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How To Use Debt Like The 1%

Understanding how the affluent utilize debt can transform your financial strategy. This article explores the methods employed by the wealthy to leverage debt for wealth creation, including asset-backed borrowing, business debt, and the associated tax advantages.

Aug 4, 2026|2 min read|Social Signal Playbook Editorial

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The Thesis

The wealthy use debt strategically to enhance their wealth, leveraging assets rather than liquidating them.

“You're not going to get rich without using debt.”
Codie Sanchez/How To Use Debt Like The 1%

Context & Analysis

The wealthy have long understood that debt is not merely a burden but a tool for wealth creation. " This article delves into the strategic use of debt among the affluent, focusing on how they borrow against assets rather than liquidating them. By leveraging securities-backed loans and business debt options like SBA loans, the rich can maintain their wealth while still accessing necessary capital.

Furthermore, this piece will explore the tax advantages that come with debt, which can significantly enhance the financial outcomes for borrowers. As wealth management expert Morgan Stanley notes, "The rich never sell their assets. " This insight underscores the core thesis: understanding and applying these strategies can fundamentally alter one's financial trajectory.

For more insights on financial strategies, see our article on Business Debt Strategies.

“The rich never sell their assets. They borrow against them and use those assets to make more money.”
Codie Sanchez/How To Use Debt Like The 1%

Why It Matters

The current economic climate necessitates a reevaluation of how individuals and businesses approach debt. With interest rates fluctuating and asset prices soaring, the wealthy are increasingly turning to debt as a means of leveraging their assets for further investment.

As noted in a recent Mackenzie study, the ability to borrow against securities has become a pivotal strategy for wealth preservation and growth. Additionally, the rise of platforms like Robinhood and SoFi has democratized access to financial tools that were once reserved for the affluent, allowing more individuals to engage in asset-backed borrowing.

This shift is critical; as the market evolves, understanding how to use debt strategically can provide a competitive edge. Moreover, the impending retirement of baby boomers is projected to flood the market with opportunities for acquisition, with predictions suggesting that by 2035, one million small businesses will be available for sale.

This presents a unique moment for savvy investors to leverage debt for strategic acquisitions. As the financial landscape shifts, the principles of using debt effectively remain timeless, making it essential for anyone looking to enhance their financial strategy to grasp these concepts.

“He actually just used his position as leverage instead of cashing out.”
Codie Sanchez/How To Use Debt Like The 1%

Playbook Moves

How to apply this strategically in the next 30 days.

  • 01Evaluate your current asset portfolio to identify potential for borrowing.
  • 02Research and apply for asset-backed loans that suit your investment strategy.
  • 03Consider the tax implications of any debt you take on.

Key Takeaways

  • Debt is a tool for wealth creation, not just a liability.
  • Borrowing against assets allows individuals to maintain ownership while accessing capital.
  • Tax advantages associated with debt can significantly enhance financial outcomes.
  • Utilizing business debt options like SBA loans can provide necessary funding for growth.
  • The 'borrow buy strategy' allows individuals to invest without liquidating assets.
  • Understanding risk management in borrowing is crucial for sustainable financial health.
  • The wealthy often leverage their assets to create additional income streams.
  • Market trends indicate a growing opportunity for debt-backed investments in the coming years.
  • Platforms like Robinhood are changing the way individuals access debt and investment opportunities.
  • Strategic debt management can lead to greater financial independence and security.
“They're not actually selling their golden goose ever. They are borrowing against it. And if the asset grows faster than the cost of debt, aka the interest rate here, then the math works.”
Codie Sanchez/How To Use Debt Like The 1%

Future Predictions & Calls to Action

  • Explore asset-backed borrowing options to leverage your investments.
  • Consider business debt strategies for funding growth opportunities.
  • Analyze your current debt situation to identify potential tax advantages.
  • Stay informed on market trends that could impact your borrowing strategy.

What Has Changed Since

Since the publication of this article, the financial landscape has experienced significant shifts, particularly in the realm of interest rates and asset valuations. The Federal Reserve's monetary policy has led to fluctuating interest rates, which directly impact the cost of borrowing. Additionally, the rise in asset prices, especially in equities and real estate, has made borrowing against these assets more attractive. The emergence of fintech platforms has also transformed how individuals access debt, allowing for greater flexibility and lower barriers to entry. This democratization of financial tools has enabled a broader audience to engage in strategies previously reserved for the wealthy, fundamentally altering the dynamics of debt utilization in personal finance.

Frequently Asked Questions

What are the benefits of borrowing against assets instead of selling them?
Borrowing against assets allows you to retain ownership while accessing capital. This strategy enables you to invest in additional opportunities without incurring capital gains taxes that would arise from selling your assets.
How can small businesses effectively use debt to grow?
Small businesses can utilize various forms of debt, such as SBA loans and seller financing, to secure necessary funding for expansion. By strategically managing this debt, businesses can leverage it to increase their operational capacity and market reach.
What tax advantages come with using debt?
Interest payments on certain types of debt, such as business loans, can often be deducted from taxable income. This reduces the overall tax burden, making debt a more attractive option for financing investments.
What is the 'borrow buy strategy'?
The 'borrow buy strategy' involves borrowing against existing assets to finance new investments. This allows individuals to grow their wealth without liquidating their current holdings, provided the asset appreciates faster than the cost of debt.
How has technology changed the way people access debt?
Fintech platforms like Robinhood and SoFi have made it easier for individuals to access credit and investment opportunities. These platforms offer streamlined processes and lower fees, enabling more people to engage in strategic debt utilization.
What should I consider before taking on debt?
Before taking on debt, assess your financial situation, including your income, expenses, and existing liabilities. It's also essential to understand the risks involved and ensure that the potential returns from borrowing outweigh the costs.

Works Cited & Evidence

1

How To Use Debt Like The 1%

primary source·Tier 3: Low-Authority Context·Codie Sanchez·Aug 4, 2026

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2

Transcript generated from source audio

primary source·Tier 3: Low-Authority Context·ytdlp

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Disclosure: This analysis was generated with AI assistance based on publicly available video content. All quotes are attributed to their original source with timestamps. Social Signal Playbook provides independent editorial analysis and is not affiliated with the individuals or organizations discussed.

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