Wealth isn’t the sum total of your net worth—it’s a mindset shift. And the way you think about money will predict the amount of financial success you’ll attain over your lifetime. This shouldn’t be news to you. But what might be unfamiliar is the profound mindset shift that happens when you go from struggling to make payments on your Toyota Camry—to signing your name on a brand new Lambo.

And make no mistake: it’s a mindset shift.

Wealth Starts in Your Head

One of the biggest differences between the wealthy and the impoverished is in the perception of money. Specifically, the use of credit. The so-called “cash vs. credit” controversy among business owners has raged on for years—with no end in sight. But if you take a step back, here’s the truth everyone’s missing:

There’s no controversy to begin with.

You see, whether you use cash or credit in your business isn’t some dualistic force of nature—it merely reflects the mindset you have in relation to ROI and wealth. You can absolutely use credit to pay for your advertising, payroll, and supplies. As long as you have the cash flow to justify it, it’s totally up to you.

But that’s not how the wealthy do it. What I’m about to show you are five mindset shifts regarding the use of credit straight from the wealthiest business owners I know. Use this information wisely. You could ruin your life using credit recklessly. But with the right mindset, you can actually benefit from it.

Tremendously.

1. Credit as a Growth Catalyst

One of the fastest ways to see growth in your business is to use someone else’s money to generate positive cash flow in your business. Especially when it’s interest-free. I once heard of an entrepreneur—I think it was Dan Meredith—who talked about doing an AmEx challenge. Basically, he would make a bunch of investments on credit and set a challenge for himself to pay it all off in 30 days. How’s that for a motivational strategy to make your money back? Note: I’m not advocating trying this yourself.

Here is something you probably didn’t realize:

If you have a mortgage, you’re already leveraging credit to grow your wealth.

You already know owning a home will generate equity over time, but another way to perceive the transaction of buying a home is that you’ve leveraged the bank’s money to improve your own personal wealth. It’s a subtle shift, but it’s a substantial one. You see, many people view a mortgage as a major expense, so their thoughts are always focused on the money they owe. But a slight mindset shift when leveraging credit can help you focus solely on the money you’ll earn. In this scenario, the mortgage is no longer an expense, but a vehicle towards personal wealth.

2. Trust Your Earning Power

When people say “I don’t have the money” to invest in their business, what they really mean is they don’t trust their own ability to earn it back. As a result, they’re afraid to put anything on credit.

If you were to dig deeper, you’d discover that the ‘lack-of-money’ thinkers aren’t really deficient in cash—they’re deficient in confidence. If you believe and trust in your own earning power, you won’t be held back by the limits of available capital. You’ll find a way to get the funding you need to reach your goals.

Wealthy entrepreneurs see the challenge of funding projects differently than ‘lack of money’ thinkers. Instead of defaulting to, “I don’t have the money,” and forcing the idea into a cul-de-sac, they ask themselves a few simple questions:

  • “What are the consequences of not moving forward in my business?”
  • “What’s the likelihood I’ll make this money back in 12 months?”
  • “How can I leverage both my current cash flow and available credit to achieve a bigger goal?”

Do you see the subtle mindset shifts there? These small but powerful shifts speak to an underlying trust in your own earning power.

3. Don’t Over-Romanticize Paying All Cash

Paying for anything on credit has a bad rap because so many people abuse it. The lack of discipline in their spending draws many people into valleys of debt with ridiculous interest rates for a long time.

As a result, the natural public reaction to credit abuse is to label all credit a moral issue—and deem credit cards to be “bad.” In turn, many financial experts harp on “good” tactics like cutting up your credit cards and paying for everything in cash. They effectively romanticize the act of paying in cash as though it demonstrates self-discipline.

But the opposite is true.

Wealthy entrepreneurs know how to discipline themselves to take calculated risks when using credit. They’re not buying Bentleys, expensive suits, or fine-dining on credit. They’re using it as cash flow to earn more money back later. Overall, this kind of strategic investment requires more discipline than cash-only payments because you then have to follow through on your plan to get the money back.

4. Don’t Take Stupid Risks

There’s obviously a serious risk to using credit: You could end up never making your investment back and still having to pay what you’ve used. To avoid that, wealthy entrepreneurs prioritize their goals and focus on achieving them with laser-like precision. You should’ve had some kind of track record of earning back the money you’re about to use as credit, or close to it. And if you’re projecting a longer cycle of return, your monthly revenue should be in pace with your investment. In other words, if you expect to earn back enough to pay down the credit over 12 months, you should be tracking monthly milestones to make sure you’re on the right track.

As you pay back the credit, you’ll experience another benefit: you’ll gain even more confidence in your ability to repeat the strategy with another investment. The better your track record is to earn back what you’ve borrowed, the more comfortable you’ll be to leverage credit in the future.

5. The ‘Skin in the Game’ Motivation

When you put yourself on the line for a certain amount of credit, it forces you into action. There’s a deep creative drive that emerges when you know you have to repay a debt. We just recorded a full blown podcast episode on this, which if you have the time you can check out by clicking here, but to the point:

You don’t get the same effect from information products that are $10, $100, even $1,000. Smaller price points might sting for some people, but for most, the burn only lasts a little while. After that, it’s like it never happened. And most of the time, that small investment didn’t sting enough to force you into action. Motivation comes from reward and risk at the same time. 

The reward of seeing your investments brings returns. The risk of not doing anything and losing a lot of money. They both play a part. The reason having skin in the game is so powerful is because it shows your level of commitment to earning your money back. When you’re using your own money—or money you’ll be on the line to pay back in the future—you’re demonstrating a level of commitment that no outside person has in your business. At that point, no one else cares to earn that money back more than you.

With these five mindset shifts, you can see how wealthy entrepreneurs think differently about credit, money and wealth overall. It starts with the discipline and self-control to understand what you’re doing with credit. You can certainly ruin your finances—but you can also use it to open up opportunities that are just beyond your present cash flow.

So take a closer look at your own confidence in leveraging credit. If you’re overly fearful of it, you might need to explore potential mindset issues blocking you from seeing greater opportunities.

 Opinions expressed here by Contributors are their own.

Taylor Welch

Aside from being Chris’s assistant… lol

Taylor lives with his wife in Nashville, TN. He’s quick to tell people that although he doesn’t have kids he DOES have a dog which, in his words, is “basically the same thing.” Chris (his business partner) strongly disagrees with that statement. Taylor’s specialty is copywriting, funnels & sales. He loves traveling with his wife, the beach, playing music, reading, and daily Starbucks coffee.