Taking loan during high inflation?

[nurilham]

Taking loan is always risk, but if you've got stable earning to pay the interest along with the capital even if the market isn't supportive then it is not a big risk. There are people who doesn't have big spending, and they are affordable to pay the loan premium from their salary or out of the business. For them taking loan to invest on cryptocurrency will be profiting, because they've got the time which will assure with profit/growth.

Although we have a stable earning (income) doesn't mean taking a loan will be a low risk, it is a wrong mindset. We won't pay the interest of the loan only, we must pay all the amount of our debt. As crypto investment is very risky, it is always a bad idea to invest with loan money. I am sure that no one wants to spend their stable income to pay for the investment debt, right? Crypto investment must use our own money, never think to borrow money.

[lienfaye]

But the question is what if you do not own enough money for investing? can you take a loan and invest?

Investing has risk, there's no guarantee of sure profit. Therefore its not recommended to take a loan just to invest since the outcome is uncertain. This is the reason why if we're going to invest, its advisable to use your own money. Its not necessary for it to be huge because any amount will do as long as its your spare money that you can live without.

If you take a loan, certainly it has interest and its a responsibility for you to pay. But its a problem if things wont go as planned in your investment.

[South Park]

Today I had a meeting with a friend of mine who teaches economics at university.
He believes when the inflation rate rises that's profitable to take a loan even with high interest to buy other assets such as gold, bitcoin, and even real estate. On one side of this theory, we usually suggest people never invest money that they can't afford to lose and don't invest the money that does not belong to them for many reasons. These are golden tips and useful in any market.
But the question is what if you do not own enough money for investing? can you take a loan and invest?
Because if you look deeply into charts of inflation rates in most the countries you can easily understand taking loans even with high interests could be useful and profitable.
Personally, I don't suggest doing this because using other people's money will put me under stress and this can have negative effects on my decisions. What do you think?

We have a name for that in the markets and it is called leverage, when you use leverage you are borrowing money to buy more of the asset that you want, the issue is that while the profits can increase the losses do so as well, basically whoever does something like this is increasing their exposure to the markets and the risk they are taking, and since most people do not know how to manage either then it is better to not do something as risky as this, since people can easily lose everything they have in a heartbeat if they are not careful.

[wiss19]

If I understand inflation, it is when the price of the goods are rising dramatically but I don't think the price of the assets are affected with it therefore spending your money on them can be very beneficial because when you invest you can expect a return but before you do this, you just want to make sure that you are done with your primary expense like buying food stocks, paying bills, and alike. What is good about loaning is that it is said you are immune to tax.

This is why people that already have a money still takes a loan. They aren't worried no matter what happens with their asset, even if it's dipping because they can still be able to pay the loan using the money on their pockets.

[Naficopa]

If I understand inflation, it is when the price of the goods are rising dramatically but I don't think the price of the assets are affected with it therefore spending your money on them can be very beneficial because when you invest you can expect a return but before you do this, you just want to make sure that you are done with your primary expense like buying food stocks, paying bills, and alike. What is good about loaning is that it is said you are immune to tax.

This is why people that already have a money still takes a loan. They aren't worried no matter what happens with their asset, even if it's dipping because they can still be able to pay the loan using the money on their pockets.

I believe no economics work when nature has other plan, last two years of COVID was a life changing experience.
I realise that no job, no assets nothing can save. you when nature is against you. I think it is good to invest and make some saving when your standard of life are inline. but on the other hand - One should always be prepared for worse.

[m2017]

Today I had a meeting with a friend of mine who teaches economics at university.
He believes when the inflation rate rises that's profitable to take a loan even with high interest to buy other assets such as gold, bitcoin, and even real estate. On one side of this theory, we usually suggest people never invest money that they can't afford to lose and don't invest the money that does not belong to them for many reasons. These are golden tips and useful in any market.
But the question is what if you do not own enough money for investing? can you take a loan and invest?
Because if you look deeply into charts of inflation rates in most the countries you can easily understand taking loans even with high interests could be useful and profitable.
Personally, I don't suggest doing this because using other people's money will put me under stress and this can have negative effects on my decisions. What do you think?

Has your friend ever used what he believes in? Has he already taken out a high-interest loan to buy assets such as gold, bitcoin or real estate? Before making recommendations, perhaps your friend should try to put his theory into practice for himself?

I admit the possibility that with the right use of this information, you can make a good profit, but personally I would not risk putting it into practice. Because the risks are very high: in any case, the loan will have to be repaid, but investing in gold, bitcoin or real estate in the current very unstable economic situation in the world is a big question. Will the profit from the investment be able to pay off the loan? Will there be anything left after this? A lot of uncertainty.

I am not saying that investing in gold is bad, bitcoin or real estate but I think that investing with borrowed money is bad because of the high risks and need to repay the loan.

[19Nov16]

When inflation is usually a lot of unexpected things, this makes us have to take loans from banks or financial services, this is certainly difficult to avoid, but the most important thing when we take loans is the ability to pay, do not use taking loans for consumption but use for things productive like business capital.

[Smack That Ace]

Investing is inherently risky, and it gets even riskier when you borrow money to invest in crypto, as cryptocurrencies are considered the most volatile investments. When you don't have enough money to invest then work hard at whatever job as long as it can help you earn enough money to invest rather than borrow. In a high inflation economy, what happens if your investment loses. If you have the calculation and have a plan to deal with the loss of business investment, you can borrow to invest.

[Mauser]

Taking out loans during periods of high inflation is a good idea on paper. If the loan interest rate is below the inflation rate than the loan will be less valuable in the future. But banks are usually aware of the economic outlook and will not give out loans with fixed rates for too long. It really comes down to what the loan details look like. The government also will increase interest rates to fight inflation, which should make loans more expensive again. The only option where taking out a loan seems like a good idea is if the interest is fixed for 5-10 years and the full amount can be repaid at the end. If there is need to refinance after the fixed interest period ended, the loan could become a lot more expensive. I would still advise against taking out loans to invest, there is always the risk of losing money and being heavily in debt.

[og kush420]

Taking out loans during periods of high inflation is a good idea on paper. If the loan interest rate is below the inflation rate than the loan will be less valuable in the future. But banks are usually aware of the economic outlook and will not give out loans with fixed rates for too long. It really comes down to what the loan details look like. The government also will increase interest rates to fight inflation, which should make loans more expensive again. The only option where taking out a loan seems like a good idea is if the interest is fixed for 5-10 years and the full amount can be repaid at the end. If there is need to refinance after the fixed interest period ended, the loan could become a lot more expensive. I would still advise against taking out loans to invest, there is always the risk of losing money and being heavily in debt.

I would suggest to take loan if there is any dire need. If you are stable and have good standards of living done indulge yourself in unnecessary  trouble.
There is so much paperwork that you might end up in trouble  for no reason.

[dunfida]

If I understand inflation, it is when the price of the goods are rising dramatically but I don't think the price of the assets are affected with it therefore spending your money on them can be very beneficial because when you invest you can expect a return but before you do this, you just want to make sure that you are done with your primary expense like buying food stocks, paying bills, and alike. What is good about loaning is that it is said you are immune to tax.

This is why people that already have a money still takes a loan. They aren't worried no matter what happens with their asset, even if it's dipping because they can still be able to pay the loan using the money on their pockets.

I believe no economics work when nature has other plan, last two years of COVID was a life changing experience.
I realise that no job, no assets nothing can save. you when nature is against you. I think it is good to invest and make some saving when your standard of life are inline. but on the other hand - One should always be prepared for worse.

Nothing could really save you if you dont really know on how to save up because you wouldnt really make yourself to survive nor even having that investment opportunity.Its really having that very hard situation

if you wont be finding way on how you should really be handling out yourself.Making or taking loan shouldnt really be your first choice but rather making it as your last resort if you are really that eager on taking risk.

Getting some loan is never been a good choice for you to do so but this is very situational i would say.

[Desmong]

Taking loan is not my thing and I dislike it slot. Loan can be very risky especially taking lone from bank or private sectors which has bigger consequences if the borrower is not able to pay the loan at the right time. I can meet my close friends to lend me money but I see no good reasons to go take a loan. Investing is very risky and we should be conscious when getting loan to run a new business that normally takes time to grow before one start making profits.

[justdimin]

the question is what if you do not own enough money for investing? can you take a loan and invest?
Because if you look deeply into charts of inflation rates in most the countries you can easily understand taking loans even with high interests could be useful and profitable.
Personally, I don't suggest doing this because using other people's money will put me under stress and this can have negative effects on my decisions. What do you think?

The only downside of the crypto part is that, if the price goes down, or even stays the same, you will not be able to repay it back on time. Because, you take out lets’ say 10k, and you have to pay 500 dollars for 2 years, which will be 12k when you pay it back 2 years later right? Well, that means first month if the price doesn't change you cash it out and have only 9.5k left, so instead of %10 increase meaning 1k profit, it will be 950 profit.

So, next month if nothing changes you pay another 500 bucks, and so forth and so forth, eventually becoming very little. Hence, you can't just assume you can pay the loan back with your crypto profits.

[Semar Mesem]

Be careful when we take a loan when inflation is high, this is very risky because it can make our debt increase drastically, but the good thing is to use debt for business capital or use it for investments that provide large profits such as cryptocurrencies.

[MiF]

Today I had a meeting with a friend of mine who teaches economics at university.
He believes when the inflation rate rises that's profitable to take a loan even with high interest to buy other assets such as gold, bitcoin, and even real estate. On one side of this theory, we usually suggest people never invest money that they can't afford to lose and don't invest the money that does not belong to them for many reasons. These are golden tips and useful in any market.
But the question is what if you do not own enough money for investing? can you take a loan and invest?
Because if you look deeply into charts of inflation rates in most the countries you can easily understand taking loans even with high interests could be useful and profitable.
Personally, I don't suggest doing this because using other people's money will put me under stress and this can have negative effects on my decisions. What do you think?

Big risk is equal to big profit, risk is always there it is normal for us to take the risk to earn a lot of profit, if we don't take the risk then we will remain the same with no progress at all. Sometimes taking risk is good it is better to try than nothing, i believe that the person who are now millionaire in crypto is also a risk taker before, investing, holding, trading, all of this has a risk just always DYOR and don't stop believing for good.

[dataispower]

Today I had a meeting with a friend of mine who teaches economics at university.
He believes when the inflation rate rises that's profitable to take a loan even with high interest to buy other assets such as gold, bitcoin, and even real estate. On one side of this theory, we usually suggest people never invest money that they can't afford to lose

In this forum i have seen many  people who is condemning to borrow and invest. But some times i avoid such statement act. Because when they will realize that to borrow is a support to some one who don't have helper to start up a business of it own. When their is inflation you can get many things cheap and unexpectedly because of many things will cut down the price. And after inflation all those properties you buy with low fees will rise and give you than what you used to buy some of the properties

[Vaculin]

Today I had a meeting with a friend of mine who teaches economics at university.
He believes when the inflation rate rises that's profitable to take a loan even with high interest to buy other assets such as gold, bitcoin, and even real estate. On one side of this theory, we usually suggest people never invest money that they can't afford to lose and don't invest the money that does not belong to them for many reasons. These are golden tips and useful in any market.
But the question is what if you do not own enough money for investing? can you take a loan and invest?
Because if you look deeply into charts of inflation rates in most the countries you can easily understand taking loans even with high interests could be useful and profitable.
Personally, I don't suggest doing this because using other people's money will put me under stress and this can have negative effects on my decisions. What do you think?

IMHO, taking loans for such a volatile investment do not guarantee fixed profits, the reason why we should always invest using our extra income. However, if you can manage the risks from doing it, then go, but if you want to avoid troubles in the future, then always invest on the amount you can afford to lose. The fact is, no matter how good an investment is, as long as you don't hold its future, then you can never be at peace thinking that you'll maybe lose in the end, although investment has always its own risks.

[paxmao]

In general terms he is right. Taking a loan during high inflation is beneficious for the debtor, as the capital is "worth less" as time passes. The important thing is to invest in something that has a return higher than the mortgage rate and that is the key of this strategy. Bitcoin is too volatile, gold works with inflation but only as long as interest rates do not hike, which will happen.

You need something more or less stable that has a physical base, perhaps Commodities, particularly metals.

[Shasha80]

Today I had a meeting with a friend of mine who teaches economics at university.
He believes when the inflation rate rises that's profitable to take a loan even with high interest to buy other assets such as gold, bitcoin, and even real estate. On one side of this theory, we usually suggest people never invest money that they can't afford to lose and don't invest the money that does not belong to them for many reasons. These are golden tips and useful in any market.
But the question is what if you do not own enough money for investing? can you take a loan and invest?
Because if you look deeply into charts of inflation rates in most the countries you can easily understand taking loans even with high interests could be useful and profitable.
Personally, I don't suggest doing this because using other people's money will put me under stress and this can have negative effects on my decisions. What do you think?

IMHO, taking loans for such a volatile investment do not guarantee fixed profits, the reason why we should always invest using our extra income. However, if you can manage the risks from doing it, then go, but if you want to avoid troubles in the future, then always invest on the amount you can afford to lose. The fact is, no matter how good an investment is, as long as you don't hold its future, then you can never be at peace thinking that you'll maybe lose in the end, although investment has always its own risks.

Based on my experience borrowing money from a bank to invest in Bitcoin in 2018 was one of the worst decisions of my life. I suffered
a huge loss at that time, as you said Bitcoin which has a volatile price can not provide a fixed profit for me to be able to pay my debt installments.
So I highly recommend that we only invest using the extra money we have, so we will not have a problem if the price of Bitcoin does not move
according to our expectations. At least we will not be stressed and burdened if the investment uses money that we can afford to lose. Moreover,
investing in Bitcoin has a very high risk, in my opinion, it is not a good choice to use borrowed money to invest in Bitcoin. I've learned a lot from
my bad experience investing in Bitcoin using borrowed money from banks, which I won't make the same mistake in the future.

[Kasabus]

I also don't suggest to do it and that's the actual risk if that's the strategy of other people. I knew wealthy people that have been borrowing money to buy another assets and this is a common style to them and that's making them more wealthy.
But in able for you to do it, you have to make sure that you'll be able to pay the loan + the interest of it and most wealthy people have a lot of sources of income and that's why they're free in doing it. And if you're just an average and minimum wager man, you'll hardly do it.

Borrowing money is only good if you don't rely on a single investment, and that you have lot of sources that generate an income other than crypto. That is why most wealthy investors are capable of this, to expand their investment because they have been doing profits already in their previous investments. Since the more an investor own a lot of investments, the quicker he will become financially stable and secured.