What effect does debt have on investment opportunities, according to Dave Ramsey?

Debt can significantly impact an individual's ability to invest wisely and effectively. When people accumulate debt, they are often diverting a portion of their income to pay off interest and principal, which can limit their disposable income. This reduction in available funds means that there might be less money set aside for future investments or savings.

Moreover, carrying debt can also create a sense of financial instability, which may lead to individuals avoiding investment opportunities altogether, as they may prioritize paying down debt over growing their wealth. Consequently, high levels of debt limit the capacity for long-term investments, as individuals may find themselves in a position where they cannot take advantage of favorable investment circumstances or save adequately for their future. Thus, the correct understanding in this context is that debt indeed restricts an individual's investment potential, leading to a focus on debt repayment rather than wealth accumulation.