Topic: Learn to use DEBT in a proper way to create asset - page 6. (Read 1274 times)

It's true, there are definitely two types of debt, the good and the bad. I would make the classification a bit different, bad debt is the one that we use for consumption. It doesn't provide any additional value for us except a quick boost in consumption, but it won't make our long-term outlook better. The good debt on the other hand is going to create income and returns in the future that will make our situation better. In most cases I think that debt is unnecessary and should better be avoided, but there are also situations where using debt is unavoidable. For example, when buying a house or apartment the majority of people will be unable to make the purchase from their savings alone. For such a large purchase which we only make a few times in our lives we need to use debt. The debt in such a case should always be consider in relation to the benefit we get from it. With our own apartment we would save on paying rent which we then can afford to pay back our loan. So, we should be only using debt if we get something from it and if there is a benefit in the future. The only exception would be if we need money for a medical treatment, health is everything and comes before money.     

I doubt there's much good debt these days. All debts by me are always of interest that may be twice the debt taken out for the problem. Unless it is to push a business, I wouldn't advice anyone to start off any worthy idea with loans or being in debt at growing stages because when the time comes to repay the loans, it becomes a big issue on how to gather the funds to payback.

Still, there has been those who took out debts and made a risk investment that paid off big time and real estate is one of those kinds of investment as well as taking out a loan or being in debt while working at a job just to maintain a steady DCA strategy of investment that will pay off big time after some years. While the job covers some part of the loan or debt to be repaid, as well as bills that need monthly attention, the loan will ensure that one doesn't fail to keep up with the DCA holdings even if it is but a quarter fraction of the normal amount to be DCAd from ones salary or earnings.

Money is a medium, borrowing is the last option after spending savings for planning and action. Your analogy about business comes to my mind, even capital banks are functioned for business reserves or franchises that have been running for at least 6 months. even cold money that becomes a reserve if used for daily and irregular consumption will certainly run out sooner or later, let alone borrowed money that must be returned even to friends, let alone to financial institutions that have the same tenor and time every month.

Loans can be a good alternative when the business is already running but its role is for temporary replacement funds, for me if you are just starting a company this is the same as gambling with circumstances, it is better to have fun naturally than to put money into a business that does not know its market segmentation and force yourself especially with borrowed money.

Because you don't know how long it will take to maintain liquidity in a new business, when turnover is unstable, of course, installments must still be returned and paid off.

Really indeed the last option and this is something your last resort when it comes on taking up some loan which we know that interest per month or a certain period of time is really just that a burden.
If you arent that good on paying up some loans in your past tries then it would be better that you should not really be making the same mistake again.You would really be just that putting yourself on such trouble
and when things becomes severe then it would really be that so damn hard to get out and this is why it would really be always that best that you should really know on what you are doing. Be sensible
and be responsible on the actions that you are making so that you wont really be ending up on experiencing disasters due to bad decisions that had been made.

You should really be mindful that whenever you do take some loan then you should really be applying it on a business or investment so that you would really be able to have those chance on
making yourself be able to repay those debts on the time that you are already making profits into the investment that you had made but if you are someone who could be able to repay those loans
or debts without doing business or investment then its good for you but we know that not all would really be that on the same situation in regards about financial
status or capacity this is why we should really be that wise.

Perceptions like this can be a fairness in my opinion because indeed many of us use loans not according to their function. even though not all but the average is the same because the behavior of most people and the results of making loans actually make their conditions worse.
It all depends on the behavior of the person who borrows in the end if it is a business brain that is done then borrowing may not be a problem for those who borrow but in other conditions when borrowing is always misused then this will increasingly make the perception that debt is something bad will definitely continue to exist.
So in this case it is important for us to always do what we can and if we can't maximize the situation when we borrow then don't do it if you don't want the situation to get worse.

Taking on a loan should always be the last option to be considered, and this is because even if you do everything right you still owe money to your creditors and you have to pay more than what you took as a loan, and the bigger the loan the more time it will take you to pay it back and anything can happen during that time, as I remember that before the pandemic started one local business I frequented took on a loan to renovate its installations and equipment, and less than one year later it went out of business as the pandemic hit it and the business lost all its clients.

As much as possible a person must avoid debt especially when it is really not needed.  With debt comes interest and the interest gives a lot of headache to the borrower especially when the interest is too high.

In business, it is best if the capital is not coming from borrowed money.  This way when our business is not performing well, we can shut it down without worrying how to pay the borrowed money in establishing that business.

Debt and crowdfunding is too different thing.  People who crowdfund are not oblige to return the money to the investors when the business goes bankrupt though when the business is successful, people who invest in crowdfunding needs to be paid for their shares.

Have you heard the story of Robert Kiyosaki? If you have ever read his book - Rich Dad Poor Dad. He said how he used his first million and entered into real estate. Then his money was not enough he had to take a loan and add it up. In a year he got about three times of the money excluding the capital. Taking loan and starting a business is not a bad idea. This is because if the business is managed properly he would get the money to pay back the debt unless the person is someone who do not like to pay debt or did not discipline himself to keep the money needed to pay the debt.

Well, we have seen a ton of people that lost money on loans and took on bad loans and did terrible damage to themselves and all. It means that we are going to end up with a lot of trouble and we need to make sure that we could do a lot better about it later on, and could be considering the situation carefully as well. I get that we could have some sort of situation that would make sense eventually, and it will not be all that easy, but as long as this stays, we are going to end up with something that will benefit us eventually.

This should be important because we are talking about a deal where we need to handle it all, and that should be the most important case here, it is not going to be all that easy to handle. I get that we may feel like it is going to be scary, but if we could just learn how to get debt that would work for us instead of us working towards the debt, then we could make it work one way or another eventually.

There are lots of them actually who borrow money early on the start of their business in order to grow it evenly. For those who didn't do that, or don't borrow money early, and they think their business are collapsing, they can as well borrow money in hopes of saving it.

The old paradigm is true because many experienced that but for some who are wise enough and has prepared a plan, a debt can be one of the contributors to their success. This is why they don't avoid it but they embrace it very well. For me, I will side for those who won't borrow money because it gives me a peace of mind. My progress can get slower but it's okay because patience is a virtue .

If it were so easy to buy assets with credit funds that could immediately generate income, then everyone could become a wealthy person, but in reality things are a little different, finding such an asset is not easy, often even if the profit is enough to pay the payments for a loan without a loss this is already good, so in theory it all looks simple, but in practice the asset can cause losses.

In my opinion, someone who takes out a loan to open a business is not a wrong choice, but of course there are risks too. where it is true that debt can kill someone or destroy someone's life if they use it wrongly, because debt should be used for good things, such as meeting basic needs or to start a business, someone can take out a loan to start a business, when they have a good idea. It's good, but I don't have enough money to run it. I think taking out a loan is not a problem, because if you have confidence in the business you are running, it can develop well and make a profit, then that's not a problem, by running it optimally or well, you won't experience big losses. , the business you run must be successful in order to make a profit. On the other hand, taking on debt is risky, because there may be higher interest rates, but just be confident that the business you are running can develop well so you can quickly pay off the debt, too. In my opinion there are not many people like this, only some of them dare to do something like this because this is very risky so not everyone dares to take this action.

the other side. If we go into debt by using it improperly then it will probably kill us because the interest will also increase. like young people who haven't worked but they take out loans to force their lifestyle to look luxurious, the enjoyment they feel is only for a short time, whereas they need to pay off the debt they have already incurred, to pay and pay it off of course they have to earn money by working or whatever In essence, it will be an additional burden for them, leading to today's luxurious lifestyle, indeed many people force their lifestyle so that it can be seen by other people. such as from clothes, gadgets, or vehicles. In my neighborhood, there are many young people like this,  they force themselves to be stylish by asking their parents for more money or they themselves take out loans, there are also online loans currently being made by many young people in my neighborhood. of course this is not a good thing, because if they force themselves to be stylish but don't have enough money then they will be killed by their own feelings taking out loans is not the solution, because in my opinion the solution is to work to make money, not by borrowing money, especially in large amounts. not a little.

Debt can kill you and debt can also make you a rich entrepreneur. Good debt management needs to be done to prevent harm when the payment deadline is very close. Those who use debt well will buy assets that provide cash income into their personal pockets every month. Good debt usually builds a business, but it is necessary to review the money that the business to be built must be in accordance with the environment and the needs of local residents. Finding a strategic location must be prioritized so that the business runs smoothly.

Some people have misconception regarding on DEBT topic since they always think about that this is evil act and the person taking loan will be close to get broke since they will be haunted by interest of the amount they have loaned.

But they miss to realize that Debt is only bad when it is use for unnecessary things like buying gadgets or spending it to nonsense thing for sure with that you will provably got broke then get huge struggles to pay all your debts from institutions or people.

But also if they use those loan to make their businesses more bigger like what other successful businessman do for sure all of it will be worth it since by that we can increase our capital to use on our businesses that we want to build or expand. Its just how people gonna take all of this and if they don't have proper self control or financially educated on some things towards their spending's and investment for sure they encounter a huge problem on this loan discussions.

Before a loan committed there's lot of processes will be taken, first is the applicant will need to have a Credit investigation if they have the capability to pay their loans, or if they have an existing active loan and also their salary will be checked too to make sure that the payee is capable to pay those loans. Immediately they will make an action if they will reject the client or if they pass they can now proceed with the papers and agreement with the loan. Else if the payee cant pay they will need to use the small claims or make a collateral on what they have like having a Refinance Lease so the company who lend a money have still the assurance they will get paid.

Both are bad in my opinion, unless you have enough experience in starting a business and it gave you a lot of profits.

You can't guarantee that the good debt you took will give you money in a certain period of time because you started your own business. It's a risk, either it's going to be a success or not, but most of the time, business is only good at the beginning, you will need a lot of money to make it run in a short or long period of time to gain trust of people which will be your customers that will give you profits.

A debt is a debt, as much as possible, it's much better to find another source of income, save money, until you have the capital you need to make an investment, or a business.

Taking out a loan that exceeds our income is certainly a ridiculous step, even for productive debt. Because the risk involved is very large with our financial future. It's okay to be in debt for productive debt but our income and finances remain stable.

Many people enter the world of business by going into debt, which is one of the steps that some people take. Instead of trying to borrow productive debt, mistakes often occur in managing debt used for business capital or investing. In fact, there is nothing wrong with going into debt for productive things, it's just that we are smart in managing debt to be productive. By getting income from the debt both in business and in investment. Again, basically everything must be based on correct knowledge and the targets you want to achieve before going into debt.

Really depends on how you would gonna use it on which we do know that there are people who do took up some loans just to buy up something which isnt important like buying up a car or
really just that spending on their family travels on which i could say that it is really just that too absurd on such situation. Unless if you do took up some loan but you are really that responsible on
repaying back on time. It is really just that a matter of choice whether you would really be that be spending it on your leisure times or you would really be focusing into making up some
business since you dont like on spending up your money just because you are really that mindful about your future.

There are really just those people who dont really care up about their future and would really be just that mindful in regard into their current situation on which there are
really that being too scare that they might not be able to repay up their loans. If you do saw that you could really be able to do so then it would really be just that right
that you should really be repaying back those amounts in time. It is really just that there are people who dont really care in speaking about future.

Debt means so many things to people and it all boils down to it's usability. Debt becomes liability when is taken to be expended frivolously but assets when put in a revenue generating business. It could be a curse or blessing depending on how to use it. There was a new in Nigeria recently about a man from the Eastern part that raised a loan of 2.5m all to use it to bet and lost then commit suicide.

Loan or debt should be collected and used on things that can generate the money back and still give you margin

Debt or loan is the money you do t have on your own but collect to enhance what you need and that need must be what can repay it back even without interest

As I have stated many times in my previous comments, borrowing money isn't a very logical thing to do especially for trading in cryptocurrency markets because trading with borrowed money in such a volatile market causes the person to be more stressed and lose money more easily. As someone who has previously made a leveraged transaction by borrowing money, I would like to help you understand what kind of psychological effect this actually has by stating that I wake up every night and check the status of my positions.

On the other hand, I would like to remind you that leverage can be used to indirectly borrow money and make trades instead of trading with borrowed money. At least, if the leverage ratio is managed well, earning profits will be realized with less stress. Also, in this case the fact that the money that the person uses as main capital isn't a debt will be one of the factors that reduce stress.