You’ve probably heard the debates. Dave Ramsey is telling you to cut up your credit cards. Grant Cardone is borrowing billions. And Robert Kiyosaki is bragging about $1.2 billion in debt. So who’s right?
Here’s the truth: they all are, but they’re talking to different people, at different stages of the financial journey, about completely different uses of money. Once you understand that, the whole debate stops being confusing and starts being incredibly useful.
Let’s break it all down.
Join Infinity Investing’s Newsletter
The Most Important Distinction Nobody Talks About
Before we can fairly compare these three financial philosophies, we need to get one thing crystal clear: a distinction most people completely miss.
Debt and leverage are not the same thing.
DEBT is a loan taken against a liability, something that takes money out of your pocket every month. Credit cards, car loans, a personal mortgage. None of these generate income. You are working to pay them back.
LEVERAGE is a loan taken against an asset, something that puts money into your pocket every month. The asset services the loan. You’re not working for the debt. The debt is working for you.
That one distinction is the key that unlocks the entire conversation. Once you see it, you’ll never look at borrowing money the same way again.
💡 INFINITY INVESTING PRINCIPLE: An asset puts money into your account every month. A liability takes money out. That’s how you know the difference, every single time.
Dave Ramsey: The Right Advice for the Right Person
BEST FOR: ELIMINATING CONSUMER DEBT
Dave’s message is intense, and intentionally so. He’s talking to people who are drowning in consumer debt. His prescription? Scorched earth. Sell everything. Attack your debt with relentless intensity. People who follow that approach get out of consumer debt in an average of 18 to 24 months.
Here’s what Dave gets absolutely right: most Americans are using debt on liabilities. They’re borrowing to fund a lifestyle: vacations, restaurants, cars, homes they can’t truly afford. None of those things generate income to cover the loan. The borrower is doing all the work.
Dave draws on a concept as old as language itself: the idea that the borrower is slave to the lender. It’s not an accident that one of the biggest credit card companies put the word “Master” right in its name.
So if you’re knee-deep in consumer debt right now, Dave Ramsey is exactly who you need to be listening to. His advice isn’t wrong. It’s written for a specific chapter of your financial story. But that chapter isn’t the whole book.
Grant Cardone: Leverage to Build an Empire
BEST FOR: SCALING INCOME-PRODUCING ASSETS
Grant Cardone has built a real estate portfolio valued in the billions, and he did it using debt. Massive amounts of it. But what Grant is really talking about is leverage on income-producing assets, where the tenants pay off the loan, not him.
When Grant borrows to buy a commercial apartment complex, the rental income is designed to cover the mortgage payments, operating costs, insurance, and management fees, and still put money back in his pocket. The tenants are paying off the loan. He’s not. That’s leverage.
Consider this: when you buy stocks, you come out of pocket for the full purchase price. But when you buy cash-flowing real estate, you put down 20–30% and finance the rest. A relatively small amount of capital controls a much larger asset. And if that asset appreciates while generating income, you’ve multiplied your wealth in a way that’s very difficult to replicate through traditional saving alone.
⚡ THE CORE PRINCIPLE: Leverage is fire. If you know how to wield it, you can build something extraordinary. If you don’t, you’re going to get burned. The tool itself isn’t dangerous. It’s the hands it’s in.
Robert Kiyosaki: $1.2 Billion in Debt, and Why That’s Not Crazy
BEST FOR: LONG-TERM WEALTH COMPOUNDING
When asked about his debt load, Kiyosaki famously replied: “1.2 billion.” To most people, that number sounds terrifying. But once you understand the debt-vs-leverage distinction, it starts to look very different.
Kiyosaki’s philosophy (made famous in Rich Dad Poor Dad) revolves around using other people’s money (borrowed capital) to acquire income-generating assets. Buy the asset, let rental income service the debt, benefit from appreciation, borrow against the equity tax-free, and acquire more assets. It’s a compounding cycle.
Kiyosaki isn’t using leverage to fund a lifestyle. He’s using it to build an empire. The assets do the heavy lifting.
He also reinforces a critical mindset shift: your primary home is not an asset. It’s a liability. Unless your home is generating rental income that exceeds what it costs to own it, it’s a liability, no matter how much equity you’ve built.
The Losing Loop: When Leverage Becomes Dangerous
There’s a version of the leverage strategy that looks similar to what Cardone and Kiyosaki do, but it ends in financial ruin. We call it the losing loop.
Here’s what it looks like: you take out a HELOC on your paid-off home. Instead of using that money to buy a cash-flowing investment property, you use it to cover daily expenses or upgrade your lifestyle. Now you’re using leverage against a liability, and your home is on the line.
The math doesn’t work, and eventually it catches up. People who fund their lifestyle through home equity often end up working well into old age just to service that debt. The difference between this and what Kiyosaki does comes down to one word: cash flow. If the borrowed money isn’t generating income that covers the loan, it’s not leverage. It’s debt.
⚠️ WARNING: The moment you’re dipping into your personal income to cover a loan payment on an investment, you’ve crossed from leverage into debt, and you need to reassess your position immediately.
Using Your Assets as a Borrowing Base the Right Way
Here’s where most people leave real money on the table. Once you own assets (home equity, a rental property, or a stock portfolio), you have something sophisticated investors understand and average investors often don’t: collateral.
Using Home Equity the Right Way
Suppose you’ve built substantial equity in your home. You could take out a HELOC (often up to $400,000) and use that capital to purchase one or two cash-flowing rental properties. If those rentals generate enough income to cover the HELOC payments, insurance, maintenance, and all carrying costs, and put a few hundred dollars back in your pocket monthly, that’s legitimate leverage. The interest is deductible as an investment expense on Schedule E, not personal mortgage debt.
Using Your Investment Portfolio
Many investors don’t realize that brokerage accounts can also serve as a borrowing base. This is called a securities-backed line of credit (SBLOC). If you have a portfolio worth several hundred thousand dollars, you can often borrow against it at rates roughly 1–2% lower than traditional real estate financing, without income qualification, because the collateral is already sitting there.
📌 THE GOLDEN RULE: The asset being purchased must generate enough cash flow to service the debt. Borrow responsibly, deploy into income-producing opportunities, and the math can work powerfully in your favor.
Knowing Your Risk Tolerance: The Most Honest Part
Here’s what very few financial educators will say out loud: not everyone should play the Cardone/Kiyosaki game. These are individuals with extreme risk tolerances, decades of experience, deep advisor networks, and asset structures designed to protect their core wealth even if part of their portfolio fails.
High-leverage strategies can (and do) wipe people out. Even sophisticated, experienced investors. There’s a real story of someone losing $138 million through aggressive leveraged transactions. It happens. And it never would have happened under Dave Ramsey’s principles.
Before applying any leverage strategy, ask yourself these three questions:
- Do you fully understand the worst-case scenario of every leveraged position, numerically and specifically?
- Do you have the reserves and liquidity to survive a significant market correction without forced selling?
- Do you have legal and financial structures in place to protect your core net worth if a leveraged investment goes south?
If the answer to any of those is “I’m not sure,” you’re not ready for the Cardone/Kiyosaki level of leverage, and that’s completely okay. Building wealth slowly, consistently, and safely is still building wealth.
Run your own numbers with the Infinity Calculator.
The Bottom Line: There’s No Universal Right Answer, but There Is a Right Framework
Here’s how all three philosophies fit together:
STAGE 1 (Dave Ramsey): For people currently losing the debt game: carrying consumer debt, living paycheck to paycheck, using credit to fund lifestyle. Get here first. This is the foundation.
STAGE 2 (Cardone & Kiyosaki): For people who have mastered the basics and are ready to scale, using leverage on income-producing assets with clear cash flow, proper reserves, and sound legal structures.
THE BRIDGE BETWEEN BOTH: Financial education. Understanding debt vs. leverage. Knowing assets from liabilities. Learning to read cash flow before you borrow. Building the legal and tax structures that protect you when (not if) something goes wrong. That’s what Infinity Investing is built around: getting rich slowly, with your eyes wide open.
Key Takeaways
- Debt = borrowing against a liability. Dangerous and can trap you.
- Leverage = borrowing against a cash-flowing asset. Can build wealth, if done correctly.
- Dave Ramsey is right for eliminating consumer debt on liabilities.
- Cardone and Kiyosaki are right about leveraging asset portfolios, but it requires financial sophistication and risk management.
- Home equity and stock portfolios can serve as a borrowing base, but only to fund cash-flowing investments, never lifestyle expenses.
- Know your risk tolerance honestly, build reserves, and protect your core net worth at every stage.
- When in doubt? Be Dave Ramsey. When you’re ready and educated? Leverage wisely.
Ready to take the next step?
Talk to one of Infinity Investing’s advisors to take the next steps on building your wealth. Book a free strategy session.