Leverage Builds Wealth. Debt crushes it.

For most of my life, if I wanted something, I paid cash.

That's what we're taught.

• Avoid debt

• Pay cash whenever possible

• If you can't afford it, don't buy it

And honestly, that's good advice for many people.

It's saved countless families from financial stress and poor decisions.

But over time, I realized there's an important distinction that rarely gets discussed:

There's a difference between avoiding debt and understanding debt.

Not all debt serves the same purpose.

Some debt destroys wealth.

Other debt can help create it.

The challenge is knowing the difference.

Before we go any further, it's important to understand where my perspective comes from.

In 2009, I filed for Chapter 13 bankruptcy.

That wasn't a financial theory.

That was my reality.

I lost my home.

I lost my car.

I lost virtually everything.

And unlike Chapter 7 bankruptcy, Chapter 13 doesn't simply wipe the slate clean.

It's a repayment plan.

You spend years paying back what you owe while living under strict financial oversight.

It was one of the most difficult periods of my life.

So when I talk about debt, I'm not speaking from a place of privilege or theory.

I've experienced firsthand what happens when debt is used irresponsibly.

That's exactly why I believe understanding debt matters.

Because the debt that put me into bankruptcy and the debt I'm using today couldn't be more different.

Bad debt consumes.

Strategic debt produces.

That's the simplest way I can explain it

Bad debt often looks like:

• High-interest credit cards

• Consumer purchases without a plan

• Borrowing money for things that immediately lose value

Money goes out.

Nothing comes back.

Strategic debt operates differently.

Money is borrowed at a relatively low rate and deployed into something that has the potential to generate returns above the cost of borrowing.

The goal isn't consumption.

The goal is creating a spread.

And that's exactly what I attempted to do with my truck purchase.

When I bought my Rivian R1T, I had enough cash to write a check for the entire vehicle.

Instead, I chose a different route.

I financed part of the purchase at approximately 5% interest and invested the remaining capital into a separate brokerage account.

The mission of that account is simple:

Generate enough income to cover the truck payment.

Nothing more.

Nothing less.

This isn't my primary portfolio.

This isn't my retirement strategy.

This is a purpose-built account with a specific job.

Every dollar inside it has a clearly defined purpose.

The account currently holds three high-yield income ETFs:

• SEPY

• CHPY

• FEPY

These positions were selected because they generate substantial income through covered call strategies.

Again, this isn't how I structure my core portfolio.

In fact, I've been actively diversifying away from technology concentration elsewhere.

But this account has a different objective.

The goal isn't maximum diversification.

The goal is maximizing income generation.

As of this writing:

Account Value

Approximately $28,900

Unrealized Gains

Over $3,000

Total Gain

Approximately 13%

Projected Annual Income

$12,500+

Monthly Income

Roughly $1,050

Now let's compare that to the loan.

Monthly Payment

Approximately $672

Actual Monthly Payment

About $700 after additional principal payments

Interest Rate

5% APR

Remaining Balance

Approximately $31,000

Scheduled Payoff

October 2030

The math becomes very straightforward.

Monthly Income

$1,050

Monthly Payment

$700

Monthly Surplus

$350

That means the invested capital is generating enough cash flow to cover the payment and still leave excess income behind.

The truck gets paid.

The capital remains invested.

And the account continues working.

Everything comes down to one concept:

The Spread

My loan costs approximately:

5%

The investment account currently yields approximately:

44%

Even if distributions were cut in half:

Yield drops to 22%

That would still be more than four times the borrowing cost.

That's the engine powering the strategy.

As long as the return meaningfully exceeds the cost of debt, the math remains favorable.

Of course, nothing is guaranteed.

There are real risks:

• Distribution cuts

• Market volatility

• NAV erosion

• Economic downturns

I've experienced all of those before.

This isn't risk-free.

But it's risk with a purpose and a defined objective.

Whenever leverage gets discussed, people immediately assume danger.

Sometimes they're right.

Leverage can absolutely be destructive.

But context matters.

I could have paid cash for the truck.

That distinction is important.

The strategy didn't depend on borrowed money I didn't have.

I wasn't hoping an investment would save me.

I wasn't stretching beyond my means.

I simply chose to keep capital working instead of locking it into a depreciating asset.

That's very different from overextending yourself.

True leverage begins from a position of strength.

Not desperation.

Let's fast-forward a few years.

The monthly surplus can be used for:

• Additional principal payments

• Reinvesting into the portfolio

• Accelerating the payoff timeline

Eventually, the truck gets paid off.

But the investment account doesn't disappear.

The capital remains.

The income continues.

And now there's no payment attached to it.

At that point, the account can:

• Be rolled into my main portfolio

• Continue generating income

• Fund another purchase

• Compound further

The money does its job and keeps working afterward.

Wealthy People Use This Principle Every Day

The funny thing is that this concept isn't new.

It's simply how many wealthy individuals approach capital allocation.

Think about real estate.

Most investors don't buy rental properties with cash.

They:

• Put money down

• Finance the remainder

• Allow rental income to service the debt

• Keep the spread

Over time:

• Debt declines

• Equity grows

• Cash flow continues

It's the exact same framework.

Different asset.

Same principle.

Borrow at one rate.

Earn at a higher rate.

Keep the difference.

The Real Mindset Shift

For years, my financial goal was simple:

Never owe anyone anything.

After bankruptcy, that felt safe.

But eventually I realized something.

Avoiding all debt isn't necessarily financial freedom.

Sometimes it's simply another limitation.

The version of me who filed bankruptcy borrowed money to consume.

The version of me today borrows money to produce.

Same tool.

Different purpose.

Different outcome.

And that mindset shift changed everything.

This strategy won't be right for everyone.

In fact, for many people, paying cash is still the better option.

But I think it's worth questioning the beliefs we've inherited about money.

Because sometimes the biggest obstacle to building wealth isn't a lack of capital.

It's an outdated understanding of how capital can be used.

The Rivian isn't the story.

The mindset is.

The truck simply became the vehicle—literally and figuratively—for putting that philosophy into practice.

And so far, the math is doing exactly what I hoped it would do.