Topic: Learn to use DEBT in a proper way to create asset - page 7. (Read 1274 times)

Their are good purpose of taking a loan but some people take it for the wrong purpose just to enjoy themselves on things that won't be of any benefit to them. Loans can be taking to establish good business which can generate money in which the debt can be paid back.

 Some people took loan in their place of work to build house which is been deducted from their allowance, this is something that is not easy but it is better to go through hard times in collecting loan to solve important problems that will bring good benefits than to waste it on things that will count to nothing. Some privates companies do take loans from banks to improve the productivity of the company and the still make back good money as profits for themselves.

Totally agree, depending on how and why you wanted that item that you've bought using that borrowed money or bank loan is going to decide if you've put it to a good use. I guess the reason why it's justifiable to conclude that it's a bad decision is because you could've used that money for other reasons like paying the down payment for a house. I disagree that it's a bad loan if you use it for car payments, the money that you'll save from commute and the hassles of commute is well worth the debt you're incurring not to mention that you can use it to apply for Uber or other taxi service app in your country.

Doing business with loans is very risky and must be planned carefully, unless you have savings or perhaps valuable assets such as a house or vehicle and then you take out a loan because you lack capital, in my opinion there is no problem. Because you have a guarantee to pay it if a problem occurs in your business, and the risk is that you lose what is very valuable that you have with full consideration and careful thought beforehand, and you have to be prepared for that.
And my advice, the most correct way is to start a business according to our abilities, and you can start it on a small scale which requires very minimal capital with your own capital. And this business will be big if you do well overall, and you can also look for sponsors if your business runs smoothly and grows, and that way you can share the profits with the sponsors you work with. And I think this is a good way, slowly but surely, the most important thing is that you master your business well.

I guess debts are basically categorized according to whether it is put to good use or not. In which case, it is unfair to immediately conclude that borrowing money to buy gadgets is bad. Why buy those gadgets? Is it simply because you don't want to be left out among your friends in terms of the latest? Is it because it is convenient for you to watch shows anytime and anywhere you like? Or is it because you can actually find side jobs with those?

It's not necessarily about whether it increases or decreases in value. Cars, smart phones, laptops, and the like decrease in value over time, but it doesn't mean they aren't worth borrowing for.

Based on this example, it's good that the business grew in the first year already.
The bad side though is that this isn't happening to most of the start-up business, and in fact, most of them are already quitting, or stopping their business in the first year alone. I will not give some numbers, but the majority of the start-ups end up a failure in the first 3 years, and there are many reasons for that.

This type of real-life situation works only if you become successful in the first year of your business. The problem is what if it doesn't? I'm not a business owner, and I'm not a business-minded type of person, but I always don't want to use debt for a start-up business. I mean why not just save money right? Why not just plan on it in advance, and save money for it? If you want to start a business 3 years from now then start saving now. In that way, you will not be in a situation where you lost your money building that business, and failed, and at the same time, you will pay the money that you borrowed. It's hard if that happens to you.

Who are the ones who will be successful by doing this? Salesmen because they know how to sell their product. Look at those successful businessmen today like Robert Kiyosaki (mentioned by many here), and Mark Cuban as well. They can get debt from banks and then grow it because they're experts in that field already. As a beginner, it's hard to go straight up and borrow money from other people for a business. It would be better to just save money for it, and then use that money in your business. This is only my opinion though.

Sure. Ideally, building our business is better to use our own money although it is a small business. We won't be burdened with debt, we can develop our business any time we have extra money. We also won't feel so stressed if the business can't grow as expectedly. Since it is our money, we won't have the responsibility to pay a certain amount of money to other people at a certain time. In this way, we can run our business in a more comfortable way and we don't hurry to expect gaining certain profits.

It is different when we used loan money for building our business, we need to set a target to get a certain amount of money from the business at a certain time. It is because we need to pay the loan money, we must gain profits from the business as planned. If everything happens out of the plan, we may get a trouble because the people/banks who give the loan money probably won't accept any reason to delay the refunds. So, we have a pressure to run the business in this way. However, sometimes with loan money, we can develop the business quickly because we have bigger funds.

People things having debt is a bad thing but they don't know this is the reason why most of rich people are using their debts to create more and more money, its all about of proper handling of debts, rich people seeking debt to increase the number of the asset they have for example buy a land for additional investment could be an apartment, or mall to earn more money they focus in the investment that could bring them a good amount of profit while they are sleeping and not just spending those for their casual use, they will but after they paid all of their debts again make profit.
Debts will only bad for the people who keep spending with the things there's no value or profitable items.

Everytime I hear this I will always remember Robert Kiyosaki with his Rich Dad Poor Dad channel on YouTube that is why I am a bit familiar to it. I think this will only work with rich people because banks I think don't lend money to poor as most poor people don't have access to banks. Rich or middle class  people has the ability to repay debts while poor people don't. In third world countries like mine it is too easy to get a small amount of loan but interests will surely kill you before you are able to invest on something that sometimes ends up a trial and error business or investment.

As long as there is a sense of responsibility, debt will be managed well. The burden of debt is indeed heavy, especially when borrowing is attached to the requirement that you have to pay interest of a certain percentage of the amount borrowed. But as long as the loan is managed well, such as building a business or using the loan to make money, the proceeds can be paid in installments to pay off the loan.

Most people who dare to take action or are ready to take risks will find it easier to recover economically than people who are afraid to try to do something using borrowed money. There are things that need to be considered as a sense of responsibility so that the loan is managed well. As long as it is within the norms of the position, debt cannot be considered a hanging rope that can ensnare the person in debt.

Good debt can of course be a valuable tool if managed wisely. You can leverage borrowed funds for investments that have the potential to generate returns higher than the cost of borrowing. Both individuals & businesses can take advantage of good debt. You can use a mortgage to purchase a property which will lead to long term appreciation & rental income. Borrowing to finance education or skills development can enhance earning potential & career prospects. Good debt can be used to start or expand a business, invest in assets or fund strategic projects. Obviously it’s important to carefully assess the risks & ensure that the investment or asset generates enough returns to cover the debt obligations. Proper financial planning, budgeting & risk management is crucial to harness the benefits of good debt & avoid excessive debt burdens.

How many new businesspeople think of debt as a path to greater opportunity? IInstead they think it is the ultimate solution to their financial collapse. Well, because of the old paradigm that debt is the beginning of disaster, they will avoid it as much as possible while they can build a business with existing capital, or not start a business at all rather than taking on debt.

Even so, building a business using capital through loan proceeds carries huge risks. So I personally still won't borrow money to build a business. But it's better to build a business with your own money. Even if the scale of the business is smaller, I will definitely have peace of mind. Because I don't have any burdens or debts to think about. So innovation will definitely run more smoothly. Because starting a business doesn't need to be big right away, but starting a business must be in accordance with our abilities.

You're right - bad debt with depreciating assets is a trap. Many fall into this quicksand of instant satisfaction. Good debt goes beyond commercial faith. Calculated risk, smart move. Successful entrepreneurs focus on turning debt into asset production, not merely leveraging it. This goes beyond having a company plan or marketing strategy; it requires vision and agility to pivot when needed

In this war, communication, leadership, and negotiation are essential. It takes more than having a vision to communicate it to investors, lead a team to achieve it, and negotiate the best terms for your enterprise. Few can balance on a tightrope. Let's face it: debt leverage has risks. Responsible, accountable, and astute enough to turn debt into a sustainable, lucrative endeavor is more than just using other people's money. We must realize that debt can be a stepping stone but also a stumbling block if not handled carefully

By having a loan that exceeds our income, of course it will create financial problems that we have and this will also make us unable to pay off the loan, even those who want to advance their business must think carefully before deciding to take the loan because if do not think carefully and continue to take loans and the business they are running cannot run well, of course the business they are running will experience problems if they cannot pay off the loan.

When taking a loan, it would be better for us to take it for the purposes of developing the assets we have because if we only take a loan for temporary pleasure, of course this will make it very difficult for us to pay the loan we have.

It's true like that, there will be interest on the loan you make, not to mention other problems that will come. But if someone wants to start a business with insufficient funding, it is likely that they will borrow money, even though there will be interest later, this is not an obstacle to not running the business they want to run. Borrowing money to start a business is very risky, because just running a business will definitely have its own risks, especially if you add a loan, of course the risk will increase. On the other hand, they can borrow from friends or look for investors, where there is no interest, but maybe they should share the profits from the business. but the possibility of borrowing from friends is very difficult, isn't it? It's not like borrowing from a bank where there is a high probability that you will be successful in getting a loan. In my opinion, even if there is interest, if you are sure that the business you are running will produce results, there is no harm in doing it. Daring to take risky actions is not recommended and some people also don't dare to take risks,  but I myself am brave enough to take this action, as long as I am sure that the business I am running will produce clear profits and by managing everything well so that it runs smoothly. This is true with problems that cannot be predicted, especially with financial problems that are impossible to predict, but we can do our best to avoid or minimize the chance that problems will occur.

There are many points of view that judge loans are bad things also related to interest, but on the other hand to be able to run the business you want maybe this is one way, in my opinion even though there are many views that judge it bad it should not be a problem, it is better for us to focus on what will be done so that it can generate its own benefits, also if it has generated clear profits we will be able to pay off the debt and interest, because banks also want profit so it is natural that they hold certain interest in a number of loans that are done. The rest of the choice is up to us, where we must dare to take risks or not, because I myself cannot expect help from others to start a business so I dare to take this risk and I have done it, and the good thing is that I can run everything well as well as pay off the debts that I have from the loan that I initially made.

I don't think taking a debt falls on the good side of it because if we analyze it deeply, debts have growing interest that will definitely put us buried if we can't pay it on time due to some other unpredicted financial problems that will suddenly arise. Debts will only serve as a distraction for us no matter how we say and try to convince ourselves that we also benefit from it in times where we are empty handed.

If you consider this mindset that it's okay to have some debts because it will also serve it's purpose at some point, but knowing you have to pay it back with additional interest, that thing is always bad on my own perspective.

If you are planning on building a business via loan money then it would really be that imposing that kind of risks which it is of course normal but you would really be needing to take up that risks if you are really that serious on trying out on achieving something specially on becoming that successful because if you wont then you would really be just that remaining still on the condition or status you are now when it comes to financial state or condition but it is true that it would be ideal that you should really be only taking up some loan when you do have plans on business expansion on which i could say that it would be less risky comparing when you are really having that start up but well its up to your choice if you would be having that kind of approach on things and if you could be able to take up the risks.
Just like on what majority been saying on here is that when taking up a DEBT then be sure that you are really that making use of it into something that would generate income
because if you dont have that enough source of income then you would really be able to hardly be able to pay up that loan and this is something you should be avoiding in the first place.

This is what I wrote about above, you can use credit money if you have a business that is already working and brings the expected income, otherwise it will be too big a risk. But even in this case, I would not take credit money, because I don’t like being in debt to someone. Without borrowed money, it may take longer, but you also eliminate the case when you can lose the loan money and be forced to pay back an even larger amount.

If you are taking up some loan just for the sake of buying up something which doesnt generate income then you're simply fucked up and just like on what you have said that if it goes beyond on the money that we are earning or simply with income. Then how you would really be able to repay those things on time? You are really just that basically making yourself that getting buried with debt.
Actually i did have experienced out such condition whereas tons of loans and debts had been piled up on which it did really comes into a point that im already that not able to repay those things on time
and those banks and lending firms do really tell me and having those legal actions against me because i havent been able to paid up.

Good thing that i was able to resolve out those problems even though it isnt really that simple because paying up loans which is really that more than on what you do earn
would really be tough as hell but since you are the ones who are making this then you wont really be having no choice. I do really be able to experience panic anxiety
because if banks would really be coming into a point on which you would really be that needing to face some legal actions then this is where things
will really that too damn hard to get out.

One thing my dad warned me against growing up is never to take loans. He was a man who was knee-deep in debt for a good portion of his working life so he knew how bad it was because most of his salary went to pay off loans every month.
Not like my crackhead took his advice but I learned on time and I learned the hard way.

I have always been of the school of thought that debt should only be taken for an investment. Where I'm from you see people take loans for consumption. Loans for weddings, funerals all other things. I'm 100%  against that. I believe when you take a loan, the payment of that loan should come from the proceeds of the loan. So when you take a loan to buy a car that won't be used as a source of income, where is the money to pay back the loan come from?

Taking a loan for an investment doesn't mean nothing can wrong. Of course, businesses and investments can fail, but it's better to be in debt to try to get a better life than to be in debt because of an insignificant thing.
Because of my personal history with debt, I try to stay away from it. Good or bad, borrowing money is not always my go-to option.