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Why This Millennial Got Himself into More Debt After Educating Himself Financially

The title doesn’t quite sound like me does it? Well, I’ll let the cat out of the bag early here….it isn’t. I’m a no debt guy and I always will be. BUT, there are plenty of people in this world that still believe in debt as a means of creating wealth. Benjamin Davis is one of them.

After learning a bit about what Benjamin is doing to (hopefully) retire at the age of 33, I thought it’d be pretty cool to have him on the blog and hear his strategy to retire early by taking on loads of debt. 

It’s definitely a different mindset, but I think it’s absolutely worth hearing him out and potentially learn something new about personal finance. 

Have a read, and be sure to flood the comment area with your thoughts!

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Why This Millennial Got Himself Into More Debt

I am in my late 20s, and as a good millennial I am, I tried to stay away from as much debt as I could, up until a few years ago. I won scholarships throughout college, so I didn’t end up with any student debt (it also helped to do part of my studies in Europe, where tuition is way lower than in the US).

strategy to retire earlyAs a millennial, this is pretty much what you are told:

  • stay away from debt (except for college debt because you can’t really avoid it),
  • get a good job, and
  • pay off your debt and live debt-free.

The only real advice that is given so that you get into debt is buying a house. But not any house: a big house, where 200k may be enough for a down-payment. And your house should be a single unit property, with more rooms that you can occupy, and a house that can impress your friends as well.

Sounds familiar?

OK, I haven’t followed any of this advice.

Matter of fact, I get myself into more debt as time goes by (I am actually looking to borrow more money from the bank this month) and I will never ever buy a single unit home unless we are talking about a fix and flip property that I can sell in under 6 months.

My Strategy to Retire Early

Back in 2014, I started a small real estate business, which has been successful to date. I started my PhD in 2011 but due to a very bad environment and a demanding boss, I ended up developing the Chronic Fatigue Syndrome. Now I knew that I couldn’t work much longer, so I learned a lot about investing in order to create passive income streams. I invested in pretty much everything from the stock market to P2P lending, but nothing excited me as much as real estate…

I started with a single unit profit that I could flip in a very short time-frame, and now today I own 10 units. My goal is to reach 100 units eventually, and I am confidant I will get there.

For small investors like me, my opinion is that a Real Estate business can only scale (and become truly profitable) if one leverages a lot. The first time I borrowed money from a bank I was really nervous… After all I’ve been told, up until that day, that I shouldn’t borrow!

Today, I realize that debt can be terrible, affordable or awesome and even essential.

Let me tell you why.

Debt – Is It Good or Is It Bad?

To start this discussion, let me create an analogy. Imagine you have an e-commerce site and you sell your product there. If you work hard to attract organic traffic, you’ll lose time that you could be using to improve other aspects of your business. So you decide to buy traffic.

Here’s some illustrative numbers to help me explain the idea. With 70% probability, you’ll generate a net profit that is way larger than your expense with paid traffic. With 50% probability, you’ll at least break even.

If this is really so, than if you buy enough traffic, enough times, probabilistically speaking you’ll always generate a net profit on your paid traffic. This is why paid traffic is so crucial today in building businesses. And it is certainly not because it is paid that it is bad.

Good Debt

OK, I made you buy into the idea that paid-for traffic can be great. Now, let us apply that to debt and real estate. What if you had no money and wanted to invest? You could borrow money from the bank, having someone (a tenant) paying you for using an asset that you bought with the bank’s money. Technically, you’re a middleman in this process: you had the bank buying a home and you monetized it with a tenant. You collect the extra cash (whatever is left at the end of the month, after paying for the mortgage installments, tax and maintenance) and the equity you build over time.

Bad Debt

Bad debt is precisely the opposite: something that you use to buy liabilities, which will only trap you more and more into the rat race. Think of a home that will take you 30 years to pay off, while forcing you to paying taxes and maintenance along the way. Think of a car that costs so much money you need to pay your debt for over 10 years. Or a boat, or a vacation… and the list goes on.

Next Stop – Financial Freedom!

My rule is, I only pay interest (in our e-commerce store example, paid traffic is the analogue) for something that enables me to make more money. That is good debt.

I am on track to be financially free in my early 30s because I used tons of good debt. I think that knowing the difference between good and bad debt should be the first thing people should know about managing money. If you want to know more about money and how I will become financially free in my 30s, check out my blog and my book “My strategy to retire early“.

So what do you think? Is debt the way to financial freedom? Is this the best strategy to retire early?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. “(except for college debt because you can’t really avoid it),”
    Really? I avoided it.

    • Yup – totally agree with you Howard. It’s definitely not as easy today, but once you throw up your hands and just say, “Student loan debt is unavoidable”, that’s when you get into trouble. THAT’s when the debt truly starts to rack up, because you lost belief in what’s possible.

  2. Using debt wisely is a great way to build wealth. But if things start going the opposite way, then you have to make adjustments!

    I’m looking to balance debt and non-debt. Consumer debt such as auto and credit cards are not something to take on, but utilizing HELOC funds and mortgages for additional investments can work out.

    • I say if you can build wealth without debt, why not go that route?? I figure Liz and I will be worth over $5M someday… Is it really worth risking our livelihood to earn more than that? I say no.

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