Learn to use DEBT in a proper way to create asset

[CryptopreneurBrainboss]

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.

Immediately I saw the title of your thread, I knew you'll mention Robert Kiyosaki, I'm a big fan of his content especially when it comes to debt, assets and liability. The reason many people are advices to avoid debts is because many people don't have the attributes that entrepreneurs have to use other people money effectively or would I say using debts very well. If the average person gets into debts they can't come out of it because they use debts to buy liability either knowingly or unknowingly. People use debts to buy houss,(which are liability but people think they're assets but this is a topic for another day. Note I'm referring to personal homes and not rental houses).

Since people don't have the ability to use debts for good, it's better they get avoided. If all the active users of the forum were put into debts, many won't be able to get out of it so instead of leaning how to use it, avoid it. You can make it without debts as that's not a path for everybody to follow. Those who know how to do it are allowed to do and if you want to learn then you need external guidance and not just by reading on the forum because it's a very risky thing to do. It's this same debts that has taken alot of entrepreneur of business.

An example is SBF of FTX that tried to use customers funds (others money, AKA Good debts) but couldn't use it effectively or used it wrongly and got caught slacking that his company and reputation is paying for that. Knowing how to use debts to your advantage is a good attributes to an entrepreneur and puts you ahead of others so it's something worth learning but also not for everyone.

[batang_bitcoin]

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.

[Poker Player]

Yeah, I heard this from Robert himself and I will say that it's very controversial, what works for him might not work for everyone.

Since people don't have the ability to use debts for good, it's better they get avoided.

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.

[Plaguedeath]

To clear the doubt, let me ask you something.
 
Have you take a loan from your friends or banks? how much you take it? is your business successful? if you answer "NO", then I don't see it's a good reason to create a business using borrowed money.

I can say something similar, buy shitcoins instead of Bitcoin, you have a chance to get rich overnight than invest in Bitcoin.

[traderethereum]

To clear the doubt, let me ask you something.
 
Have you take a loan from your friends or banks? how much you take it? is your business successful? if you answer "NO", then I don't see it's a good reason to create a business using borrowed money.

I can say something similar, buy shitcoins instead of Bitcoin, you have a chance to get rich overnight than invest in Bitcoin.

Most people don't know whether their business is successful or not because it depends on how seriously they take their business. Many of them borrow money because they "feel confident" that their business can be successful. But after they run it, they know it's not easy and many of them give up and ultimately, they can't pay back the loan money.
If they can run their business well, it will be successful, but it will depend on how hard they are willing to work.
There is nothing wrong with being in debt as long as someone can repay the debt. If he can't pay it back or is in doubt, he shouldn't borrow money from anyone.

[icalical]

To clear the doubt, let me ask you something.
 
Have you take a loan from your friends or banks? how much you take it? is your business successful? if you answer "NO", then I don't see it's a good reason to create a business using borrowed money.

I can say something similar, buy shitcoins instead of Bitcoin, you have a chance to get rich overnight than invest in Bitcoin.

That's true, I think borrowing money to create or start a business is bad, because most business doesn't make much profit early, and with the debt chasing it's very hard to expand it. The better way to start business would be using our own money or find some investors. I didn't say that there is no good debt, I think we should only borrow money when our business is settle, established and ready to do a big expand, when we reach that level of business borrowing money will be a good thing, our business already generate profit and we can calculate based on data on how much we can borrow money based on our monthly profit that, so that the monthly payment for our debt is not hinder the development of our business

[kentrolla]

Yes I think we shouldn't be taking debt for our personal leisure or product which depreciates with time which is the mistake people make but it's equally risky when you borrow it for business but it gives a possibility of giving profit which could cover the interest charges. I personally don't think these loans or credits are good because it pushes people at the brink of poverty with penalties and late payment fee, etc.

One should never fall in debt for products like car, expensive mobiles and all. Because only few are able to manage it wisely as I have seen people using two credit cards and keep rotating the amount between two.

[tabas]

To clear the doubt, let me ask you something.
 
Have you take a loan from your friends or banks? how much you take it? is your business successful? if you answer "NO", then I don't see it's a good reason to create a business using borrowed money.

It's never been good to start your actual business with borrowed money. You're in an experimental mode when you start and most of the startups end up failing and that's why it's not a good idea to start it with a loan. People who have been into the business will say the same thing and that's why someone who's pulling off a business needs to have their own money so, if it ever fails, you'll have no obligation to pay that will be suck you up together with the failed start up.

Yes I think we shouldn't be taking debt for our personal leisure or product which depreciates with time which is the mistake people make but it's equally risky when you borrow it for business but it gives a possibility of giving profit which could cover the interest charges. I personally don't think these loans or credits are good because it pushes people at the brink of poverty with penalties and late payment fee, etc.

One should never fall in debt for products like car, expensive mobiles and all. Because only few are able to manage it wisely as I have seen people using two credit cards and keep rotating the amount between two.

Thanks to the modern time today, many does take loan with the fancy things that they can have. It's all about the validation that they're taking from people. Expensive phones, cars, etc, but lack in assets and investments that will generate them more money. These possessions that people are wanting to have have a quick depreciation.

[angrybirdy]

Yes I think we shouldn't be taking debt for our personal leisure or product which depreciates with time which is the mistake people make but it's equally risky when you borrow it for business but it gives a possibility of giving profit which could cover the interest charges. I personally don't think these loans or credits are good because it pushes people at the brink of poverty with penalties and late payment fee, etc.

One should never fall in debt for products like car, expensive mobiles and all. Because only few are able to manage it wisely as I have seen people using two credit cards and keep rotating the amount between two.

In my own opinion, one thing that I consider as good debt is purchasing property, as we know that land appreciates the price from time to time which is a good investment and business too, because you can let other people rent to your house, in that way you can acquire profit which help you to pay your debt or if you have no plans to put it for rent,  You can sell it at the higher price and you were be able to pay your debt while having large profit

[hugeblack]

If you do not have a quick return and assets that cover the costs of the debt, it is better not to borrow, otherwise you will put yourself in options that may be bad, and thus this is like shooting at your projects and dreams.
Regardless of things, the philosophy of getting money from money through lending leads to a decrease in the value of money. Therefore, banks and governments must encourage investors to make money from projects such as agriculture, industry, or services, more than borrowing.

[gunhell16]

To clear the doubt, let me ask you something.
 
Have you take a loan from your friends or banks? how much you take it? is your business successful? if you answer "NO", then I don't see it's a good reason to create a business using borrowed money.

I can say something similar, buy shitcoins instead of Bitcoin, you have a chance to get rich overnight than invest in Bitcoin.

You know, like I said, it depends on the person who will handle the money owed. In my experience, yes, I borrowed money, but not from a friend of mine here or from any bank. But I borrowed money here on the forum from @shasan worth $200, and even my interest is fine and payable in 2 months.

The 50 dollars I invested here in our area, which is a type of microbusiness that can be considered a small barbecue business, and the 150 dollars I bought potential crypto assets here in the field where we stayed most of the time. The first month I borrowed the loan was the 150$ I played in trading, and in the first month when I carried out trading activity in 5 variety crypto, I made a profit of 170$ in 1 month aside from 150$. In addition to the Barbecue business, I also made money from that, and until now it still exists. I paid off the money I borrowed from @Shasan, so thanks to him, my profit continues even in my crypto trading, which has produced other crypto assets.

[hyudien]

This is a way to use money correctly and ideally, back to the reality where borrowing money is generally to cover life's needs.  I'm talking on a lower middle class scale and  that's definitely what's happening. There will be no option to expand the business and so on because debt for them is a way to take the opportunity to cover deficiencies  with the burden they will bear in the future.

Meanwhile for business people of course developing their business by taking on debt, there must be a separate guarantee that is commensurate right? do not necessarily borrow large amounts if there is no similar collateral. Therefore business people can take advantage  of loans in a profitable direction. The conditions above and the debt conditions in the second point  have different purposes. So we are still at the first point where debt is only to cover unmet needs.

Where do you place yourself from 2 position above?

[NeilLostBitCoin]

If I were to start a business, I would prioritize saving money instead of taking on debt. Using debt can be risky and add to overall problems since it will accumulate interest in the long run. It's okay to take a loan for your business if you are confident that you can repay it quickly. Having financial stability and a safety net before starting a business is always a good idea. Taking out loans may seem easy at first, but it can become a risky gamble. It is always better to save money and use it to invest in your business rather than borrowing from others.

[bestcoins1]

If I were to start a business, I would prioritize saving money instead of taking on debt. Using debt can be risky and add to overall problems since it will accumulate interest in the long run. It's okay to take a loan for your business if you are confident that you can repay it quickly. Having financial stability and a safety net before starting a business is always a good idea. Taking out loans may seem easy at first, but it can become a risky gamble. It is always better to save money and use it to invest in your business rather than borrowing from others.

The advice you say is not wrong if it is used by everyone who wants to build any business in their own environment, because having initial capital to build a business from scratch is always much better than making a loan in any form to start a business. Because the level of risk that a business owner must bear will be very different between using his own capital and using borrowed money from other people, so the main choice remains his own capital, no matter how small. Because capital from other people must be repaid within the time specified by the borrower himself.

[mindrust]

What you said is true OP. The book "Rich Dad Poor Dad" explains it very well too. Read it if you haven't yet. People often think that taking a loan is a bad idea but it is not always like that. Money, just like any asset, has a price. The price is the interest rate. The lower the rates are, the cheaper the money is. The first and most important rule of making a successful trade is "buy low sell high". So if you can buy money for cheap, then go for it. You can spend this money on silly stuff too if that's your thing but if you are an investor, a businessman, then you will spend that money on assets and that will grow your financial empire exponentially.

[Gozie51]

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.

So which is better? To borrow and buy a cellphone, motorcycle or to use it to build a house. Obviously taking a loan should be properly be invested so that you can get that interest accrued to the loan from the investment even before majority. Therefore, to build a house with debt or borrowed money is far better and above the listed. If you build a house, you are sure to recoup your investment within a stipulated time frame as you can thereafter mortgage it or lease some apartment from time to time.

Bearing a debt can be seen as something bad if you use the money for recurrent expenditure and not capital projects. For example most wealthy men live on debt but they invest it so that it keeps generating additional income, they take loan from banks and invest it and also service the interest from the investment.

Loan is the reason that the rich keeps getting richer. The rich knows how to invest with loan and they service the interest from profit in their invested business.

[itorai]

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.

I admit that it is true that a business that starts from zero and immediately creates current debt will make us trapped, because all businesses, even though they have been running for a long time, in reality income cannot be predicted accurately moreover, new businesses that start from scratch will usually have mental difficulties. Keep in mind that there will definitely be interest every month even if the business is not running smoothly.

[safar1980]

I think that banks do not give loans to commercial organizations for business easily. Typically, bugs check the organization's credit history, its basic financial indicators and require guarantors or collateral. But banks issue main loans to increase working capital.
But borrowing money for an idea from a bank or a friend is very difficult. If my friend gives me a loan, it will only be on the condition that he will own a share in the business.

[Aanuoluwatofunmi]

It's not everybody that knows how to make use of debt to make wealth and accumulate assets from it, instead, some will make it turns a havoc on them because they don't understand how to make reconciliation of debt and it's management for a profitable interest of what they intended it for, if we don't have another means to backup taking any debt, then we shouldn't start what we may not finish.

[bbigtart]

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.

Debt is not always bad as long as we borrow responsibly, meaning productive debt, not consumptive debt. For many rich people, productive debt is one way that financial planners call it, because it can be done to increase assets. Provided that the debt taken is not used for consumer purposes, but is used to purchase a second property as another source of income, business investment to purchase capital goods and debt for working capital.

whatever it is, the point is to be smart at seeing opportunities. Get into debt first to be productive, the opportunity is very big. For example, debt for buying property but renting it out, debt for business investment and debt for working capital.