Debt And Wealth Creation: A Delicate Symbiosis

Like most other Floridians, I did not grow up here. I grew up in land far, far away with far less humidity. So, I tend to look with awe upon some of the ways that plants just “magically” grow around here. Will I ever get used to ferns like this just randomly growing out of tree trunk? I hope not – I actually hope I always look with a bit of wonder at the “air plants” that seems to grow almost magically on tree limbs.


Ferns and air plants grow out of trees all over the place in Florida. Craziness!

Seriously, aren’t these things amazing? We had a huge air plant fall out of a pine tree almost two years ago. Since then, we have kept it in an empty flower pot (no dirt or water) next to our front door. It’s still alive! How does this happen?

So what does any of this have to do with debt and wealth creation? Well, it all comes back to the strangler fig.


What’s A Strangler Fig?


Looks cute, huh? Just a few little tiny branches of leaves sticking out of the palm trunk…

If you’ve never heard of a strangler fig tree, don’t worry – I had never heard of it until I moved to Florida. But you’re in for a treat, because they are a heck of a neat plant. Strangler fig trees start out like the ferns and the air plants in the picture above. Just a few leaves or a tiny branch or two poking out of the spines of a palm tree. Although they can grow on LOTS of different types of trees, one of the most common places to find them is growing out of palms since it’s so easy for them to take root in the spiny bits that stick off the trunk of a palm tree left over from the palm froms that have died and been removed.

The strangler fig takes root in the palm and starts to grow. But instead of staying small and manageable like the air plants or the ferns, before you know it, the strangler fig can be as tall or taller than the palm tree. As it reaches up to the sky, the strangler fig continues to wrap its trunk around the trunk of the palm tree while at the same time the strangler fig is cutting off the sun from the palm.


Strangler Fig starting to outgrow the palm…

Sure, it took a few years to get to this point, but now the palm tree is in trouble. It’s not getting the sunlight that it needs, and might also be having trouble getting all the water it needs from the soil as the strangler fig is requiring more and more. After a while, it gets to be too much for the palm – and it dies. But since the strangler fig can’t really grow without anything to climb, when the palm dies, the strangler fig starts to have trouble too! It might stay alive for a few more years as the rotting palm tree trunk wrapped within its own trunk dies away completely, but it’s not going to have a long life.

What looked like a pretty symbiotic relationship between the palm tree and the strangler fig is no more, and they both end up dead over it. Not really a fun ending, huh?


You Said We’d Be Talking About Debt And Wealth Creation, Not Plants…


Less cute when the strangler fig starts to completely close off the palm trunk to the open air…

Okay, I’m getting there. Like the strangler fig and the palm tree, debt and wealth creation can have a pretty symbiotic relationship. In order to buy all of our real estate portfolio over the last three years, we took on a good chunk of debt. Without that debt, we wouldn’t have been able to make those purchases at a time when real estate prices were at historic lows and interest rates were, too! So that debt is a large part of why our current net worthis doing as well as it is. That debt helped us to create wealth for ourselves over the past few years.

We could keep borrowing – heck Wells Fargo wanted to loan us another $100K – but like the strangler fig, when left to grow without bounds, debt can manage to kill the wealth that it helps to create, too.

The key is making sure you keep it well under control. If you find yourself with a strangler fig growing out of a palm, it doesn’t have to be the end of the palm tree. Just trim the strangler fig. Never let it get big enough that it chokes out the palm. They can BOTH grow to greater heights as long as the strangler fig is not allowed to grow bigger than the palm.

See the similarity with debt and wealth creation? A bit of leverage (debt) can help you along the path to wealth creation – but letting it get too ahead of you… well, let’s just hope we can all learn the dangers of being over leveraged from the Queen of Versailles. [For what it’s worth, we haven’t yet seen this movie since it hasn’t come to our area, but I really want to see it!]


What do you guys think? Can debt and wealth creation work symbiotically, or are you a purist that never wants to use debt ever?

Bonus questions: Had you ever heard of a strangler fig before today? And if you’ve seen Queen of Versailles, tell me it’s worth looking forward to since I have no idea when it’ll get here! (Or on video…)


28 comments to Debt And Wealth Creation: A Delicate Symbiosis

  • I’d like to see Queen of Versailles too! This trailer is crazy.
    I am not a purist when it comes to debt, I like “good debt” because it allows me to do more with my money. I am very cautious not to let it be too much. I went into debt for a rental property too, and it is covered by the rent. I like to see the debt shrink every month and increase my net worth when I didn’t really do much about it!

    • Isn’t the trailer crazy? The nearest theater playing it is quite a drive from us, but I can’t say we haven’t been tempted to make a day trip of it if we could find some other excuse to make the venture. But that’s a lot of gas to spend to go see a movie =)

  • I love this comparison! I feel the same way about my university- sure all my schooling left me with a disgusting amount of debt but I’m better for it in the long run. I have a career I love and can grow in and a life I would not be able to otherwise afford should I not have taken on the additional debt. Sucks now but will be great when I get it paid down/off. I have heard of a strangler fig but I studied biology in my undergrad, that and we have a similar parasitic vine in Nova Scotia that affects our hardwood trees but it’s not really an issue.

    • I’m no expert, but I don’t think we have a big issue with the strangler fig as horribly invasive or anything like that. The curators at some of the nature parks always point them out as curiosities – so now I spot them when I’m around but as invasive species in Florida go, I think this one’s pretty low on the list.

      Glad that you feel your student loan debt was one that helped you create wealth for the long run. I, too, took on what I thought was a reasonable amount of debt for my schooling, and I think it was good for me – but I know other people are struggling as they might see the payoff differently with the current job market in some areas.

  • I totally agree. Using debt to create wealth is what we have done too…but left unrestricted it can get out of hand! It has to be a balance.

  • Jonathan

    I agree wholeheartedly with your point about the relationship between debt and wealth creation. But there’s no way you can convince me that a strangler fig growing out of a palm tree is a symbiotic relationship! It’s a parasite which gives no benefit to the palm.

    • Point well taken – maybe “symbiotic” wasn’t the best word… That said, id there really no benefit to the palm? I’m no botanist/arborist (just an optimist!), but can the additional root structure strengthen the palm’s connection to the ground? I always thought that the root structure of palms was relatively small compared to how heavy their trunks actually are…

  • Kind of goes along the lines that you need to spend money to make money. Leverage is a great tool if you are responsible.

  • I agree, debt can be a great tool to be used, as long as you keep it under control.

    • I thought this might be more controversial – there seemed to be so many complete debt aversionists that want to buy houses in cash to avoid even a mortgage!

  • Your point is an appropriate. Debt can allow us to aquire homes, educations, vehicles etc.. But losing sight of debt to ability to pay ratio is why we see so many in trouble today.
    We’ve personally used debt for homes, 0% interest loans for vehicles and kept our money in the bank, and in earlier days to fund our kids adoptions, this was debt that has rewarded us many times over, but ultimately needed to be dealt with so as not to steal ours and our childrens futures. It is a symbiotic relationship, and does require control to make sure it stays that way and doesn’t take over as your strangler fig situation details.

    • You’re very right about losing sight of the “ability to pay ratio” – I don’t think I could ever use a cash out refinance or anything like that to fund anything other than an investment – and even the investment needs to be really justified in our minds. (We did take out a HELOC on the rental duplex to fund half of the purchase of a third piece of real estate…)

  • Jonathan

    I agree wholeheartedly with your point on the relationship between wealth creation and debt. However, you can’t convince me that the relationship between the strangler fig and the palm tree is “symbiotic.” The fig is a parasite, stealing nutrients and water from the palm even when it’s small.

    • See my comment above – and sorry it took a little time to get your comment approved! (the J.O.B. got in the way…) We only moderate your first comment, so the rest should go up immediately. Thanks for commenting!

  • You have arrived when you can make a PF analogy out of anything! Great example. We also use debt to build weatlth, but only good debt that makes us money.

  • I completely agree with you on your statement that the wise use of debt is the way to create wealth.

    As William Nickerson said “Follow the freeway the freeway that leads to wealth by harnessing the secret force of capitalism: the power of borrowed money.”

    And, of course, I’m going to steer clear of strangler twigs.

  • Oh that Queen of Versailles movie was playing at a local theatre near my place and I really wanted to see it. I bet it will be on Netflix in a few months though.

  • Debt for real estate is really the only kind of acceptable debt IMO. I mean what other investment can you put up only 20-30% of the investment but get 100% of the returns!?

    Anyways, very cool pictures, have you heard of a banyan tree? I saw one for the first time in Maui and it was gigantic and amazing…

    • Banyans are awesome. If you’re ever in S Fl, it’s worth looking up the Edison Ford winter estates as they supposedly have the oldest banyan in the US – a gift to Edison in the 1920’s…

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  • Never heard of the strangler fig, but here in the midwest we have honeysuckle which acts the same way!