I attended my first real estate investment class in 1974. The two-day program cost me $385, which was a fortune at the time since my salary was less than $1,000 a month.

After months of searching for my first investment property, I found a tiny, one-bedroom, one-bath condo in Lahaina, Maui, the world famous beach resort. The condo was priced at $18,000. Not having any money, I used my credit card to finance the 10 percent down payment of $1,800.

In other words, I used 100 percent debt to buy the property.

Even though I was leveraged 100 percent, which I do not recommend even though I did it, I was netting approximately $20 a month positive cash flow after all expenses and debt were paid. At the age of 27, I owned a condo in Waikiki, in which I lived, and a condo in Lahaina, which I rented. My real estate investing career was launched -- and I was in debt up to my eyeballs.

The Credit Card Tycoon

Being single at the time, several friends and I would get together regularly at a popular downtown Honolulu watering hole on Friday afternoon to have a few drinks and, if we were lucky, meet some of the pretty women who worked in downtown Honolulu. The Friday after closing on my Maui condo, I told my friends about my investment.

"Are you crazy?" asked one friend, a young attorney fresh out of law school.

"You're nuts," said another friend. "You purchased a condo with a credit card? Do you know how risky and foolish that is?"

"Yeah, but it's a great deal," I replied defensively.

My friends just continued to laugh at me, calling me the "Credit Card Tycoon." The more I defended myself, the more they ribbed me and the more they laughed. I finally gave up and went to talk to a group of pretty women.

About a year later, we were all together again at that same watering hole where we met almost every Friday.

"Well, how is the Credit Card Tycoon doing today?" asked a friend who was a young attorney. "Buy any more property with your credit cards?"

"No." I replied with a grin. "I sold one for $48,000. I made about a $30,000 profit in a year."

Although it was good to have the ribbing stop and to win my point, the most important lesson was that I had learned how to use debt to get richer.

From $25 a Month to $29,000 a Month

My wife had a similar experience. She bought her first property in 1988. It was a small two-bedroom, one-bath home in a great neighborhood in Portland, Oregon. The purchase price was $45,000. She put $5,000 down and earned approximately $25 a month after expenses and debt service.

Some of her girlfriends made the same comments my friends did. They thought $25 a month was not worth the risk of borrowing money. What her girlfriends failed to understand is that it wasn't the money that was important at that point. It was the experience.

Using that experience, my wife bought a piece of commercial property 16 years later for $7 million. Since the property was such a great investment, a banker gave her most of the money -- yes, as debt. Every month, after paying all expenses, the net income into her bank account is approximately $29,000. That's more than many people earn in a year.

In her talks, she often asks people, "How long would it take you to save $7 million?"

Most people admit that it would take a while to save that much money, if they could do it. She then points out that to save $7 million would require earning nearly $14 million before taxes to net $7 million in savings. The thought of earning $14 million is beyond what most people can do in a lifetime. She tells her listeners that it took her two weeks to find the $7 million as debt financing, which is tax-free money.

She closes by asking, "Will your banker loan you $7 million to invest in mutual funds?"

Debt Is Not the Problem

"My banker is my best partner," my rich dad used to say. "He loans me 90 percent of the money and I control 100 percent of the property, 100 percent of the profits, and 100 percent of the tax breaks. All I have to do is find great investments he wants to be a partner in."

There are many financial experts who say "get out of debt," "pay off your credit card bills," or "pay off your mortgage." Many of them seem to think all debt is evil.

"Debt is not the problem," my rich dad said. "It's what you buy with debt that can cause you problems."

Between 1995 and 2005, savers -- people who saved money in bank accounts or in mutual funds -- were the big losers. They lost because the stock market crashed. Between 1995 and 2005, many of the debtors who took advantage of low interest rates to invest in real estate made fortunes in the biggest real estate boom in the history of the world.

Understanding how to use debt to increase their fortunes is another reason the rich get richer.

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