Good debt creates wealth

I was watching a video by Robert Kiyosaki about how we can use debt to bring wealth. He is the popular author of the book ‘Rich Dad Poor Dad’.

He shared about his idea of good debt that creates wealth while bad debt becomes a liability that causes us to lose money.

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Below is the video with his explanation.

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Bad debt

Everyone of us has debt. Most of us get a loan from the bank to buy our houses and pay monthly instalment so that we can continue to own the houses that we stay in.

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We also have car instalment that we need to pay monthly.

All these monthly expenses are considered bad debt since we are paying to the bank with interest so that we can continue to use them.

These debts do not profit us financially and they take a large part of our monthly salary.

Good debt

It is interesting to know about good debt.

We may not have the money to make an investment but we can use debt to get the finances to invest and earn.

I can say it sounds risky but it is possible with good planning and research.

Robert Kiyosaki actually used his credit card to make a down payment of a one-bed room condominium when he was twenty-five years old.

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This investment provided him with the experience of how he was able to use money he did not have to generate income.

He rented out the one-bed room condominium and it gave him $25 profit after his payment of bank loan monthly. It was a good debt since it generated income for him.

Income from social platform

We are all involved in social platform that we can curate articles and earn. With a bigger account, we can earn more actually.

I wonder if we can make good use of the good debt concept and generate a good income from our social platform.

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It is possible if we think logically but everything does have its risk.

It is possible to use good debt to generate an income for us online and it would also build the platform positively when everyone is doing the same.

The value of our cryptocurrency would increase and more people would participate in this journey when they see success in what we are doing.

In conclusion

Regardless of how we look at it, getting into debt is not a good thing but getting into debt that generate income may be one way to generate wealth by using debt.

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We should never just get ourselves into debt without proper research.

Robert Kiyosaki did research on many properties before he finally spotted the profitable one that he made his first investment.

We should never investment more than we can generate back especially with a family to support.

Carefully planning and calculation would never be a mistake. We must be certain that we have made enough investigation and the actual demand of the market before attempting to use debt to generate wealth.

Disclaimer: This is my personal reflection and I am not in any position to instruct anyone what they should do. I am not responsible for any action taken as a result of this post. My post can only be a reference for your further research and growth. By reading this post, you acknowledge and accept that. All images and pictures were taken from google images that are free from copyright under labelled for reuse.

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Posted from my blog with SteemPress : http://fun2learn.vornix.blog/2019/02/16/good-debt-creates-wealth/

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