The Golden Rules of Becoming a Millionaire

2. Avoid debt like the plague

debt-free
Gustavo Frazao / Shutterstock.com

Most people treat debt as if it’s a normal part of life. They divide it into categories like “good debt” and “bad debt.” They discuss it endlessly, as if it’s some mathematical mystery.

Debt is not complicated. Paying money to temporarily use other people’s money makes you poorer. Charging money to temporarily let other people use yours makes you richer.

Since paying interest makes you poorer, you only do it in two situations:

  • When you have to in order to survive
  • When you’ll earn more on what you’re financing than what you’ll pay to finance it

Unless borrowing is ultimately going to make you richer, don’t do it.

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