Learn to use DEBT in a proper way to create asset

[boty]

Debts that exceeds your source of income is generally bad. Except for the sake of a defined investment with properly calculated risk management taking risk beyond once source of income can lead to not just debt but break down, emotional trauma, early death even lack of peace.

If one must take a loan that it above their income maybe for the sake of building a house or setting up an investment it is advised to go for long term loans and this loan's payback time should be calculated before taking them to ensure peace of mind and proper fund management

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.

[1714657679]

1714657679

[slapper]

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

[Qiubell5]

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.

[rat03gopoh]

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.

[DeathAngel]

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.

[zaim7413]

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.

[0t3p0t]

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.

[Peanutswar]

* 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.

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.

[kawetsriyanto]

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.

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.

[LogitechMouse]

~

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.

[Darker45]

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.

[bitzizzix]

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.

[pinggoki]

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.

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.

[Rockstarguy]

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.

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.

[BitcoinTurk]

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.

[Manny@11111]

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

[milewilda]

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

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.

[Mame89]

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.

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.

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.

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.

[AicecreaME]

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.

[Peanutswar]

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.

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.

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.