The Untold Truth About Debt: Why Playing Safe Keeps You Small

Introduction: Rethinking Debt

We’ve been taught all our lives that debt is dangerous. From parents to school to society, the message has been the same: avoid debt at all cost. Stay debt-free. Protect yourself from the burden.

But here is the truth: not all debt is equal. Debt is not inherently bad. Debt is simply a tool. In the wrong hands, it can destroy. In the right hands, it can multiply. The question is not whether you should avoid debt, the question is whether you know how to use it.

Every major empire you admire today, from global corporations to Africa’s richest businesses, was built on leverage. And leverage is just another name for debt.

So if you’ve always seen debt as an enemy, it’s time to challenge that mindset.

The Two Kinds of Debt: Destructive vs. Productive

Debt can be divided into two categories:

1. Destructive Debt – This is debt spent on consumption. Food, rent, school fees, or liabilities that depreciate the moment you buy them. This kind of debt keeps you trapped. It creates the illusion of survival while setting you back financially.
2. Productive Debt – This is debt invested in growth. Assets, business expansion, real estate, machinery, systems. Productive debt creates returns that are bigger than the loan itself. It is the kind of debt that builds businesses and empires.

The problem is not debt itself. The problem is how we use it.

Dangote: A Case Study in Leverage

Let’s look at Africa’s richest man, Aliko Dangote. People admire his empire but forget how it was built. Dangote is not debt-free. He has repeatedly leveraged billions in loans to build refineries, cement plants, and factories.

If he had waited until he had the cash, many of those opportunities would have passed him by. Instead, he understood the principle: other people’s money is the fastest accelerator of wealth when used wisely.

Debt did not weaken Dangote. It empowered him. And it can empower you too — if you use it for the right things.

Debt Is Access, Debt Is Speed

Here is a truth many entrepreneurs ignore: growth has a pace. If you only grow at the pace of your savings, you will always arrive late to opportunity.

Imagine this:

• You need ₦50M to expand your business.
• Your savings rate is ₦5M per year.
• That means you’ll be ready in 10 years.

But the opportunity is ripe today. By the time your cash is ready, the market has moved on.

Debt changes that equation. It allows you to seize opportunities in real-time. It moves you from the pace of savings to the pace of the market.

That’s why the wealthy do not avoid debt, they embrace it.

Why the Poor Avoid Debt and Stay Poor

The poor see debt as danger. They use it for consumption and get trapped. Because they’ve misused it, they fear it.

The wealthy see debt as leverage. They use it to expand and multiply. Because they’ve mastered it, they grow faster.

The difference is not in access. Both poor and wealthy can borrow. The difference is in knowledge and application.

The Psychology of Debt

Let’s be honest. Debt feels scary because it creates responsibility. You owe. You are accountable. That fear pushes many to avoid it altogether.

But responsibility is not the enemy. Responsibility is the discipline that forces growth. Debt, when structured well, makes you more intentional with money. It teaches you to track returns, monitor cashflow, and focus on profitability.

Debt is not just about money. Debt is about discipline.

Practical Guidelines for Using Debt Wisely

If debt is a tool, how do you use it without being destroyed by it?

1. Borrow only for productive purposes. Don’t take loans for liabilities.
2. Match loan terms with asset lifespan. Don’t use short-term debt to fund long-term projects.
3. Have a clear repayment plan. Expansion is only wise if it can generate cashflow to repay the loan.
4. Use debt as leverage, not survival. If you’re borrowing just to breathe, you’re already drowning.
5. Seek partnerships where possible. Equity funding can sometimes be safer than heavy debt.

The Real Choice: Safety or Significance?

Being debt-free may make you feel safe. But it will also keep you small. Being debt-leveraged, when done right, makes you significant. It expands your reach beyond your personal savings and positions you for growth that would have been impossible otherwise.

The question is simple: will you play safe, or will you play big?

Closing Thought

Debt is not your enemy. Misusing it is.
Every empire you admire was built with debt. Every mogul you respect has mastered it.

If you want to build something that lasts, don’t just avoid debt. Learn to use it. Master leverage. Because the truth is that the businesses that stay small are not the ones that borrowed, they are the ones that never dared.

Dr. Smith Ezenagu is the Chairman of Esso Group, a diversified conglomerate shaping real estate, finance, education, and media. Dr. Smith Ezenagu is recognized as a real estate & investment mogul, life coach, and private equity expert. He leads Esso Group and its subsidiaries: Esso Properties (awarded Nigeria’s Most Innovative Real Estate Company in 2024 and recognized as the best real estate company in Nigeria), Esso School of Enterprise (the leading institution equipping entrepreneurs), and Esso Capital (delivering smart, trusted financial solutions across Nigeria).