Are you afraid of debt? The mindset of real wealthy people 💰💡

When you hear the word 'debt,' do you instinctively feel afraid?

Many people think debt = poverty, but those who truly understand financial management will wisely use 'good debt' to create wealth.


Today, let's talk about how to use debt to improve capital efficiency and make money work for you! 🚀

📌 1. Why is debt not scary?


🔹 (1) Debt decreases with inflation.

💡 Inflation decreases the purchasing power of money, which means your debt's actual value shrinks!


👉 You borrow 1 million USDT, with an annual interest rate of 5%, paying 50,000 USDT interest each year.

👉 But an inflation rate of 3% means that after 10 years, the actual purchasing power of 1 million USDT will only be about 740,000 USDT.

👉 This means you are using 'cheaper money in the future' to pay back 'money borrowed in the past'!

🔹 (2) Good debt vs. bad debt.

🔹 Good debt (used to make money)

✅ Home mortgage (property appreciation > loan interest rate)

✅ Business investment (profit > borrowing cost)

✅ Crypto DeFi lending arbitrage (examples to follow)


🔸 Bad debt (used for consumption)

❌ Installment credit card purchases for luxury goods

❌ Payday loans to travel

❌ Reckless leverage trading, resulting in liquidation


👉 The key is: your asset appreciation rate must be higher than the cost of debt!

📌 2. How can the crypto world amplify returns through debt?


🔹 (1) DeFi lending: Borrowing against assets to reinvest.


📌 Suppose you hold 10 ETH (30,000 USDT).

✅ Collateralize ETH on Aave / Compound to borrow 15,000 USDT.

✅ Use the borrowed funds to participate in liquidity mining / staking, generating additional returns.

✅ ETH price is rising, and you can get even greater returns!


👉 This is like real estate loan leverage but more flexible than traditional finance!


🔹 (2) Liquidity staking: Borrowing while holding assets.


📌 You hold ETH, but are you not earning anything by just HODLing?

✅ Convert to stETH (staked ETH) to earn 4-5% annualized returns.

✅ Use stETH as collateral to borrow USDT / DAI and invest in higher-yielding DeFi projects.


👉 This means you can amplify capital efficiency without selling ETH!



📌 3. How to safely use debt?


🔹 Don't over-leverage; ensure you won't be liquidated during market volatility.

🔹 Ensure returns > borrowing costs, otherwise you're just working for others.

🔹 Maintain liquidity; don't let your capital chain get stuck.



📌 Conclusion: Debt is not the problem; not knowing how to use it is the problem!


✅ The rich use debt to create wealth, while the poor fear debt and miss opportunities.

✅ The crypto world offers many financial tools that allow us to use assets more flexibly.

✅ But please remember, the premise of debt is that you know how to use it to achieve stable returns!


⚠️ If you don't know how to turn debt into a tool, it's better not to incur debt!