Have you ever heard people say that "owing money is bad" or "getting into debt is like being stuck in a never-ending cycle of payments"? Well, it's partly true that too much debt can be a problem because you have to pay back more than you borrowed, which the added money is called"INTEREST"
HONESTLY, Thanks to "INTEREST. I said this because this is among what makes bank manager listening to you and if your pitch is good enough, your application will be granted for loan in Nigeria.
but wait!! ππ Surprisingly, the United States has a huge total debt of almost $32.6 trillion; $25.8 trillion held by the public and $6.8 trillion in intragovernmental debt., which means each household owes over $8,300. To give you an idea, the entire U.S. economy is a bit over 32 trillion dollars, and a significant part of it is tied up in debt. But here's the twist β However, not all debt is bad.
Most of us have some form of debt, like what you might owe on a credit card, a car loan, or for education. It can be stressful, But to understand how debt can be beneficial, let's see how even wealthy people use debt to make billions of dollars using below strategy
How Borrowing Money Can Help You Succeed with Your Finances
1. Using Debt for Business: In the business world, people sometimes use debt to get things started. Imagine you want to sell something like pens. Instead of paying for a lot of pens upfront, you can work with factories in places like China. They might let you have the pens and pay them later when you've sold them. This way, you don't need a lot of your own money to begin.
2. Real Estate and Refinancing:Real estate, like buying and selling houses, is another area where debt can be a game-changer. Suppose you've saved $200,000, which is a good amount, but it might not be enough to buy a house. **Here's a trick: find a house that needs some fixing **up, get a loan to buy it, make improvements, and then get a new loan for more money because the house is worth more. This way, you can make money while keeping your money invested and avoid extra taxes.
3. Hedge Funds and Short Selling:Hedge funds are like special clubs where rich people try to make even more money. Sometimes they do something called "short selling." It's like saying, "I bet this company's value will go down." If you're right, you can make money. But it's risky because if you're wrong, you can lose a lot.
4. Forex Trading:Forex is like a place where people trade different currencies. Think of it as buying and selling money from different countries. You can use borrowed money to trade more than you have. If you can guess which way money values will go, you can make some good money.
5. Building a Good Credit Score:Your credit score is like a report card for your money habits. It can help you get loans with lower interest rates. To do that, you need to show that you're good at paying back money you've borrowed.
MY FINAL ADVICE
Imagine you have different kinds of debts, like credit card debt, Micro finance Bank dept etc. which usually has high interest rates, infact, Nigeria is so Worst with different treat π€π³ Chai!! **This people can disturbπ€π **
let proceed..
Look, all am trying to let you know is that. you see, High-interest debt, like credit card debt, is like a bad guy. It can cost you a lot of extra money because you have to pay back not only what you borrowed but also extra fees including the hidden fees.
So, it's better to avoid this kind of debt as much as possible.
But not all debts are bad. Some are like helpful tools when you use them wisely. For example, think of a mortgage for your house. It's a kind of debt, but it's different. When you buy a house, you might not have all the money upfront, so you borrow some from the bank. Then, over time, you pay back the bank bit by bit. If you do it smartly, your house can grow in value, and you can even make some extra money when you sell it.
So, the point is that you should be careful with high-interest debt, like credit cards, Banking loan app etc. because they can put you in a financial mess. But other debts, when you use them the right way, can actually help you grow your wealth. It's like having a good tool in your financial toolbox.
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