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Citizen Wealth by Wade Rathke

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105

8The Debt Trap

Can we really build wealth by using debt? Debt is hardly the same as savings or securities. Debt is something we have to pay someone else and, usually, very dearly. I could have a lively debate with you that debt reduces wealth, especially in the short run, rather than something that helps create wealth.

But we have also agreed that mortgages, which are obviously a form of debt, can help families build equity in their homes that can be converted to cash at some point or be used as collateral, thereby creating real citizen wealth. We have also realized that mortgage debt only becomes real ownership and wealth once the debt has been repaid, or the value of the property has risen higher than the balance remaining on the mortgage. ...

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