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Comment by lotsofpulp | Hacker News Reader

The right balance is what let’s you sleep at night. But I have seen people more averse to debt limit their economic growth. If your goal is to get rich, you need to be comfortable with levering up, because your competition will be.

Also, some debt is politically more favorable than others. Debt to purchase land is more easily bailed out and less risky than buying options on margin.

It’s also easier if you have supportive friends/family/spouse with high income so that you can at least have the basics in the worst case scenario.

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> If your goal is to get rich, you need to be comfortable with levering up, because your competition will be

Or alternatively make something that doesn't have much competition. Here in Germany family business and artisanal work is still relatively widespread, and those businesses which have built particular expertise are very hard to outcompete, and many did so without significant debt, or sometimes debt at all. It just took them 30 years. They're private, often family owned, and don't have to answer to anyone, and they're not substantially threatened by globalisation (in fact they benefit from it) or competition because there is so much operational knowledge inside the company you just can't copy it.

If your goal is to get rich, you need to be comfortable with levering up

That really depends on the economic environment.

Pedantic.

If your goal is to get rich, you need to be comfortable with doing what it takes depending on the economic environment.

It’s not pedantry. There may be some circumstances where strategic use of debt contributes to making you rich, but leverage is not a necessary condition for building wealth. Stating that it is gives people the impression that debt instruments are the road to riches, when in fact they are often the exact opposite.

Debt to purchase productive and appreciating assets is the most common way to get rich that I have seen.

I don’t really know anyone who got rich (as in you don’t have to worry about working) with their labor. It’s buying something with 10% down that appreciates 2-3x+ and then taking those gains and investing it in something else that appreciates and so on and so forth that got the people I know rich.

For real estate in the US, you also get to take advantage of the 1031 tax exchange and basically build your wealth tax free.

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