Topic: Learn to use DEBT in a proper way to create asset - page 5. (Read 1274 times)

And with what we believe seems to be right because that's how we deal with things and think of it. But that belief is wrong because it never had happened to us but the time that we do the same as the other people who committed mistakes in using debt, we'll be able to prove that and our perspective will change.

It is not guaranteed if you don't have any other source of income at all. How can you take a loan and will use it for something like buying bitcoin but then the interest keeps on running and you have to pay for it. You can't just simple file for bankruptcy with that and that's why the lenders who have been doing this have their back ups and actual money prepared to pay for the amount that they've taken as a loan. They wouldn't borrow money just because they don't have money but they can pay it so that they will not use their own money for such investments and businesses.

This is true, people who don't have that much borrow to sustain something they need or an important matter to get addressed. But using it for business, you are not going to see a lot of it.

Robert K always talked about this, being able to utilize debt and the depreciation for tax benefits, I love how much of an advocate he is to BTC, also a huge gold and silver and of course real estate tycoon. I definitely need to brush up on utilizing these tax incentives better

to start a business must have capital, because everything can run with money, a person who has a good idea but does not have enough money to run a business or business in my opinion it does not matter if they borrow money to be used as initial business capital, as long as they are sure that the business or business they run can generate profits in the future, because there are debts that must be paid and of course must also be repaid  In my opinion, this is not a problem,  if they can consider it well, because if they already have a good business idea and business,  it's a shame if they don't run it, so there's nothing wrong with trying, but don't be rash, trying I mean not by basing it,  of course it must be with accuracy because what is wanted is success not bankruptcy.

For example, someone who has a business and wants to open a branch in another place but doesn't have enough money in my opinion there is nothing wrong with them taking out a loan if they are sure that to expand their business network it will be more developed and profitable, of course they need more capital, and taking out a loan for capital to open their business is one way to overcome it. to make it bigger, according to That's not a problem for me, again in my opinion, whatever other people think, maybe their thoughts will be different because obviously everyone has different thoughts in doing something.

Corporations often do this to ensure that their other assets will continue revolving. The idea is letting your business pay your debt/loan for you without actually releasing capital from your wallet. The only risk is assuring that the outlet you created would be profitable enough to generate money and pay it off. I agree with what's cited; there is a good side of taking a loan and also a bad side. It just depends on the purpose and idea behind the amount you will borrow. If it will be used to things which won't generate money and will just depreciate over years, then that's basically unnecessary.

Some are doing franchise to lessen the risk of losing money. Franchise businesses will at least give you better chances for a stable gross especially if you are under a good trade name. It is less complicated than with starting your own business from a scratch especially with introducing it to the public unlike with franchising wherein there is already a public exposure to the brand you will be engaging yourself with.

Collecting loans for business is more advisable than collecting loans for liabilities like car, phones etc.
Business is not certain, it can be profitable and at the same time it can lead to loss, but before you think about getting a loan for business you must have made some research and inquiries about the business and be very sure of it, so you will know every detail about it, and once you know every detail about a business, it will be very hard for that business to collapse, the reason why most businesses collapse is because of bad management of the business or inconsistencies around the business.

That's right, borrowing large amounts of money is only done when the situation is urgent, if you want to start a business it's best not to immediately aim for big things, it's better to do small things first, because starting is what everyone has to do, if they really want to be successful of course they have to start from the bottom first, in my opinion they can borrow money to expand their business network, if you start with small capital, in my opinion this can be done without having to take out a loan, especially with a large amount, that is not recommended.  Don't force yourself to open a large-scale business straight away because it doesn't guarantee that it will produce clear profits.

I agree with you, to start a small business you don't  need a loan to start it, it doesn't matter if the business starts small as long as it can be run smoothly, maybe it will definitely grow, also as you said, a business that doesn't involve debt will have more potential. for success.

You provide a thoughtful view. It's true that if there are no quick returns or assets that can cover the cost of debt I think it will have a huge impact on the health of the money.
In theory, money often decreases in value every year. And if I lend money this year, say 100 dollars, 1 year later the borrower returns the 100 dollars (without interest) there will definitely be a decrease in the value of the money, I think this is because the selling price 1 year ago will increase several percent in the following year. Etc. And it is true that empowering investors to make money through productive projects such as agriculture, industry or services can be sustainable in supporting economic growth.

thats true, one most important thing that many people forget, poor people only can borrow small amount of money, nobody in the financial sector are trusting poor people with big money therefore the difficulty of escaping poverty is kinda obvious, yes some people say to get a loan for a housing then we can rent it, but getting approved in the first place without high income salary is kind of day dreaming.
its always the thing that people with capital are definitely having the advantage, therefore if its people with small capital, continue working, save up those money, grow the capital before thinking about using debt to create an asset.
this way of creating an asset through debt is only for people that already assets before hand, and sometime its also not always a foolproof thing, sometime it doesn't work, imagine the interest rate is spiking so high, there's no other way but to use our personal money to pay up the loan.

Rich dad poor dad mechanics basically. Poor people create liabilities when they take debts, while rich people create assets and opportunities when they take debts. One good example of this is how most companies especially in the housing and real estate sector take up debts and loans from large banking institutions to fund their projects instead of using their pocket money. Why? Cause when the project's already fully erected and they can launch it successfully, the project will essentially pay for itself by paying off its interests with the profits.

But the thing is that you can't expect people, regular ones at that matter couldn't do the same thing that the rich ones could. Imagine, no one's not gonna be able to take such ludicrous loans (of course they have the business loans to take but there's caveats to that since they aren't as affluent as those in the upper echelons) which make it seem as though debts aren't meant for anything other than to support their lack of funding.

Because low income people should not have debt because they usually treat dept as a way to increase more spending without thinking how to create more income.

i saw high networth people also use debt as a way to decrease tax, it's very profitable reminding how much interest they have to pay in order to decrease income tax

Using debt for investment needs is certainly not recommended because you have to pay the debt every month so your income must increase from the previous monthly income, unless you use debt to build a business or increase your business capacity to expand your network more widely. I really avoid borrowing large amounts except for urgent needs for medical expenses and other emergency costs, but for business needs we will prioritize using funds that suit our finances, we don't need to force ourselves to build a big business in an instant but we have to increase our experience in building small business, so we don't need to use loans to build a small business and a business that is not tied to loans will have more potential for success in the future.

Many people think the debt in the wrong way,their thoughts was if they get credits it will pull them backward.But the hidden thing of the debt was the person will get the debt based on their income.So if the person had huge debt means,his rotation of the money also high.In another way the people who have more debt will increase their income sources in the multiple way.So at the final,he will move to the next level by the debts.Only if the person keep on getting debt without more income sources will become more poor.


The money handling people will have more credit cards,because they will rotate the money and inverse in the trading.The risk in the debt also help us to understand the real value of the money in the real world.Also help us to save more money in the future.

Debt could definitely destroy us if it wont really be that handled well. You wont really be just spending it into something which is really that useless because if you do then you would really be ended up on
disaster. This is why it would be always hat best that you should really be that mindful on the decisions that you are making so that you would really be having that less risks on making some damage into your finances.Always mind off about on how you would really be able to add up those income and this is via investment or having business. Taking a loan for some liabilities is really just that a waste of money
but if you are really that prepared on repaying that loan and not really hurting your finances then it would really be just that fine.

Your money then your rules but be sensible on where it should be applied and it should really be on something worth so that you would really be that
able to avoid into those certain situations which we dont really like to happen into us.

There are many misconceptions about debt, but that's because our thinking and mindset isn't quite right.
Indeed, in this case I quite agree when saying debt can eventually turn into profits as Saylor did with the principle of bitcoin maximalism which is done by borrowing money from the bank and converting it to bitcoin but on the other hand things like that are not a guarantee for us who do not have a large guarantee.
In the end, we must know that the majority of people in low economic strata only use debt to support themselves so that they can continue to live, which of course makes it difficult for them, therefore sometimes for those in poverty strata it is not advisable to borrow because it will greatly endanger themselves.

Agree. Debt can indeed destroy us, but it does not rule out the possibility that with debt we can be successful, it all depends on each of us. And debt should not be something we have to avoid, as long as we are willing to learn and are smart about managing finances, then debt can be a lever for us to be smarter in terms of financing.

Debt is good if we can be active and smart in multiplying our money to get more money from our debt, and on average rich people definitely have debt because most of them are good at multiplying money. However, if you can't manage it well, it would be wise to have cash or not be in debt.

Learning the skills you mentioned is possible for anyone, but some people seem to have a natural talent for them, as if they were born with those abilities. In my country, there are rich people who didn't go to school much but are good at business, suggesting they have an inborn knack for it. I don't really believe in luck when it comes to business. I think those who succeed are genuinely good at what they do and know how to make smart decisions, rather than just relying on luck.

Loan is not an option for me, but if I must access a loan facility I will have to be prepared to establish a profitable business that will enable me to adapt to the repayment process, there should adequate plan before loaning because this might cause you things you will live to regret, loan is not taken for fun, this way when you are accessing loan the bank or microfinance bank will stipulate the terms and condition that will help you to access the loan, when you are reading this terms you will know if it the right thing you are doing or not, I know that there are some conditions that might lead individuals to this but one should think very well before making such decision because it might turn to be disastrous if care is not taken.

When we borrowoney, it is good for us to use it for what we want and not allow greed or money pressure to make us to use the money for something contrary for what we want. It is good for us to use borrowed funds according to the way we plan it. People that used borrowed fund wrongly are mostly people that are easily lure by the influence of money. We need to make sure that we become disciplined and use money according to what it is expected to be used for.

We need to under what debt stands for before we start discussing it's usability. Debt is a loan you take to help you attend to a need and when is not properly used then it becomes a problem.
For you enter into debt then you must have a means to repay back as agreed and I won't advice anyone to enter into debt all in the name of stating new business as most times it does work as new businesses often have start up challenges the debtor might not have factored into their calculations but if you want to get it to boost existing business that is paying already then is fine
What defines good or bad debt is in usability & ability to repay back and this boils down to individuals. Debt you don't have means of repaying back should not be taken.

What I noticed is that the majority of people who are in bad debt are the poor and the mid-level or the working class. Many of them will just borrow money when there's a chance without having a plan to start a business. I remember when I was a kid, my family took loans to buy televisions, refrigerators, washing machines, etc. The worst I observed is when someone borrows money with interest to celebrate birthdays, anniversaries, etc.

I hadn't tried taking a loan in my whole life and then I realized that it's not really that bad when used to start a business or a venture that has a huge potential of earning profit. The majority of the rich are smart when it comes to their financial activities so they are mostly in good debts. These billionaires do not even have lots of cash. They are very good at managing and protecting their assets from inflation.