Is all debt bad? You hear that message everywhere, often from wealthy voices on television telling struggling families not to buy a home. I promise you most of those same people own homes, and there is good debt on them. This episode is my attempt to set the record straight, and I should have recorded it a long time ago.

Debt is a form of capital, just like equity. The difference is that one has to be paid back. For generations, Black families leaned on debt because the doors to equity were closed. Land promised after the Civil War was taken back, and federal redlining kept home loans out of Black neighborhoods for decades. I also go all the way back to Mesopotamia, where temples acted as the first banks, to ancient Athens, where Solon abolished debt slavery, and to Alexander Hamilton, who made the case that a well-managed national debt could strengthen a young country. Borrowing is as old as civilization.

Then we get practical. Good debt is tied to something that may appreciate: a home, a business, an education that raises what you can earn. Bad debt is tied to something that will lose value. Financing jewelry is bad debt. I don’t care how much it blings, it doesn’t sing when you get to the bank. And there is a third kind I call stupid debt, the kind where you only ask about the monthly payment and never ask about the interest rate.

My simplest rule is to borrow only when it can make you money. Know your credit score, watch it like your paycheck, and get a coach in your corner. Use debt wisely and it will work for you. Abuse it and it will own you.

🎧 Listen now — wherever you get your podcasts, or simply click below.

Prefer to watch? The full episode is on YouTube.