Learn to use DEBT in a proper way to create asset

[bounceback]

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.

In the reality of life we face two kinds with debt between consumptive debt or productive debt, I will give little describe difference between two type of debt because many people get their self take much debt benefit for consumptive debt only but not use debt how to make ut more productive and increasing with their earning. Good debt or productive debt using for building business and earn profitable later and its area for businessmen keep get loan or borrowing money for building up their business.
Some people have bad life style and push their them get borrowing for consumptive debt use their lifestyle only and will face difficult later how to pay loan interested. Be smart when getting loan as bad or good debt if you want use loan for build up your business its not problem with productive debt.

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[jaberwock]

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. And I will agree that this is just like gambler per se, wherein you borrow some money from your friends and go on put a business or buy a house as a investment and wait for a couple of years to make money.

But still though, how can you pay it back when you are just starting your business? For sure once you borrowed that money, you have to pay it back the soonest as it will accrued big interest overtime. So it's a big risk in my opinion.

Collecting loans for business is more advisable than collecting loans for liabilities like car, phones etc.
Business is not certain, it can be profitable and at the same time it can lead to loss, but before you think about getting a loan for business you must have made some research and inquiries about the business and be very sure of it, so you will know every detail about it, and once you know every detail about a business, it will be very hard for that business to collapse, the reason why most businesses collapse is because of bad management of the business or inconsistencies around the business.

Collecting loans huh? I think that sounds a lot of loans hehe. And it seems gonna be a little difficult for us to pay them all. I read it somewhere that a car, phone, and the likes, can also be called as an asset or investment. I can agree with that if we only have one. If the previous that we have got destroyed and completely unusable, we will need to have another again. Those things can aid us from transporting, making a transaction, etc.

Yes. To have a plan is important before starting something. But we should keep in mind that there is still a high chance for us to fail despite of it. Apart from the reasons that you said, to not have a luck is also responsible for it.

[Parklane777]

Don't take anything for Granted.
If something been working well before it doesn't mean you can be sure for the same it will work further.
The mindset of taking the DEBT...to buy to rent it's a bet If all goes well but what If not ??

[so98nn]

Looks good and I agree on the bad debt and good debt. In short if I am purchasing a commercial space by taking the loans then that is one sort of debt for me. However, it depends on its usage whether it is gonna be my good debt or bad debt. For example, if I go further and rent it to some bank or company then it is going to pay me rent. This could either pay up half of my loan, or may be full EMIs. Now this is not my liability anymore as it is getting paid off by the third party. I would end up saving my wagers plus I will be building a property for myself. In addition to all, as real investment this will keep growing with the time as appreciation cost. So yeah, I believe the theory that is stated in the OP is something we can live and concur.

[kingvirtus09]

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.

In the reality of life we face two kinds with debt between consumptive debt or productive debt, I will give little describe difference between two type of debt because many people get their self take much debt benefit for consumptive debt only but not use debt how to make ut more productive and increasing with their earning. Good debt or productive debt using for building business and earn profitable later and its area for businessmen keep get loan or borrowing money for building up their business.
Some people have bad life style and push their them get borrowing for consumptive debt use their lifestyle only and will face difficult later how to pay loan interested. Be smart when getting loan as bad or good debt if you want use loan for build up your business its not problem with productive debt.

That means what Op said about good and bad debt is correct. Generally speaking, debt is not bad. It only gets worse the more the borrower uses it. Which is that if it is used correctly, the result will be good in the end, that's for sure.

So what you said is also correct, and I don't contradict it either, and that's really the point of what we're talking about in this section that Op actually did.

[barisbilgili]

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.

Using borrowed funds for trading can significantly amplify the emotional and psychological stress, especially in such a volatile market. The added pressure of managing leveraged positions can indeed lead to heightened anxiety and sleepless nights. It's important to prioritize mental well-being and financial stability when engaging in trading, and to carefully consider the risks associated with leveraging. Understanding the psychological impact of leveraging is crucial for making informed decisions and maintaining a healthy approach to trading.

It is indeed not an easy thing to be able to trade using borrowed funds because we don't know for sure whether we can make a profit in trading and if we experience losses in trading of course we have to find a way to pay off the debt when we can't pay it off of course we have was in trouble and had to take out another loan to be able to pay it off.

Of course, it is very important to be able to trade with a good mental condition and also have sufficient funds to trade, because if our mental condition is not good, of course we can make the right decisions in trading.

[DabsPoorVersion]

Looks good and I agree on the bad debt and good debt. In short if I am purchasing a commercial space by taking the loans then that is one sort of debt for me. However, it depends on its usage whether it is gonna be my good debt or bad debt. For example, if I go further and rent it to some bank or company then it is going to pay me rent. This could either pay up half of my loan, or may be full EMIs. Now this is not my liability anymore as it is getting paid off by the third party. I would end up saving my wagers plus I will be building a property for myself. In addition to all, as real investment this will keep growing with the time as appreciation cost. So yeah, I believe the theory that is stated in the OP is something we can live and concur.

What you have stated is a sample of a good debt. Investors of real estate are using this method to use their property to make money. Having a loan in the bank to use for real estate and looking for someone to rent the property. The money they can get from the rent will be the one to use to pay the loan.

Unlike those people who take a loan to buy new cars, motorcycles, or any stuff that they don't even need in life. They take a loan to buy something they can show off which we can consider as a liability.

It's all about how you use your debt. People need to understand that debt can be beneficial if used properly.

[HajiBagi]

borrowing capital to open a business or business makes sense, because there are people who have an idea for a business but don't have enough money to start it, they can take out a loan to run it, but as long as they run it well and it must produce results, because a business basically has to produce its own profits. and people who borrow money to open a business are only certain people anyway because people like this tend to be people who have strong determination because they dare to take out a loan to run their business idea.
it's not wrong if they borrow money to open a business, because if they are sure that what they are going to do can be profitable, it doesn't matter, I support this. because this also opens someone up to be more courageous in taking steps, on the other hand there are definitely risks but as I said only someone who has a strong determination to do this because rarely do people dare to do something like this which is very risky. the key is confidence.

I concur that borrowing money is not always a bad thing as long as you know what to do with it and you make enough profit to feel like you can launch a business without going out and getting another loan is also okay. However, sometimes we need to realise that the loan was made possible by the interest that will be added to it; I don't mind the interest on the loan; what bothers me is how I will be able to succeed as an individual if I acquire a loan. These days, a lot of people don't take out loans to launch businesses; instead, they use them to buy cars, build houses, and generally enjoy life. As a result, a lot of people who take out loans don't get along.

Every decision you make in life requires careful consideration. Many successful businessmen that we see today began with a loan and have since amassed millions of dollars in their ventures are not wealthy because they used charm or magic to finance their businesses; rather, they worked hard to establish their brands and raise capital so they would never have to borrow money again. However, you will also notice that many young boys and girls borrowed money today, which they ultimately used to party.

[uneng]

Does it seem foolish to think that starting small is easy? The battlefield is horrible! The banking system's collateral demands divide the haves and have-nots Responsible financing is necessary, but where is the line between caution and exclusion? Banks, after all, should be enablers, not gatekeepers. Isn't good debt a 2 sides coin? We can't romanticize debt without realizing it can trap us financially. You mention 50% interest rates; that's daylight robbery! A vicious economic loop where you work twice as hard for what? Nearly drowning?

On to saving versus borrowing. A cash reserve is desirable, but how many people can afford it? World income inequality is as broad as the Grand Canyon. Many believe saving it as likely as a snowball in hell. The system hurts normal Joes who want to be entrepreneurs but face tough economic realities.

Banks actually don't care, as long as they are profiting side by side with whales and monopolies from our societies. The government neither, since they also profit from the current consolidated system dynamic. Governments, banks, whales and monopolies are partners on this business. The upper untouchable caste living on the abusive interest paid by the average joes. And I don't think there is a large scale solution for this issue, because even if someone with the best intentions reach a power position to make some changes, he will be corrupted by the system or taken out of circulation. The longer I live, most certain I become that collective causes are doomed to failure.

So, the answer? Perhaps the loan system needs a complete rethink. Community-backed microloans or crowdfunding for local enterprises. We must remove these financial barriers and level the playing field. Isn't it time for banks to help, not hurt?

It's a great idea! Let everyone become lenders, while charging cheaper interest rates from borrowers. Everyone gains, although it directly impacts negatively the finances of that upper untouchable caste, and as we know, their interests come first... I would love to see this idea in practice, but unfortunatelly, It's not going to happen. I think it's funny when a random person wants to lend money he is considered a loan shark, which is a crime in many places, but the financial institution can legitimately charge 50%.

[Fakhrulenclix]

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.

Using borrowed funds for trading can significantly amplify the emotional and psychological stress, especially in such a volatile market. The added pressure of managing leveraged positions can indeed lead to heightened anxiety and sleepless nights. It's important to prioritize mental well-being and financial stability when engaging in trading, and to carefully consider the risks associated with leveraging. Understanding the psychological impact of leveraging is crucial for making informed decisions and maintaining a healthy approach to trading.

It is indeed not an easy thing to be able to trade using borrowed funds because we don't know for sure whether we can make a profit in trading and if we experience losses in trading of course we have to find a way to pay off the debt when we can't pay it off of course we have was in trouble and had to take out another loan to be able to pay it off.

Of course, it is very important to be able to trade with a good mental condition and also have sufficient funds to trade, because if our mental condition is not good, of course we can make the right decisions in trading.

But it will be quite worth it with all the possibilities we will get.
I think we need to take a little risk in taking big profits because it will be proportional so we will never find profits without risk. Likewise, in everything we do, the greater our capital, the greater the profit percentage.

Therefore, we have to be smart in seeing opportunities and be able to use the money as much as possible, especially the money from debt that we will use, of course we will do a lot of calculations to avoid losses.

[benalexis12]

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.

Using borrowed funds for trading can significantly amplify the emotional and psychological stress, especially in such a volatile market. The added pressure of managing leveraged positions can indeed lead to heightened anxiety and sleepless nights. It's important to prioritize mental well-being and financial stability when engaging in trading, and to carefully consider the risks associated with leveraging. Understanding the psychological impact of leveraging is crucial for making informed decisions and maintaining a healthy approach to trading.

It is indeed not an easy thing to be able to trade using borrowed funds because we don't know for sure whether we can make a profit in trading and if we experience losses in trading of course we have to find a way to pay off the debt when we can't pay it off of course we have was in trouble and had to take out another loan to be able to pay it off.

Of course, it is very important to be able to trade with a good mental condition and also have sufficient funds to trade, because if our mental condition is not good, of course we can make the right decisions in trading.

But it will be quite worth it with all the possibilities we will get.
I think we need to take a little risk in taking big profits because it will be proportional so we will never find profits without risk. Likewise, in everything we do, the greater our capital, the greater the profit percentage.

Therefore, we have to be smart in seeing opportunities and be able to use the money as much as possible, especially the money from debt that we will use, of course we will do a lot of calculations to avoid losses.

You're right there, and in everything we do that involves money, there's always a real risk, and that doesn't go away. Now, just like you said, there is actually a calculation that will happen if what we want is to build a business that will produce profit for us.

Now, if it comes from debt, I don't see any problem here if we only know the correct process of circulating the money owed in the proper management of the business that we will also do.

[arwin100]

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.

Using borrowed funds for trading can significantly amplify the emotional and psychological stress, especially in such a volatile market. The added pressure of managing leveraged positions can indeed lead to heightened anxiety and sleepless nights. It's important to prioritize mental well-being and financial stability when engaging in trading, and to carefully consider the risks associated with leveraging. Understanding the psychological impact of leveraging is crucial for making informed decisions and maintaining a healthy approach to trading.

It is indeed not an easy thing to be able to trade using borrowed funds because we don't know for sure whether we can make a profit in trading and if we experience losses in trading of course we have to find a way to pay off the debt when we can't pay it off of course we have was in trouble and had to take out another loan to be able to pay it off.

Of course, it is very important to be able to trade with a good mental condition and also have sufficient funds to trade, because if our mental condition is not good, of course we can make the right decisions in trading.

Imagine the pressure you can get for using that since you already lose with the interest ask by bank with that so maybe don't ever think about taking a loan from that institution just to fund your trading activity since we know how risky it is and might we will just lose the amount we ask from them. I guess that's a bad idea and not a proper way to use our debt since we might get in trouble to pay it especially if we have many loans from different outlets. We should think in smart way and then think about more valuable way if we plan to take loan then we make sure that it can really generate a passive income like expanding our businesses since this is how a loan became a good one if we just use it on right way.

Aside from trading in good mental condition since we really need to be in good shape with that, we also need to use our extra money so there's no huge mess happen to us and also we will not get broke if luck is not with us by the time we trade some coins in the market.

[harapan]

When you take debt, you should pay the debt from the loan taken and the only way you can do that is to make money out of that debt. A debt should only be taken to invest. This sounds easy to say but it's very hard. Especially for those who have an opportunity to take loans easily. It requires a lot of discipline to not borrow money when you need money for consumption.
I feel the only time we should borrow money for consumption is for health emergencies and life and death issues.
But as someone who works and make money, you should have planned for emergencies like that

When you get comfortable with taking debt for consumption, it becomes very easy to fall really deep into debt  and that can make you not to make any money because all your money would go to paying off debt

[Dewi Aries]

When you take debt, you should pay the debt from the loan taken and the only way you can do that is to make money out of that debt. A debt should only be taken to invest. This sounds easy to say but it's very hard. Especially for those who have an opportunity to take loans easily. It requires a lot of discipline to not borrow money when you need money for consumption.
I feel the only time we should borrow money for consumption is for health emergencies and life and death issues.
But as someone who works and make money, you should have planned for emergencies like that

When you get comfortable with taking debt for consumption, it becomes very easy to fall really deep into debt  and that can make you not to make any money because all your money would go to paying off debt

someone who has a good mindset, when he has a business idea or business as well as an investment, and he doesn't have enough funds to do the thing he wants to do, then he takes out a loan in my opinion of course they have thought about everything when they take the loan action money, I think they are very confident that the business they are going to run can generate profits, therefore they dare to take out a loan to carry out something they want.

Sometimes there are people who don't have permanent jobs and they have financial problems because they are forced to take out loans to buy their needs, and this is normal, but I don't know what happens to those who don't have jobs but have debts. that has to be paid off, maybe they can just wait for a miracle to happen, but I think they have to look for a clear job so they can get a steady income, because it's not just for themselves, the debt they have to pay off is also their responsibility.

[Lorence.xD]

When you take debt, you should pay the debt from the loan taken and the only way you can do that is to make money out of that debt. A debt should only be taken to invest. This sounds easy to say but it's very hard. Especially for those who have an opportunity to take loans easily. It requires a lot of discipline to not borrow money when you need money for consumption.
I feel the only time we should borrow money for consumption is for health emergencies and life and death issues.
But as someone who works and make money, you should have planned for emergencies like that

When you get comfortable with taking debt for consumption, it becomes very easy to fall really deep into debt  and that can make you not to make any money because all your money would go to paying off debt

Plus if you take a debt, make sure that you can still pay it in case your plan to make money from that debt fails, causing the penalty, charges, and fees could drain up your wallet. Borrowing money just to buy unnecessary things would be a bad move, some think that they are taking advantage of the system like payment for 3 months, the thing is you would still need to budget your money as you would less the debt to your salary.

Borrowing money for an investment is a good idea but for sure you need to make the money grow to return the good. You need to plan it as there is such long-term investment to reach ROI and get profits like we can say Bitcoin, if you invest in the current market for sure you would have to wait for another bull run to occur, or else you would be in deep debt. For health and emergency, it's understandable, but you need to make sure you have emergency funds to sustain your needs. The important thing is the person who's gonna take a loan has a stable income.

[junder]

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.

Using borrowed funds for trading can significantly amplify the emotional and psychological stress, especially in such a volatile market. The added pressure of managing leveraged positions can indeed lead to heightened anxiety and sleepless nights. It's important to prioritize mental well-being and financial stability when engaging in trading, and to carefully consider the risks associated with leveraging. Understanding the psychological impact of leveraging is crucial for making informed decisions and maintaining a healthy approach to trading.

It is indeed not an easy thing to be able to trade using borrowed funds because we don't know for sure whether we can make a profit in trading and if we experience losses in trading of course we have to find a way to pay off the debt when we can't pay it off of course we have was in trouble and had to take out another loan to be able to pay it off.

Of course, it is very important to be able to trade with a good mental condition and also have sufficient funds to trade, because if our mental condition is not good, of course we can make the right decisions in trading.

I think taking out a loan to trade is not a good thing, because even though trading can generate profits, it's not guaranteed, right? because in my opinion even someone who is a professional in trading will definitely experience wrong predictions, it is impossible for them to always be accurate in predicting, because in my opinion even though trading requires extensive knowledge, I also think luck plays a role, so even if they have sufficient knowledge I don't think they are knowledgeable in trading, which doesn't guarantee they will always make a profit.

I think that taking out a loan to start a business or business is less risky, because if we have good skills in managing it, it is likely that it will be profitable, and don't try to be successful, just start a business to make a profit first, because success will come by itself later if someone wants to try and work hard, this is also the difference with trading, even though we try as hard as we can, I don't think it guarantees that we will get easy profits. but I don't know exactly how, I just assume what I think.

[shinratensei_]

Looks good and I agree on the bad debt and good debt. In short if I am purchasing a commercial space by taking the loans then that is one sort of debt for me. However, it depends on its usage whether it is gonna be my good debt or bad debt. For example, if I go further and rent it to some bank or company then it is going to pay me rent. This could either pay up half of my loan, or may be full EMIs. Now this is not my liability anymore as it is getting paid off by the third party. I would end up saving my wagers plus I will be building a property for myself. In addition to all, as real investment this will keep growing with the time as appreciation cost. So yeah, I believe the theory that is stated in the OP is something we can live and concur.

only if you have an asset before hand, or salary that is sufficient, the bank aren't gonna go around giving some money to stranger, you need to build up trust first maybe credit score for loan then you can get that loan to start out with such strategy, even so in renting your property it also requires proper planning also need to remember that the property need mantaining so its some more money to shell out also with taxes.
this indeed could work but really there must be more to it than just renting some spaces, and you will magically get some property in your hand as the time goes.
but i would argue that if someone has enough asset to cover for the failure of the strategy, they should try it, there's nothing wrong in attempting to get some good property with just loan, even more so when we have so much money that we don't know how to take advantage of but in the other hand we also need to mantain cashflow.

[CODE200]

Problem with this one is that not everyone can easily access loans or even afford to utilize debts even if they can make it because everyone isn't rich and have what it takes to be risk takers and they can't afford to even do that too because it's going to be significant money for them and they might have a hard time using it in a business or something that might improve their financial standing. Plus, I do think that we're likely to see debts get it's full utilization if they're a certain amount, a measly 100k loan won't really net you lots of returns and that's why big businesses are the only ones that's successful at doing this debt utilization because they're getting bigger returns since they can borrow more money than most individuals.

[knowngunman]

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.

For real, people borrow money to start trading? What type of risk is that? No matter how professional and skillful you think you are in trading, I don't think it's a wise decision to borrow money and start your trading career. Although, it's a two edge sword and if you are lucky to succeed, you'll repay the debt and have your own money to start the journey but if otherwise, you suffer from desperation the embarrassment that associate with debt. However, the chances of failure outweigh that of success and that's why it is not an ideal.

But it will be quite worth it with all the possibilities we will get.
I think we need to take a little risk in taking big profits because it will be proportional so we will never find profits without risk. Likewise, in everything we do, the greater our capital, the greater the profit percentage.

Therefore, we have to be smart in seeing opportunities and be able to use the money as much as possible, especially the money from debt that we will use, of course we will do a lot of calculations to avoid losses.

Are you a risk taker? If one can answer this question honestly, then taking debt for investment wouldn't be a bad idea but believe me, I can't subscribe to such ideas because it doesn't align with my policy. We all know there's no such thing as a sure thing and guaranteed as far as investment is concerned.

Having all plan put in place doesn't mean automatic success after acquiring the debt. The only thing sure here is that, with the debt, you have the capital you need to kick off the business but in all circumstances, you should as well prepared for the possibility that the business might not succeed.

Actually, there's always risk involved in making profits and it doesn't even matter whether it's big or not but normally the higher your risk, the possibility of higher return and otherwise. However, it's all about knowing and balancing your goals.

[Fredomago]

Problem with this one is that not everyone can easily access loans or even afford to utilize debts even if they can make it because everyone isn't rich and have what it takes to be risk takers and they can't afford to even do that too because it's going to be significant money for them and they might have a hard time using it in a business or something that might improve their financial standing. Plus, I do think that we're likely to see debts get it's full utilization if they're a certain amount, a measly 100k loan won't really net you lots of returns and that's why big businesses are the only ones that's successful at doing this debt utilization because they're getting bigger returns since they can borrow more money than most individuals.

The argument is true, business expect good returns, especially when the business is already established. They can multiply their investment, so even if it comes from a loan it won't be hard for them to repay it as it will be used for business that can generate income which they will be using to repay the loan together with the interest. After those loan terms, the money that they earned from it will be used as capital, and it will just be added to their growing business.

Sad but true, that even small loaners can get money without proper knowledge and without that opportunity to establish a business, the outcome will be a burden to those who borrowed that loan and the interest that they borrowed needed to be repaid, and it will be taken from their monthly salary if they fail to use it for business that will generate profits.