How Wealthy Investors Think About Money (And What the Middle Class Gets Wrong)
By Ken McElroy
Most people spend their entire lives working for money—but they never stop to ask, “What does money actually do for me?”
If you’re trading time for dollars or saving for some imaginary rainy day, you’ve already lost. Why? Because the wealthy don’t think that way. They see money as a tool. They use it. They don’t just save it. And that one mindset shift changed everything for me.
How It All Started for Me
I didn’t buy my first rental property until I was 34. It was a two-bedroom, two-bath condo. I put $30,000 down—my entire life savings—and it cash flowed just $50 to $100 a month.
But that little condo was my ticket out of the financial services world. I was tired of gambling my money on stocks and wealth managers. I wanted control. That’s when I realized: my tenant was paying off the mortgage for me.
I wasn’t trying to get rich quick. I was buying my freedom—one property at a time.
Wealth Is Built with Cash Flow, Not Paychecks
Most people think money is something you keep. The wealthy know it’s something you deploy. While the middle class saves and hopes, the wealthy invest and control.
Let me be clear: I didn’t acquire 10,000 units because I had millions of dollars. I did it because I understood how to use OPM—Other People’s Money—and I knew the difference between good debt and bad debt.
Today, I’ve got over $800 million in debt. And I sleep like a baby. Why? Because my tenants are paying it off for me.
Good Debt vs. Bad Debt
Most people run from debt. I run toward the right kind of debt.
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Bad debt takes money out of your pocket.
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Good debt creates income.
If you understand this distinction, you can build wealth using banks’ money, not your own. That’s exactly what I’ve done for decades—use leverage to create cash flow and long-term appreciation.
The Bank Doesn’t Work for You—It Works for Me
Here’s a reality most people never grasp:
When you deposit money into a bank, that’s a liability for the bank. They owe you interest on it.
So what do they do?
They lend that money out—to investors like me—at a higher rate. They make money by lending, not saving.
Why not play the same game?
Play the Long Game
Wealthy investors don’t think in weeks or months—we think in decades.
When I buy a property, I ask:
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Will it cash flow now?
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Will it protect me from inflation later?
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Will it appreciate with the right strategy?
Recently, we refinanced a property we built for $33 million. It’s now worth over $60 million. But that didn’t happen overnight. It happened by playing the long game: letting tenants pay down the loan and letting the market work in our favor.
Taxes Are the Biggest Expense You’ll Ever Have
Let’s talk tax strategy.
The tax code isn’t just a list of rules—it’s a roadmap. It’s designed to tell you where the government wants your money to go. Real estate, energy, agriculture—these sectors all come with massive tax incentives.
If you’re paying too much in taxes, you’re investing wrong.
Once I learned about depreciation, bonus depreciation, and cost segregation, everything changed. Not only was I generating wealth—I was learning how to keep it, legally.
Most People Don’t Control Their Money
Here’s the hard truth:
Most people don’t even know where their money is. It’s in mutual funds, ETFs, retirement accounts, and they meet with their financial advisor once a year—if that.
Meanwhile, fees eat into their returns and they hope the market goes up. That’s not a strategy. That’s a gamble.
I’d rather own one duplex that pays me $500 a month than bet my future on the S&P 500.
The Wealth Formula in One Sentence
Money is a tool—not a goal.
Use good debt to create cash flow.
Think in decades—not paychecks.
Treat the tax code like a playbook.
And most importantly—stay in control of your capital.
Final Thoughts
I wasn’t taught any of this growing up. I had to learn it the hard way. But once I understood how the wealthy use debt, taxes, and cash flow to their advantage, everything changed.
If you’re ready to break free from the paycheck-to-paycheck mindset, it starts with how you think about money.
Because when you shift your mindset, you change your future.
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