Wow! Today I’m on fire with all these blog posts. I’m really loving the value I am able to offer you all and always appreciate you guys coming back for more.
In this article, I am going to talk about some very common dilemmas most people have, when it comes to taking out loans, borrowing money etc. The most common way of borrowing money, is using our credit cards. Everyone uses a credit card. In fact, people with less money use it more because they think it’s a piggy bank. Taking out a loan, and the decision to move forward in such a way, is really important as it can affect your financial situation for many years down the road. If you are thinking of taking out a loan to go on a vacation, please get off my blog right now. I don’t need people contaminating the site with foolishness.
Borrowing money has never been cheaper. I know that most of the folks thinking of the disaster in the markets back in 2007-2008, are probably getting angry just by the mention of those years. But to be honest, there was one good thing that came out of it and that was lower interest rates. You see, when the markets freeze and people aren’t buying, there needs to be initiative for people to borrow money. Because how do banks make some of their money? Through interest.
So when the request for money is low, because of the retraction after the crash, banks went so low on their interest rates to lure more people in as customers. That really resulted in cheap borrowing, and in fact Wall Street banks have really done wonders with the low interest rates (in a good sense.) The only way for an economy to grow is through borrowing. You can never win with cash – it’s just not possible. And the only way for you to grow, is through borrowing. As President Donald Trump used to say: Go big, or go home!
It doesn’t have to do with the arrogance of wanting to be big. But if banks are literally throwing money at you, and you are being an idiot in saving your way to wealth, well I just said it…you’re an idiot. Saving is good for shorter periods of time, but if you are waiting for all stars to align to get your tail out of bed and get a deal going for your business, then I feel sorry for you. But then again, if you are taking out a loan to buy shoes or take on a vacation, then again: you don’t know what you are doing.
Money may be cheap at the moment to borrow, but keep in mind that you do need to pay it back. If you are going to borrow so that you take care of expenses that won’t bring in income, you are setting yourself for failure. Borrowing only makes sense if you use that money to build something that will bring more money back to you. Common sense…you do need to pay the bank back. They are only giving it to you for a certain period of time. Now, I know that taking out a loan can seem intimidating but not trying to get out of your bad situation is worse. Ultimately, taking out a loan needs to make sense. You need to have realistic expectations on the income you will get from your business ventures in the coming years and balance that with the owed amount.
I will not try and beat a dead horse, so will end the article right here. I’m just crafting a nice beginning on something much more interesting that will evolve in the upcoming weeks. Any questions you have about finances, feel free to message me and I certainly hope I can give you something of value.
Take care and I appreciate you for following my posts.
Joe