Good Debt or No Debt: Where Money Teachers Split

The Short Version

The five money teachers in these conversations agree on more than the argument suggests: every one of them calls borrowing for consumption a mistake [1][2][3][4][5]. They split on borrowing to buy assets. George Kamel of The Ramsey Show says to take debt off the table entirely, with a modest mortgage as the only exception, because "debt equals risk, more debt equals more risk" [4]. Anthony O'Neal says to wipe out consumer debt and estimates that 95 percent of Americans cannot handle borrowing to invest [3]. Grant Cardone says he wants more debt, having gone from $50 million of it in 2008 to $1.2 billion when COVID hit, as long as a tenant or customer pays it off [1]. Sharran Srivatsaa says telling people to cut up their credit cards is like telling them never to drive, and that the skill to learn is using debt to buy assets [2]. Read closely, each is addressing a different person: the no-debt case is built for people whose spending is the problem, and the good-debt case for people who already have margin, deals and the knowledge to read a contract.

Table of contents

What They Said

George Kamel: take debt off the table

Kamel states the Ramsey position without hedging. His first rule for people in their 20s and 30s is to take debt off the table, mortgage excluded, and save up to pay cash for cars [4]. The mortgage itself has limits: a home payment of around 25 percent or less of take-home pay, and in the Ramsey sequence the house is paid off early [4].

The reason is risk, and he gives the founder's history as the evidence. Dave Ramsey, he says, "out-earned his stupidity in his 20s," knowing how to make money in real estate but so over-leveraged that he lost it all [4]. That is why the philosophy is so anti-debt [4]. He is scornful of the social media version of leverage, in which a creator tells viewers to borrow against a whole life insurance policy and buy ten properties: "All they're doing is being over leveraged trying to get rich quick" [4]. He adds that over 60 percent of people 35 and under get their financial advice primarily from social media [4]. His test for any pitch is how dull it is: "the more boring it is, the more excited I get about the opportunity." [4]

His second argument is that debt is a behavior problem. He started at Ramsey at 23 with about $40,000 of debt, mostly student loans plus credit cards opened for miles and cash back, on a salary under $40,000 [4]. He paid it off with the debt snowball, clearing the smallest balance first regardless of interest rate, because a quick win creates momentum. "It's really not about math," he says [4]. The first shift he asks of people is humility, in his words: "The mindset shift they need to make is that they are not a financial genius." [4] The second is identity. He wants people to become someone who can say, "I'm a guy who doesn't borrow money." [4]

He also argues that income does not solve it. Citing a Goldman Sachs study, he says 40 percent of people earning over $500,000 a year live paycheck to paycheck, because without a plan "your lifestyle creep will just rise up to meet you" [4]. He gives the scale of American borrowing as he has it: over $18 trillion in consumer debt, with $1.67 trillion in auto loans, $1.66 trillion in student loans and $1.3 trillion on credit cards, and an average new car payment of about $750 [4]. He tells college students that a $500 car payment carried for life could mean missing out on one to two million dollars had it been invested [4]. The newest trap, in his view, is buy now, pay later, which he says more than one in four Americans use, one in five for groceries [4].

The sequence he teaches is the seven Ramsey Baby Steps: a $1,000 starter emergency fund; all consumer debt paid off with the snowball; three to six months of expenses saved; 15 percent of income into tax-advantaged retirement accounts; college savings for children; the home paid off early; then building wealth and giving [4]. So the debt comes second, after a small cushion, and the mortgage is handled sixth. He calls an emergency fund a "never go into debt again insurance plan." [4]

Anthony O'Neal: most people cannot handle it

O'Neal, who went from homelessness to a net worth above a million dollars, reaches nearly the same plan with a different emphasis [3]. His five phases are to stabilize with one month of take-home pay and a written money vision, eliminate consumer debt, build a three-to-six-month cushion, invest, and plan for the long game, which includes paying off the home [3].

His claim about debt is a judgment of people, including himself. He believes 95 percent of Americans cannot handle consumer debt, by which he means they cannot borrow money and use it to buy assets that pay the loan off [3]. He has sympathy for people borrowing to survive after losing jobs, but says many are buying things they do not need [3]. He admits to his own versions: subwoofers financed for an old car that could not go in reverse, and a $3,000 Gucci backpack during lockdown because everyone else had one [3]. His rules now are not to buy anything unless he could pay cash for it twice, and to wait 48 hours on anything over $500 [3].

His argument against debt is about who gets the money. He describes working all week to pay interest to banks, some named after wealthy families whose descendants benefit, while your own children get what is left, and he wants people to "stop financing someone else's lifestyle" [3]. What builds wealth, in his account, is the gap between income and spending: "Margin is your number one wealth building tool." [3]

He is not absolute about credit. He says, "I still don't borrow consumer debt." [3] But he also says, "I do have an American Express now that I pay off every single Monday." [3] His condition for anyone else is that "you need to be consumer debt free for at least 24 months" before getting another card, to build the discipline first [3]. He calls the idea that a credit score is everything the biggest myth he sees, notes that many people have an 800 score and not $800 in savings, and still admits that a good score saved him hundreds a month on car insurance [3]. And the reason he gives for the 95 percent figure leaves a door open: the test is whether a person can borrow and have the asset repay the loan [3].

Caleb Hammer: change the behavior before the balance

Hammer runs a show in which he audits real people's finances, and he speaks from the same starting point as his guests. He did "all the stupid American things": a music composition degree on public and private student loans, a credit card maxed out at 18 on his parents' advice to buy a piano, and a financed Nissan Altima [5]. He got a sales job, paid it off and built an emergency fund, which is what he now teaches [5]. His verdict on his countrymen is "the average American is kind of an idiot with money." [5]

His figures run parallel to Kamel's: about $1.6 trillion in credit card debt with defaults reaching around 7 percent, and even more in auto loans [5]. Cars are the hardest habit to break on his show, with guests insisting they need a new $60,000 to $70,000 SUV on a long loan at 20 percent interest [5]. He explains how stretching a student loan from 10 years to 20 or more to free up spending money dramatically raises the total interest [5]. For young people his advice is to borrow as little as possible for education [5].

His distinctive point concerns shortcuts. On bankruptcy he says it "doesn't make sense unless you actually change the behavior that got you there in the first place," and he has had guests who went bankrupt twice [5]. On consolidation he explains Ramsey's objection: people pay off their cards with a new loan, keep the open credit lines, and run the cards up again, doubling their debt [5]. Hammer's own approach is to prove you can follow a budget for a few months first, then consolidate and close the cards [5]. His core rule is "You don't get to have fun if you don't have a fully funded emergency fund." [5] He favors six months of expenses [5].

He departs from the Ramsey camp on one loan they accept. He tells some guests not to buy a house, arguing that renting lets you move for work, avoid maintenance and invest the difference in the stock market, which he says has beaten real estate. He allows exceptions for people who know they will stay, and concedes that since many Americans are bad at investing, a house can serve as forced savings [5]. When Joe Rogan says people feel more secure owning, he answers, "Math is math in the end." [5]

Grant Cardone: more debt, of the right kind

Cardone is the clearest voice for borrowing. He says he had $50 million of debt when Lehman collapsed and $1.2 billion when COVID hit, and that this is what he wants [1]. His real estate portfolio, he says, stands at $2.3 billion [1].

He draws the line between kinds of debt as sharply as anyone in the other camp. In his words, "consumer debt is terrible debt": credit cards, a financed Lamborghini, borrowing for Christmas gifts [1]. On the car he says, "If you can't afford the 24 months, you can't afford the Lambo." [1] Good debt finances an investment that a tenant or customer pays off [1]. Borrowing for presents and borrowing to buy a piece of real estate for your children are, to him, different acts: "I know which one's going to work" [1].

This rests on his wider view of money. Asked what the rich do differently, he says, "They invest money. They don't spend it." [1] He goes as far as saying "a bad investment is still better than a smart spend" on the grounds that an investment has at least the possibility of a return or a write-off [1]. He thinks in long-term appreciation of assets [1].

His lesson from 2008 is the opposite of the one Kamel draws from Ramsey's collapse. The crisis, Cardone says, exposed that he only looked successful: he had too few assets, customers and lines of business. "Small always gets hurt." [1] His conclusion was to get much bigger, and he says that when COVID came the company had its best year, buying more assets and raising more money [1]. The summary of this conversation notes that his views on taking on large amounts of debt are his own and are presented as such [1].

One thing in his account cuts against the simple reading that he just likes leverage. On the television show where he started with $100, he says he never touched the money and never looked for cash; he looked for contacts and for equity in an existing business, taking a share of the growth he created at a mattress store [1]. His advice there is to "go get you some equity" [1]. His method starts with ownership, and uses debt once there are assets and income to carry it.

Sharran Srivatsaa: debt is a tool you have to learn

Srivatsaa, a former Goldman Sachs banker who now runs Acquisition.com, argues that teaching people all debt is bad is a mistake. Telling people to cut up their credit cards, he says, "that's like saying don't ever drive again." [2] The goal is to use debt to buy assets, not consumption; he notes that 47 percent of recent Coachella buyers financed a $180 ticket with a pay-later service [2].

His own first step was borrowed. Living in his aunt's basement after reading Rich Dad Poor Dad, he took two zero-percent American Express offers of about $19,000 each and bought a rental property, repaid the cards, and made around $12,000 to $13,000 [2]. He speaks directly to the other camp: "a lot of these baby step programs are good to get people out of the hole" but he would prefer people never be in the hole, which he puts down to the fact that "folks just don't know how to manage their debt" [2].

He supplies tests that the pure pro-debt slogan lacks. The first is a check across time: did my past self make this decision in service of my future self? Debt taken for three televisions and a Cabo vacation fails it; debt against an asset whose value is rising can pass even when the present self is working two jobs to cover it [2]. The second is his rule for deals, "heads I win, tails I tie", meaning bets where the worst case is getting your money back [2]. The third is a statement about tolerance: "The amount of risk that we can take is based on how much pain we can handle." [2]

He has paid for his own mistakes. A clause he could not read turned an expected $50 million into $4.97 million when the startup he worked for was sold, and he once lost a million dollars to a con man who had hired actors [2]. From the second loss came his four checks for any investment: good people, good intentions, good rationale and good contracts [2]. His conclusion was that it is not about a good or bad investment, but "a good investor or a bad investor." [2] Today about 70 percent of his net worth is in multifamily real estate [2]. His definition of the goal is financial freedom, when "your passive income is greater than your monthly expenses," and he argues the two reliable routes are owning companies and owning real estate [2].

Where They Agree, and Where They Don't

Consumer debt is bad. This is unanimous. Cardone calls it terrible, Srivatsaa says debt is for assets and not consumption, O'Neal and Kamel build their plans around eliminating it, and Hammer spends his show attacking it [1][2][3][4][5].

Looking rich is the enemy. Kamel says "Rich is visible. Wealth is invisible." [4] O'Neal describes people leaving behind luxury goods instead of wealth [3]. Hammer says the poorest people he knows often drive the flashiest cars [5]. Cardone mocks the financed Lamborghini [1].

Spend less than you make and put the difference to work. O'Neal's margin, Srivatsaa's line that "it's not what you make. It's what you keep." and Kamel's living on less than you earn are the same instruction [2][3][4].

The split is over borrowing to buy assets. Kamel says no, apart from a home, because leverage is what wiped out a man who knew how to make money [4]. O'Neal says almost nobody can do it [3]. Cardone and Srivatsaa say it is how real estate wealth is built and that the tenant pays [1][2]. The disagreement is partly about odds and partly about audience. Kamel and O'Neal are thinking of the caller who is $100,000 in debt and wants a holiday, and of the many high earners with nothing left at month's end [3][4]. Cardone and Srivatsaa are thinking of an operator with a deal in front of him [1][2].

They draw opposite lessons from a crash. Ramsey was over-leveraged and lost everything, so the Ramsey answer is no debt [4]. Cardone was too small in 2008 and got hurt, so his answer is scale, with far more debt [1]. Both stories are told by the people concerned, and each supports its own rule.

The mortgage sits oddly on both sides. The no-debt camp allows a home loan and wants it paid off early [3][4]. Hammer, who is otherwise close to that camp, argues renting and investing often beats buying [5]. The pro-debt camp borrows for property that produces rent, which is a different thing from a home you live in [1][2].

Math or behavior. Kamel says getting out of debt is not about math and pays the smallest balance first whatever the interest rate [4]. Srivatsaa took zero-percent money because the math worked [2]. Hammer stands in both places: behavior first on consolidation and bankruptcy, and math on renting [5].

The absolutes soften on inspection. O'Neal uses a charge card and pays it weekly, and values a good credit score for what it saves him [3]. Srivatsaa grants that baby-step programs help people who are already in the hole [2]. Cardone would not finance a Christmas [1]. The planned picture of one camp demanding that every loan be eliminated before anything else is slightly too strong: both Kamel and O'Neal put a small cushion first, and both leave the mortgage for last [3][4].

Why It Works

The case against debt. Payments are fixed and income is not, so every loan raises the cost of a bad month; that is what Kamel means by risk [4]. Interest moves money from the borrower's family to the lender's, which is O'Neal's point [3]. Easy credit also changes behavior: Kamel says one pay-later company tells retailers it can add up to 40 percent to order size, and Hammer says consolidation without a changed habit doubles the debt [4][5]. Removing the option removes the temptation, and a small early win keeps a person going [4]. Margin, once freed from payments, is what gets invested [3].

The case for debt. If someone else's rent or purchases service the loan, the borrower ends up owning an asset bought largely with other people's money, and Cardone says the tax treatment points the same way [1]. Srivatsaa's comparison of his own house flipping with a friend who bought a duplex, lived in one unit, and traded up to a fourplex and a 12-plex is the illustration: the friend's net worth ended at five times his [2]. Real estate, he adds, hedges inflation and is valued on its income [2].

Why both can be right. Debt magnifies whatever the borrower already does. For someone who buys assets with discipline it magnifies ownership; for someone who overspends it magnifies the overspending. Srivatsaa's phrase about good and bad investors says as much [2]. So does O'Neal's 95 percent, which is a claim about people and not about loans [3].

Where It Applies, and Where It Doesn't

The no-debt plan is for people in the hole, and for most people. If you carry card balances, a car loan you strain to pay, or pay-later instalments, every one of these teachers would tell you to stop borrowing, and three of them give a step-by-step route out [3][4][5]. High income is no exemption [4].

The good-debt plan is for people who meet conditions. Reading across Cardone and Srivatsaa, the conditions are: the debt buys an asset; a tenant or customer pays it; you understand the contract; you have checked the people and the numbers; and you can absorb the loss if it fails [1][2]. O'Neal's 24 months without consumer debt is a reasonable test of readiness from the other camp [3].

Scale changes the picture. Cardone borrows against a portfolio in the billions with investors alongside him [1]. Nothing in his account shows that the same approach is safe for a household buying one rental, and he says himself that small gets hurt [1].

Survivors are telling these stories. Cardone and Srivatsaa are describing borrowing that worked. Ramsey's early failure, as Kamel tells it, is the same strategy with a different ending [4]. Srivatsaa's million-dollar loss shows that knowledge does not remove risk [2].

Borrowing to survive is a separate case. O'Neal says he has sympathy for people who borrow after a job loss, and Hammer supports safety nets for those who lack real agency [3][5].

These are opinions. None of the sources offers evidence beyond experience and the statistics they quote, and the right answer depends on a person's income, obligations and temperament.

What To Do With It

1. Sort your debts into two piles. One pile bought things that lose value or are already used up; the other bought assets that someone else pays for. All five teachers would have you eliminate the first pile [1][2][3][4][5].

2. Build a cushion before attacking debt. At least a month of take-home pay in O'Neal's plan, $1,000 in Kamel's, then three to six months once consumer debt is gone [3][4].

3. Pick a payoff method you will stick to. The snowball, smallest balance first, is designed for momentum [4].

4. Do not consolidate or declare bankruptcy until the habit has changed. Follow a budget for a few months first, then consolidate and close the cards [5].

5. Add friction to spending. Wait 48 hours on anything over $500, buy only what you could pay cash for twice, and delete pay-later apps [3][4].

6. Buy the car you can pay for. A long loan on a new vehicle is the purchase all of them single out [1][4][5].

7. Prove yourself before using credit again. Stay free of consumer debt for 24 months, then pay any card in full, as O'Neal does every Monday [3].

8. Before borrowing to invest, run Srivatsaa's checks. Good people, good intentions, good rationale, good contracts; a worst case you can survive; and a decision your future self would thank you for [2].

9. Make sure someone else services the loan. If no tenant or customer is paying, Cardone would not call it good debt [1].

10. Decide which person you are being advised as. If spending is your problem, the no-debt plan was written for you. If you have margin, knowledge and a specific asset, the other argument is addressed to you, and its risks are yours [1][2][3][4].

Sources

1. Grant Cardone: Mastering Money, Persuasive Negotiation & Building a Billionaire Mindset · The School of Greatness
2. Sharran Srivatsaa on Money Loves Speed, Wealth Loves Time, the Four Money Monsters and the Wealth Ladder · The School of Greatness
3. Anthony O'Neal's 5-Phase Plan to Stop Living Paycheck to Paycheck · The School of Greatness
4. George Kamel on Why High Earners Stay Broke, Financial Friction, and the Ramsey Baby Steps · The School of Greatness
5. Caleb Hammer on Debt, Personal Responsibility and Why Young Americans Are Broke · The Joe Rogan Experience