it&#8217;s more advantageous to buy at an earlier stage.<\/p>\n<p>In other words, instead of diligently saving your salary for 10 years before buying, wealthy Americans think about buying quickly\u2014even if it means taking on debt.<\/p>\n<p>That&#8217;s why &#8220;wealthy Americans take on debt.&#8221;<\/p>\n<h3 class=\"styled_h3\">Explaining the Types of Debt<\/h3>\n<p>Next, let&#8217;s talk about debt.<\/p>\n<p><strong>There are actually two types of debt: good debt and bad debt.<\/strong><\/p>\n<p>This isn&#8217;t about whether the interest rate is high or low\u2014it&#8217;s about how the money is used.<\/p>\n<p>Good debt is debt used for investment, while bad debt is debt used for consumption or wasteful spending.<\/p>\n<p><strong><span class=\"q_underline1\">The bottom line is that wealthy people are proactive about taking on good debt.<\/span><\/strong><\/p>\n<p>When I mentioned investment, consumption, and wasteful spending\u2014investment refers to things like stock investments, real estate investments, or ways to grow your money.<\/p>\n<p>Consumption refers to things you need to survive, like electricity, gas, and water\u2014essentials you have to spend on.<\/p>\n<p>Wasteful spending refers to things like buying unnecessary clothes or hobby items\u2014things that aren&#8217;t essential for daily life.<\/p>\n<h3 class=\"styled_h3\">Saving Is Also a Form of Investment<\/h3>\n<p><strong>Another way to use money is saving, but this is actually a form of investment too.<\/strong><\/p>\n<p>For example, depositing money in an American bank means you&#8217;re investing in US dollars.<\/p>\n<p>Saving in yen at a Japanese bank is an act of investing in Japanese yen.<\/p>\n<p>So fundamentally, the ways to use money are categorized into investment and consumption\/wasteful spending.<\/p>\n<p>With this in mind, let me explain in more detail why wealthy Americans take on debt.<\/p>\n<h3 class=\"styled_h3\">Wealthy Americans Are Proactive About Good Debt<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-18398\" src=\"https:\/\/www.ecodriveondemand.com\/wp-content\/uploads\/\u30a2\u30a4\u30ad\u30e3\u30c3\u30c13-15.png\" alt=\"Wealthy Americans Are Proactive About Good Debt\" width=\"700\" height=\"440\" \/><\/p>\n<p><strong>Wealthy Americans are proactive about good debt\u2014meaning if they borrow money and use it for investments, the borrowed money grows, so they actively pursue it.<\/strong><\/p>\n<p><span class=\"q_underline2\">However, if the money is used for consumption or wasteful spending, it won&#8217;t grow.<\/span><\/p>\n<p><strong><span class=\"q_underline2\">In fact, since debt always comes with interest, it keeps growing.<\/span><\/strong><\/p>\n<p>As a result, no matter how much you pay back, you end up just paying interest, and your assets don&#8217;t grow\u2014they actually shrink.<\/p>\n<p><span class=\"q_underline3\">In other words, the more you borrow for consumption or wasteful spending, the poorer you become.<\/span><\/p>\n<p>On the other hand, the more wealthy people borrow for investments, the more their money\u2014and assets\u2014grow.<\/p>\n<p>In this way, the same act of &#8220;borrowing&#8221; produces completely different results depending on how the money is used.<\/p>\n<p>The reason wealthy Americans actively take on debt is that they understand the mechanics of this &#8220;good debt&#8221; and leverage it effectively.<\/p>\n<p class=\"center\">\u3010Watch the second half video here\u3011<\/p>\n<p><center><\/p>\n<div class=\"video-container-long\">\n    <iframe src=\"https:\/\/www.youtube.com\/embed\/wlJ5Z1wJ-YQ?autoplay=0&amp;mute=1\" title=\"How Debt Works in America: Buy Assets and Borrow Again\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div>\n<p><\/center><\/p>\n<h3 class=\"styled_h3\">What Do They Do When They Need Cash?<\/h3>\n<p>So far, I&#8217;ve explained that wealthy people think about growing their assets even if it means taking on debt.<\/p>\n<p><strong>So you might wonder, what do they do when they actually need cash?<\/strong><\/p>\n<p><strong><span class=\"q_underline1\">The thing is, people who own assets have creditworthiness.<\/span><\/strong><\/p>\n<p>Because of this, they can borrow money.<\/p>\n<p>When you suddenly need cash, if your available cash isn&#8217;t enough, you can use your assets as collateral and borrow from banks based on that credit.<\/p>\n<h3 class=\"styled_h3\">Using Loan-to-Value for Manageable Debt<\/h3>\n<p><center><br \/>\n<iframe loading=\"lazy\" title=\"What Wealthy People Check Before Taking on Debt\" src=\"https:\/\/www.youtube.com\/embed\/jXo-K_UcYrE\" width=\"282\" height=\"500\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><br \/>\n<\/iframe><\/center><\/p>\n<p><strong>Digging a little deeper, wealthy people don&#8217;t take on reckless debt.<\/strong><\/p>\n<p>They always use an indicator called &#8220;Loan-to-Value&#8221; and structure their loans to stay at around 80% or less of their asset value.<\/p>\n<p><span class=\"q_underline1\">In other words, if you stay within that range, there&#8217;s no risk when it&#8217;s time to sell.<\/span><\/p>\n<p>Wealthy people always know exactly what their assets are worth.<\/p>\n<p>This is where America really shines\u2014the systems for calculating your asset value are very well developed, so you can check your net worth at any time.<\/p>\n<p>For example, there are systems that calculate the current market value of real estate you own, and anyone can access this information.<\/p>\n<h3 class=\"styled_h3\">What Is Loan-to-Value?<\/h3>\n<p><strong>Let me explain the indicator called &#8220;Loan-to-Value&#8221; (LTV) in more detail.<\/strong><\/p>\n<p>LTV shows how much of a loan you have relative to your asset value.<\/p>\n<p>It&#8217;s generally expressed as a percentage.<\/p>\n<p>For example, if your real estate is worth $1 million and your remaining loan balance is $500,000, your LTV is 50%.<\/p>\n<p>Similarly, if you have $1 million in assets and your loan is $800,000, your LTV is 80%.<\/p>\n<p>Generally, banks will relatively easily approve loans up to 80% of your asset value.<\/p>\n<h3 class=\"styled_h3\">A Real Example of Taking on Debt<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-18400\" src=\"https:\/\/www.ecodriveondemand.com\/wp-content\/uploads\/\u30a2\u30a4\u30ad\u30e3\u30c3\u30c11-2.png\" alt=\"A Real Example of Taking on Debt\" width=\"700\" height=\"440\" \/><\/p>\n<p><strong>Let me give you a concrete example.<\/strong><\/p>\n<p>Let&#8217;s say you own $1 million worth of real estate and your current loan balance is $500,000.<\/p>\n<p><span class=\"q_underline1\">In this case, you have $300,000 in borrowing capacity.<\/span><\/p>\n<p>This $300,000 (the gap until LTV reaches 80%) can be borrowed relatively easily.<\/p>\n<p>Many wealthy individuals use this mechanism to make new investments.<\/p>\n<p>For example, when a good property comes along, they borrow this $300,000 for a down payment and purchase the next property.<\/p>\n<p>This is how many American investors grow their wealth efficiently\u2014by constantly being aware of the balance between asset value and loan amounts.<\/p>\n<h3 class=\"styled_h3\">They Don&#8217;t Take on Reckless Debt<\/h3>\n<p><strong>Wealthy Americans\u2014people with significant assets\u2014do take on debt, but they don&#8217;t take on reckless debt.<\/strong><\/p>\n<p>They always keep their debt at a level where there&#8217;s no risk when selling their assets.<\/p>\n<p>They also constantly track their asset values, loan balances, and Loan-to-Value (LTV) ratios.<\/p>\n<p>To summarize today&#8217;s discussion, here&#8217;s why wealthy Americans actively take on debt: They believe holding cash is actually a loss. They borrow to purchase assets as quickly as possible to grow their wealth. They let those assets work for them to generate even more wealth. They don&#8217;t take on reckless debt and carefully manage their LTV.<\/p>\n<h3 class=\"styled_h3\">Using Debt Wisely to Grow Assets<\/h3>\n<p><span class=\"q_underline2\">However, this doesn&#8217;t mean everyone should necessarily take on debt.<\/span><\/p>\n<p>Borrowing to acquire more assets is one option.<\/p>\n<p><strong>The important thing is that if you do borrow, you should always use it for investment\u2014not for consumption or wasteful spending.<\/strong><\/p>\n<p><span class=\"q_underline1\">Additionally, I recommend avoiding reckless debt and keeping your borrowing below 80% of your assets&#8217; market value.<\/span><\/p>\n<p>Please keep these points in mind.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why Do Wealthy Americans Actively Take on Debt? Hi, I&#8217;m Suzuki from Eco Drive. Today, let&#8217;s explore the topic of &#8220;Why do wealthy Americans actively take on debt?&#8221; Many people might wonder, &#8220;If they&#8217;re rich, they should have plenty of cash. Why would they need debt?&#8221; Actually, there&#8217;s a big misconception here. The idea that [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5069,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-5057","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-entrepreneurship"],"_links":{"self":[{"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/posts\/5057","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/comments?post=5057"}],"version-history":[{"count":4,"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/posts\/5057\/revisions"}],"predecessor-version":[{"id":5067,"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/posts\/5057\/revisions\/5067"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/media\/5069"}],"wp:attachment":[{"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/media?parent=5057"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/categories?post=5057"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecodriveautosales.com\/us\/wp-json\/wp\/v2\/tags?post=5057"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}