Topic: Learn to use DEBT in a proper way to create asset - page 8. (Read 1274 times)

In the topic I covered today, let's talk together about the idea of debt, why it is bad for the majority, and why it is used as a tool for the advancement of the few. If we observe people in debt, it's like your friend who borrows a cellphone, your neighbor who owes a motorcycle and vehicle, and the person you know who borrows to build their house. We can notice and see that most of them are not happy. Because instead of enjoying the money owed, it becomes a burden because it is automatically deducted from their wages at work. And this is often the reality of a person's life in debt.

Even so, using debt is not bad at any time. It is true that many people have become miserable because of debt, but if you are strategic and use it to build an asset, it can help you get rich or get out of life. And this is possible. In fact, all the successful entrepreneurs we know use debt to grow their businesses so they can maintain their lifestyle, and this is called leverage. Instead of using your own money to build assets, you will use other people's money as capital. Instead of waiting for a short period of time, you can start now with just your simple idea and the money of other people.

Let's discuss this matter, friends. If others don't already know, there are two types of debt. This is bad debt, and the second is good debt. And we know that this concept was explained by Robert Kiyosaki.

* Bad debt: This is what makes a person suffer, because it is the things that give us liabilities or the ones that decrease in value, such as gadgets and cars. And the common problem with these loans is that you will pay them with high interest.

* Good debt: this is the type of debt that will make a person rich. Or else you will also earn money because, instead of using it for your needs, you will use it to build an asset. Which, if you handle it properly, can give you extra income.

So that we can give more clarity to good debt, I will give an example: You want to build your own business; you have a product, a business plan, and a marketing strategy. But the problem is that you lack capital. And the amount you need is $1,000. So what you did was share this idea with friends who you think have the potential to become investors. You explained it well, presented it well, and they liked it and were willing to invest. And you convinced your friend to borrow money, and you will pay him back in two years with interest. Then you started your business immediately; people liked it, and it became profitable immediately in the first year. It gives you constant income, and it continues to grow.

After two years, you have paid your friend. And your business just keeps growing. And it all started with an idea. Your idea is to build a business, and you use other people's resources as a tool to build your own assets. But it's an important reminder that you also need to be doubly careful when using debt. Although this is a good tool, you must work yourself out to handle it properly.

what I means you must know how to handle money. Must have skills, such as COMMUNICATION, LEADERSHIP, NEGOTIATION, SELLING and INTRAPERSONAL. Because if you borrow money and use it in your business, it doesn't mean that everything will be okay immediately and your business will grow automatically. It's just that not every time the weather agrees with what you want to happen in your life.

If you want to take out a loan at the very beginning of your activity and do not yet know what you can earn, this is a very dubious decision that can cause you a lot of problems. But if you take out a loan for a business that brings a stable profit and you can understand how much profit you will get and this will be enough to pay off the loan payments, then there is nothing wrong with this and can well be used for development. A loan can accelerate the growth of your business if you manage it skillfully.

i have experienced it when we think debt is a way out but in reality it is a trap that makes your money run low, i always think that debt to start a business is quite scary, especially since we don't know what will happen to our business.  maybe we won't get a buyer, let's be wise in managing our finances, don't let debt be a way out, it's better for you to have only $1000 in assets but no debt than to have $10k but your debts are piling up out there.

So that we can give more clarity to good debt, I will give an example: You want to build your own business; you have a product, a business plan, and a marketing strategy. But the problem is that you lack capital. And the amount you need is $1,000. So what you did was share this idea with friends who you think have the potential to become investors. You explained it well, presented it well, and they liked it and were willing to invest. And you convinced your friend to borrow money, and you will pay him back in two years with interest. Then you started your business immediately; people liked it, and it became profitable immediately in the first year. It gives you constant income, and it continues to grow.

Money is needed to achieve something financially. Finding the money does not mean that everything will be solved immediately. Some of us have capital but have no idea how to evaluate this capital. Some of us have an idea but do not have the capital necessary to realize this idea. Both of them have some shortcomings, and they can reach their goals after these shortcomings are completed.

So, if we do not have money to achieve our goal, how should we determine the moves we will make with borrowed money? I think that's the real problem. So, you may lose your own money, but losing money you borrowed may have a worse outcome. For this, we have to learn to use money correctly. Because we may not always have the chance to make mistakes. For this, we must research well, plan well and implement it. In order to establish a successful business or to invest money successfully, it is important how you manage this asset rather than whether the capital belongs to you or is a debt.

I also know Kiyosaki's work well and in these types of threads I always repeat the same thing: using (good) debt to create wealth only works for a small percentage of intelligent, self-controlled people. For the vast majority of the population, if you want to improve your economic situation you have to avoid debt, especially consumer debt (taking a mortgage to buy your house is OK) and save and invest. That's all there is to it.

I also know Kiyosaki's work well and in these types of threads I always repeat the same thing: using (good) debt to create wealth only works for a small percentage of intelligent, self-controlled people. For the vast majority of the population, if you want to improve your economic situation you have to avoid debt, especially consumer debt (taking a mortgage to buy your house is OK) and save and invest. That's all there is to it.

what I means you must know how to handle money. Must have skills, such as COMMUNICATION, LEADERSHIP, NEGOTIATION, SELLING and INTRAPERSONAL. Because if you borrow money and use it in your business, it doesn't mean that everything will be okay immediately and your business will grow automatically. It's just that not every time the weather agrees with what you want to happen in your life.

In the topic I covered today, let's talk together about the idea of debt, why it is bad for the majority, and why it is used as a tool for the advancement of the few. If we observe people in debt, it's like your friend who borrows a cellphone, your neighbor who owes a motorcycle and vehicle, and the person you know who borrows to build their house. We can notice and see that most of them are not happy. Because instead of enjoying the money owed, it becomes a burden because it is automatically deducted from their wages at work. And this is often the reality of a person's life in debt.

* Bad debt: This is what makes a person suffer, because it is the things that give us liabilities or the ones that decrease in value, such as gadgets and cars. And the common problem with these loans is that you will pay them with high interest.

* Good debt: this is the type of debt that will make a person rich. Or else you will also earn money because, instead of using it for your needs, you will use it to build an asset. Which, if you handle it properly, can give you extra income.

Debt is not something good in a general perspective do let's not make it appears as if one is bad and the other is good, most people that have been into debt have always lamented of why they took the decision at the first place, we don't seems to understand the comfort we have without being in debt like when we out ourselves in debt, many use to struggle before they can make the repayment of their debt back to their creditors, because it's never easy to pay back debt except by grace.

Having good debts are easy to establish when you have actual assets that the banks will see for you to use it as a collateral. But if you're starting from zero, it's not advisable to take loans and that's why even if the sole purpose is going to be for business or investments. You shouldn't do it.
Don't rush into the scene just because you see people telling that it's okay to have a good debt because it is for business, investment or buying an asset. Remember that there's an interest that you need to make, so you need to establish yourself first before making a good debt.

In the topic I covered today, let's talk together about the idea of debt, why it is bad for the majority, and why it is used as a tool for the advancement of the few. If we observe people in debt, it's like your friend who borrows a cellphone, your neighbor who owes a motorcycle and vehicle, and the person you know who borrows to build their house. We can notice and see that most of them are not happy. Because instead of enjoying the money owed, it becomes a burden because it is automatically deducted from their wages at work. And this is often the reality of a person's life in debt.