We’ve all heard the lecture: “Don’t go into debt. Cut up your credit cards. Save every penny.” For generations, this has been passed down like gospel—especially in working-class communities. But there’s a quiet financial truth that rarely gets talked about:
The wealthy use debt to build empires. Everyone else is told to fear it.
Sound familiar? It should. Because this is how the system was designed—not to keep everyone out of debt, but to keep the benefits of debt exclusive.
1. The Myth of “Bad Debt”
If you’re poor and you borrow, it’s seen as irresponsible. If you’re rich and you borrow, it’s considered strategic.
Banks hand out low-interest lines of credit to business owners and real estate investors all the time. They encourage the use of “leverage” to scale portfolios, open locations, buy properties, and expand.
Meanwhile, people working hourly jobs are told to avoid debt entirely—even when they need it to cover emergencies, invest in education, or escape a cycle of poverty. And when they do borrow, it’s often through high-interest credit cards or payday loans—products specifically designed to trap them.
Access to debt isn’t equal. Neither is the outcome.
2. Real Estate: How the Rich Play Monopoly
One of the most powerful wealth-building tools is real estate leverage. Wealthy investors use a tactic called buy, rehab, refinance, repeat (BRRRR)—which involves buying a property, fixing it up, pulling out the increased equity, and using that money to buy the next one.
They’re not using their savings. They’re using debt.
They often borrow against appreciated property through HELOCs or cash-out refinances—debt that’s tax-free, low-interest, and reinvested for more profit.
Working-class people? They’re often stuck renting from those very investors, paying rising rents without building any equity.
3. Student Loans: When Debt Becomes a Trap, Not a Tool
Let’s be real—not all debt builds wealth.
Student loan debt has ballooned into a $1.7 trillion crisis, and working-class students bear the brunt. A 2023 Brookings report found that Black borrowers are more likely to owe more than they borrowed even 12 years after entering repayment.
This isn’t wealth-building—it’s generational sabotage.
Yet while poor students go into debt for degrees, wealthy families take out strategic business loans, use tax-advantaged education accounts, or bypass the system entirely.
4. How the Tax Code Loves Debt—If You’re Rich
One of the best-kept secrets in American finance is this: the tax code rewards you for being in debt—if you’re wealthy.
Landlords deduct mortgage interest. Businesses deduct loan expenses. Investors borrow against stocks to avoid selling them—and therefore avoid capital gains taxes. It’s called the Buy, Borrow, Die strategy, and it’s legal tax avoidance baked into our system.
Meanwhile, poor and middle-class families get taxed on every dollar they earn and pay interest on debt they can’t deduct.
It’s not just about wealth. It’s about who the system is designed to help stay wealthy.
5. Debt and Shame: The Psychological Divide
In wealthy circles, debt is discussed in boardrooms—with spreadsheets and strategy sessions.
In working-class communities, debt is whispered about—linked to shame, failure, or desperation.
That’s not by accident. It’s by design.
Financial literacy programs often frame success as avoiding debt, while leaving out how those at the top use debt to create passive income, generate tax shelters, and build generational wealth. The same tools are demonized for the poor—and glorified for the elite.
6. Flipping the Script
Debt is not inherently good or bad. It’s a tool. But it’s only empowering when paired with access, knowledge, and opportunity.
So what can we do?
- Support credit unions and CDFIs (community development financial institutions) that offer ethical lending to underserved communities.
- Push for student debt cancellation and housing policies that redistribute access to equity—not just loans.
- Educate our communities on how wealth is actually built—not just saved.
- Demand tax code reform that closes the loopholes used to hoard wealth through debt.
We don’t need to teach poor people to fear debt.
We need to teach the truth about how the game is played—and who gets to win.
Because as long as the wealthy are allowed to borrow their way to the top while everyone else is shamed for trying, we’ll never close the wealth gap. It’s time we stop playing by the rules of a rigged system—and start rewriting them.
