People paying 22% interest to finance their household expenses are not doing it to create investment capital. Most of them don’t have 500 dollars in their savings account.
“People paying 22% interest to finance their household expenses are not doing it to create investment capital. Most of them don’t have 500 dollars in their savings account.”
As a general rule that is correct. However...
People who can get returns above the interest on their debt will/should go into debt up to the hilt to maximize wealth appreciation. If their debt is ever called in they can liquidate some assets to pay it off.
I could pay off all my CC, mortgage, etc. debt within 3 days if necessary. I would just have a smaller snowball to roll down the hill (build wealth with).