How to Earn Money with a Credit Card

Peace family Will Roundtree here. Today, I’m going to talk to you about how I use credit cards to make money without money. That’s right, you heard me correctly. Here we will discuss How to Earn Money with a Credit Card.

Understanding Debt Structures

One of the things that a lot of people have a hard time grasping the concept of is, how can you take debt to make money. Most people don’t understand the different debt structures. That’s right, there are three different debt structures:

1. Unsecured debt: This is where you have debt that makes you no money. This is your primary home, your car, and different things like that. Now, those things can make you money, but for most people, they don’t.
2. Restructured debt: This is where someone may have to file for bankruptcy. Now, I know what you’re thinking, “Well, bankruptcy is bad.” Bankruptcy is only bad when you’re filing it for no reason. Bankruptcy is only bad when you’re filing it for that late credit card payment. That’s right, that happens. Bankruptcy is only bad when you file it because you thought you could bankrupt your student loan debt. No, you can’t. I don’t care what that attorney told you—he’s just trying to get the $1,200 out of your pocket.

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Using Debt to Make Money

Restructured debt is when you’re trying to protect your assets, and a lot of times, your assets are your income. But how can debt (or, i.e., credit cards) make you money? It’s about understanding structured debt.

Personally, when I’m ready to invest—whether it’s in business, real estate, stocks, or crypto—anything that can potentially make me money, I’m going to use actual debt. See, most people utilize credit cards to go on vacations, and trips, go to happy hour, and just live their everyday lives. But when you understand how debt can make you money without using any of your own money out of your pocket or your bank account, you start to understand the power of leveraging credit or leveraging debt.

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Leveraging Credit vs. Saving Money

Most people don’t understand that concept. They think they have to save money. Now, you can, but I teach a lot of the people who I work with to utilize your cash for emergency situations—brake glass type of situations. Let’s take two individuals: One person has no money, and the other person has a good job and is looking to get into their first investment property.

Well, both individuals are looking to invest in real estate. Take person A, who’s like, “You know what, I’m going to go out there and build up my credit.” We’re going to help that person start building their credit, set up a business, and secure them a bunch of debts—that’s right, debt that can make you millions. That’s credit in the form of personal credit cards, business credit cards, business lines of credit, and installment loans. There are different types of debt (i.e., credit) that you can leverage.

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The Power of Debt for Wealth Building

Then, you take person B, who says, “You know what? I’m going to save my down payment for my investment property, I’m going to save to start that business, or I’m going to save for whatever their end goal is.” Now, here’s the difference between person A and person B:

Person A has some benefits. As long as I have great credit, I can show proof of income, I have my business entity intact, I’m bank compliant, and all of the other data points and metrics needed to get approved from the bank, I can go to as many banks in North America as I want and apply for credit. I can get multiple approvals. Now, let’s say that process takes me one week to do because all the other data points are in place. I’m able to get $50,000 in a week. How to Earn Money with a Credit Card?

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Comparing Debt and Savings

How long would it take person B to save $50,000? For most individuals, never in a lifetime. Let’s take the average person’s salary. The average salary is anywhere between $30,000, $35,000, and $55,000. After you add in expenses, inflation, and taxes, the average person doesn’t even have enough money left at the end of the month to be able to save $50,000.

We can take statistically that 55% of African-American households have less than $500 in savings. So, how is it even applicable to save $50,000? Person A already has a head start because they understand the power of debt.

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The Drawbacks of Saving Large Amounts

Now, let’s just say you can save $50,000 in a bank. Here’s what’s going to happen: one, how long can you even let $50,000 sit in the bank? It’s like having that $100 bill in your pocket. Once you break it for that 25-cent gum, you’re going to just go through it. And by the time you get home, you leave the house with $100 but come home with $100. That’s the same thing that’s going to happen when you have that $50,000 in your bank account—you start pinching off of it, you start living off of it. Let alone the bank fees, the transaction fees—you can’t even get access to that $50,000 from the bank without setting an appointment because some banks don’t even hold that much cash on premises.

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Why Debt is More Effective for Wealth

A ton of different reasons why sometimes having $50,000 in a bank isn’t even applicable, and you don’t truly have $50,000 at the end of the month. Just after the fees they charge you for holding your money in that bank.

Going back to person A: because I’m able to use debt, you don’t pay taxes on it. As I mentioned, in seven days I went to several banks and got $50,000 worth of credit. And now, I don’t pay taxes on it. Secondly, once I use it and pay it back, that $50,000 is available again. That’s How to Earn Money with a Credit Card.

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The Strategy Behind Leveraging Debt

Getting into the actual topic of this blog: How I use my credit cards to make money without money. Person A, let’s say they had no money, but because they had great credit, a business in place, their business was bank compliant, and they met all of the data points and business metrics to get approved and were personally mentored by me, they were able to go through the cheat code—or understand the cheat code—of how to get access to what I call “credit” or “debt” to be able to invest in that income-producing asset.

Fast-forwarding to understanding how I’m able to build a multi-million dollar real estate portfolio and build several seven-figure businesses—all using my credit and never using a dime of my own money.

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Using Debt for Real Estate Investments

Imagine being able to have multiple entities, going to the bank, getting multiple lines of credit, and multiple credit cards, and now being able to invest in a piece of real estate or a business. Let me give you an example: Let’s say there’s a property for $100,000. I’m going to go and use my bank and pull what is called the soft costs. Whether that’s your down payment, closing cost, appraisal cost, etc.

Typically, with an income-producing investment property, you’re going to need about 20% down for $100,000. Then, after closing costs inspection fees, and appraisal fees, let’s say you need about $25,000 on a $100,000 property. That’s How to Earn Money with a Credit Card.

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The Benefits of Using Credit

I have a line of credit or several lines of credit that I’m able to withdraw from, so I’m going to go and get that $25,000. Now again, I’m pulling it from my credit. I didn’t take it from my bank account. Let’s say I don’t even have personal money in my bank account. So, I’m going to take that and invest it into a property. The bank is going to cover the acquisition cost for the other 80%. But here’s the thing, and why people don’t understand wealth-building strategies:

That $100,000 property is paying me rental income every single month of $1,000. That $1,000 is not only going to cover the cost of the soft cost from the debt, but it’s also going to cover the mortgage (which is also debt), but then it’s also giving me a percentage or return on my money every single month where I’m walking away with $200-$300, maybe $300-$400 a month. So I’m not positive every single month even though I use debt.

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Conclusion: Using Debt to Build Wealth

That strategy is applicable in multiple different scenarios. Let’s say you’re looking to grow your marketing and need to spend an average of $3,000 per month. Your average ticket price is, let’s say, $1,000. Now, a good marketing campaign should run for at least 90 days. So, if we take $3,000 for 90 days (three months), that’s $9,000. You set aside that $9,000 that you’re taking from your debt, which is tax-free.

Now, your average ticket price is $1,000. It costs you $9,000 to ramp up for that 90 days. So now, for every single client that you convert out of that $9,000 from that 90-day marketing campaign, it’s already servicing the debt. So now, you only need nine customers, or nine products sold, or nine services sold to be able to service that debt in full, and now that money replenishes.

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Final Thoughts

I may be a brand-new startup and have no money in the bank. So imagine not having any money in the bank, and you’re looking to be a new investor from a real estate standpoint. Imagine having little to no money in the bank, and you want to buy into a business that’s already making money. This is why wealthy people understand the strategy or concept of leveraging debt—again, which is tax-free—to be able to invest and understand your return on investment for every dollar spent.

That makes it easier for you to ramp up, and all you have to do is duplicate that strategy multiple times in multiple industries. Multiply the dollar amount that you want to spend, and as long as you’re getting a positive return on your investment, I’m going to use as much debt as possible to grow my real estate portfolio, to grow my business, to invest in more companies, to invest in stocks or crypto, or whatever is popular at that particular time.

But more importantly, I’m going to do my due diligence before I do that and make sure I consult a professional.

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Conclusion

Hopefully, you’ve learned a strategy or two on How to Earn Money with a Credit Card without having no money in the bank. The power is understanding structured debt. The power is understanding that debt is tax-free, but more importantly, you can take that information and go out there and create a positive return on investment, thus truly creating generational wealth.

Family, I appreciate you learning this information and going on this journey with me. If you would like to know more, please make sure that you comment, share, follow, and check out all my other blogs. If you’re not in a position to have great credit to even put these strategies into play, you can see these ideas to generate income.

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